FCC's net neutrality policy derailed

15 Jan 2014

ITEM: The net neutrality debate has been revived in the US after a federal appeals court struck down part of the FCC’s rules on the topic.

Consequently, there is now a ton of dithering among the various pro-neutrality groups and pundits proclaiming the death of the internet at the hands of Verizon et al.

GigaOm has a good roundup of the various reactions to the ruling, but here are a few quick takeaways:

1. The ruling doesn’t throw out the entire Open Internet Order, just these two parts, according to Wired:

Wireline or fixed broadband providers may not block lawful content, applications, services, or non-harmful devices. Mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services.

Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic. That rule, however, does not apply to wireless services.

The rules requiring wireless and wireline broadband providers to disclose network management practices, performance characteristics, and commercial terms of their services are still in effect. However, as the above two provisions are arguably the entire point of having a net neutrality policy in the first place, the ruling essentially means ISPs can block or throttle any competing OTT service they want, as long as they're transparent about it.

2. The decision is not a refutation of the net neutrality argument. Indeed, the ruling has nothing to do with the merits of net neutrality or the actual policy itself, but rather the way the FCC went about implementing it. Specifically, the rules are written to apply to “common carriers” – and the problem is that American ISPs are not classified by the FCC as common carriers.

In fact, Judge David Tatel explicitly noted in his ruling that the FCC was right to be concerned that a lack of net neutrality was potentially bad news for customers, according to The Verge:

Notably, Tatel also agreed that striking down net neutrality could have negative effects on consumers. "The commission has adequately supported and explained its conclusion that absent rules such as those set forth in the Open Internet Order, broadband providers represent a threat to internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment," he said, saying that broadband companies have "powerful incentives" to charge for prioritized access or to exclude services that competed with their own offerings.

3. The FCC has several options in front of it – a rehearing in the same court, an appeal to the Supreme Court, or rewrite the policy. (It could also give up on net neutrality altogether, but FCC chairman Tom Wheeler has already said that option is not on the table.)

However, there are concerns that the FCC’s next attempt to formulate a net neutrality policy could result in the regulator giving itself even more power to regulate the internet. In fact, even some pro-neutrality advocates felt the Open Internet Order went too far in that direction.

So all up, technically it’s only a blow for net neutrality in that the FCC did it wrong. However, that may be a negligible difference if Verizon, AT&T and other ISPs take advantage of the decision. We'll see what happens. But overall, net neutrality in the US looks far from dead. For now.

It’s worth adding that in the US, net neutrality is a far more politicized topic than it is in other parts of the world, and given the current state of toxicity in US politics, a workable compromise looks next to impossible. But it’s not. In Singapore, for example, the iDA and industry players were able to hammer out a net neutrality policy that everyone could live with. That was two and a half years ago. So it can be done – if you want to.

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