In a decision being both cheered and decried by internet users everywhere, in a 2-1 vote, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Obama Administration’s order for the Federal Communications Commission to enforce “net neutrality” and not allow ISPs and the providers of broadband to pro-rate costs according to what internet users consume.
Essentially, the FCC declared the internet a utility last year when it was decided to uphold net neutrality, and is claiming victory with this ruling:
“Today’s ruling is a victory for consumers and innovators who deserve unfettered access to the entire Web, and it ensures the Internet remains a platform for unparalleled innovation, free expression and economic growth,” Wheeler said in a statement issued shortly after the ruling. “After a decade of debate and legal battles, today’s ruling affirms the Commission’s ability to enforce the strongest possible internet protections—both on fixed and mobile networks—that will ensure the internet remains open, now and in the future.”
The internet providers filed suit against the FCC’s ruling on Net Neutrality on first amendment grounds, claiming that mobile broadband was a new service that should not be subject to the 1996 Telecommunications Act, and that the internet itself is not really a utility, arguments that two members of the Circuit Court panel, both Democrat appointees, rejected:
“Given the tremendous impact third-party internet content has had on our society, it would be hard to deny its dominance in the broadband experience,” the judges said in their 115-page majority opinion.
“Over the past two decades, this content has transformed nearly every aspect of our lives, from profound actions like choosing a leader, building a career, and falling in love to more quotidian ones like hailing a cab and watching a movie,” the judges said. “The same assuredly cannot be said for broadband providers’ own add-on applications.”
The dissent in this case discussed the internet and broadband availability and access as more of a natural monopoly than a utility and questioned the FCC’s oversight.
In a lengthy dissent, Judge Stephen Williams said he would have struck down the rules. He said the FCC “fails to offer a reasoned basis” for its view that giving preferential treatment to customers who pay for faster service is a problem.
By regulating broadband service like “natural monopolies,” Williams said the FCC provides “little economic space for new firms seeking market entry or relatively small firms seeking expansion through innovations.”
Defeating net neutrality has long been an objective of Comcast, AT&T, Verizon, and other bundled internet and cable providers who seek to charge more for using services that use a tremendous amount of broadband, like streaming Netflix, that they say hogs broadband and slows down services to other customers. However, Comcast has admitted that this has been a scheme to keep some revenue streams profitable as there would be a discount for using one sort of service or another. Courtesy of Freeper Cyberman:
For years the broadband industry tried to claim that they were imposing usage caps because of network congestion. In reality they’ve long lusted after usage caps for two simple reasons: they allow ISPs to charge more money for the same product, and they help cushion traditional TV revenues from the ongoing assault from Internet video….
Comcast is of course slowly but surely expanding usage caps into its least competitive markets. More recently the company has tried to deny it even has caps, instead insisting these limits are “data thresholds” or “flexible data consumption plans.” But when asked last week why Comcast’s caps in these markets remain so low in proportion to rising Comcast speeds (and prices), Comcast engineer and vice president of Internet services Jason Livingood candidly admitted on Twitter that the decision to impose caps was a business one, not one dictated by network engineering….
This admission and stance makes the argument against net neutrality look like a matter of greed rather than business necessity, and to some who believe in equal access, pro-rating services might appear to be a barrier to entry. However, industry insiders have long argued against net neutrality on the very same grounds which the FCC celebrates it. From the Associated Press:
Berin Szoka, President of TechFreedom, a think tank opposed to net neutrality, said the court’s decision gives the FCC “a blank check to regulate the Internet however it sees fit.”
“The only way to end this madness is a legislative solution that gives the FCC clear but narrow authority over the core of its rules – but stops the FCC’s other power grabs,” Szoka said.
And the government having a blank check to regulate a communications tool in the United States should be a non-starter, constitutionally speaking. Forget the pro-rated services that really are a privilege of private enterprise.
Telecom industry giants pledge to appeal the ruling, which was always expected to reach the Supreme Court, and are also calling for Congress to change the rules regarding the internet, as in the 20 years since the Telecommunications Act was passed into law (thank you Senator John McCain) the landscape of electronic communications has changed.