On January 14, 2014, the DC Court of Appeals struck down the Federal Communications Commission’s (FCC) Open Internet rules. Many are concerned that this decision spells the end of network neutrality. Network Neutrality means that ISPs, such as Comcast and CenturyLink, treat all Internet traffic equally regardless of the content, source, or destination of the data and cannot block web sites containing lawful content. There is a real fear that ISPs will now treat their own content favorably or charge users of the Internet, such as Netflix, a fee for ensuring that Netflix content is not slower than content owned by or affiliated with an ISP. This would lead to a two-tiered Internet where only the big content owners have a fast lane while independent sources of content and applications and even dissenting opinions will be harder to reach through the Internet. For a humorous but informative take on the potential harms from the loss of Open Internet rules check out this video clip from Stephen Colbert.
The decision was a clear setback for the public interest but there is reason for optimism. While the court ruled that the FCC cannot enforce most of its Open Internet rules, it affirmed the FCC’s broad authority to preserve an open Internet. Confused? What the court said was that since FCC had in 2002 classified Internet Access as an “Information” service and not a “Telecommunications” service, it lacked legal authority to apply telecommunications regulations like no content blocking or network neutrality to a service it said was not a telecommunications service. It seems like the FCC has only itself to blame. The FCC can still act but it needs to do so in a different way (unless it chooses to reclassify Internet access as a telecommunications service). However, the court left in place one important component of the Open Internet rules that require ISPs to be transparent about their network management practices and the commercial terms for broadband service. Presumably the FCC will ensure that if any discrimination in data transport occurs, it will be based on legitimate network practices, as opposed to an attempt to favor some forms of content over others.
Comcast subscribers should know that despite the court’s order, Comcast is still bound by the FCC’s Open Internet rules for about another 4 years. That is because as a condition to gain approval of its buyout of NBC, Comcast agreed that it would abide by the FCC rules for 7 years despite any court order vacating those rules. Another favorable aspect of the ruling is that one of the three judges strongly suggested that the FCC has the authority to preempt any state laws that bar a municipality from constructing and operating a broadband network.
So what’s next? It is quite possible that ISPs will begin to test new business models predicated on premium speed deals with some content providers. If so the FCC has a few options. Among them it could appeal the decision; it can also reclassify Internet service as a telecommunications service, which is the preferred option because it makes the rules clear to all. Many telecom attorneys believe that in the short term the FCC will act as the cop on the beat and handle any transport discrimination complaints on a case-by-case basis to ensure that ISPs do not harm the Internet as we know it. Stay tuned.