What the Courts Did to Net Neutrality Yesterday

There was a big court ruling in Net neutrality yesterday. As background the general principle is how ISPs should be regulated. Typically you've payed for access to the Internet and pay by how much you use. It's kind of like the electric company. You pay by kilowatt but it doesn't' matter what you use the electricity for. ISPs find that some customers use a lot of their bandwidth and want to find ways to charge them even more than just their usage fees. Worse, maybe they compete with these users and want to charge them more to make their services more expensive and less competitive.

A simple example is Netflix. They account for a huge amount of internet traffic with streaming video. Your ISP probably sells you a cable tv package with your Internet connection and your ISP isn't Netflix. Imagine if they charged Netflix more than just their (or your) bandwidth usage or if they deliberately slowed down Netflix data to make the service perform badly ("Hey that's a nice video you service you have there, it would be a shame if something were to happen to it..."). Another common example is Skype because your ISP probably offers you phone service as well. In the electricity example it's as if the electric company made a deal with Panasonic so that their products got electricity when Sony products didn't. Or if Mercedes paid more so that their cars could use a high-speed lane on the highway that no other car brands were allowed to use.

Now there are details about how to write the regulations preventing these bad things from happening. ISPs argue that while they don't want to discriminate against Netflix or Skype they want the ability to regulate traffic so that the guy next door pirating every movie ever made off bittorrent doesn't destroy your bandwidth. The FCC is in charge of these rules and they've been messing it up for a while.

Generally the FCC can classify ISPs as telecommunication services (aka common carriers) or information services. If they were common carriers then they'd have to treat every customer equally. Instead in 2006 they classified them as information services which gives the FCC less ability to regulate them (guess who pushed for less regulation). Then in 2010 the FCC tried to setup some rules to prevent abuses and the court ruled yesterday that those rules weren't allowed to be enforced against information services only against common carriers.

Arc Technica explains it all here, How the FCC screwed up its chance to make ISP blocking illegal.

The Switch outlines, Here’s how net neutrality can still survive. It's very simple, reclassify the ISPs as common carriers. Everyone agrees they have the authority to do that. Here's a White House petition to get the Obama administration to do just that Restore Net Neutrality By Directing the FCC to Classify Internet Providers as "Common Carriers".

Ryan Singel wrote Net Neutrality is Dead. The FCC Won’t Save It. It’s Time to Start Building. He says you should use T-Mobile who's pushing for openness as a competitive strategy (I don't think that's ever worked) and that local governments should deploy their own fiber networks to keep private companies out of it. He also summed up the current state very well. "You want your ISPs to act like a utility; Your ISPs have no desire to just be a utility; things will get bad, probably in ways that are hard to detect — like Netflix buffering."

WonkBlog said, Calm down. The courts didn’t just end the open Internet. "The court objected to FCC’s current versions of the rules because they swept too broadly and indiscriminately. In affirming Section 706 authority, however, the court simultaneously opened the door for the FCC to implement similar versions of these rules on a case-by-case basis against individual access providers who abuse their monopoly. In legal terms, the FCC can now act through adjudications instead of rulemakings. Indeed, one bedrock principle of administrative law is that agencies are generally free to enforce law through either method." I'm sure that's true, but it would seem much simpler to me to have a set of rules applying to everyone instead of requiring enforcement on a case-by-case basis.

Tim Wu, The law professor who coined ‘net neutrality’ lashes out at the FCC’s legal strategy calling it "a FEMA-level fail". He doesn't think the 706 authority amounts to much.