‘Net Neutrality’ Ruling Paves the Way For Internet ‘Fast Lanes’

The FCC faces tough policy choices after a federal court struck down key aspects of the agency's open Internet rules

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Gary Cameron / REUTERS

U.S. FCC Chairman Tom Wheeler testifies before the House Communications and Technology panel on Capitol Hill in Washington December 12, 2013.

Open Internet advocates suffered a stinging defeat on Tuesday when a federal court struck down rules designed to prevent the nation’s largest broadband service providers from charging content companies for access to Internet “fast lanes.” The ruling, which was expected, is a blow to the Federal Communications Commission’s ability to enforce “net neutrality,” the principle that Comcast, Verizon, and AT&T shouldn’t be able to favor certain Internet services at the expense of rivals. As a practical matter, the ruling by the United States Court of Appeals for the District of Columbia means that the broadband giants are now permitted to charge Netflix, Amazon and other streaming services for access to faster broadband speeds.

The principle of net neutrality was enshrined in the FCC’s 2010 Open Internet order, which boils down to three rules. First, Internet service providers (ISPs) must be transparent about how they handle network congestion; second, the ISPs are prohibited from blocking traffic such as Skype or Netflix on wired networks; third, the ISPs can’t discriminate against such services by putting them into an Internet “slow lane” in order to benefit their own competing services. In its 81-page ruling, the court upheld the transparency rule but struck down the anti-blocking and anti-discrimination rules. The verdict is a blow for President Obama’s tech policy agenda, and presents the FCC with politically difficult choices about how to proceed.

The ruling means that the broadband giants might now be able to charge deep-pocketed content companies for privileged access to consumers. This could have a serious impact on Internet startups that might not be able to afford to pay for such access, potentially stifling innovation on the Internet, which has spawned one of the greatest periods of technological development in U.S. history. Craig Aaron, president and CEO of Free Press, a D.C.-based public interest group, said the court’s decision means that “the biggest broadband providers will race to turn the open and vibrant Web into something that looks like cable TV. They’ll establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else.”

Harvey Anderson, senior vice president at Mozilla, the company that developed the Firefox Web browser, said the ruling should be “alarming” for Internet users. “Giving Internet service providers the legal ability to block any service they choose from reaching end users will undermine a once free and unbiased Internet,” Anderson said in a statement. “In order to promote openness, innovation, and opportunity on the Internet, Mozilla strongly encourages the FCC and Congress to act in all haste to correct this error.”

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The groundwork for Tuesday’s defeat was established in 2002, when the FCC made the fateful decision to classify broadband as an “information service” not a “telecommunications service,” which would have allowed the agency to impose “common carrier” regulations prohibiting discrimination by the broadband companies. That decision meant that when the FCC established its Open Internet Rules in 2010, the agency was on shaky legal ground, as numerous experts warned at the time. “Given that the commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such,” wrote U.S. Circuit Judge David Tatel.

New FCC Chairman Tom Wheeler and his colleagues now face difficult decisions. The agency could choose to appeal the court’s ruling. Or the agency could decide to reclassify broadband as a telecommunications service, something that many net neutrality advocates believe the agency should have done in the first place. That, however, would trigger a major showdown between the FCC and broadband giants like AT&T and Verizon, which are extremely powerful on Capitol Hill and oppose such reclassification. Since 1998, AT&T and Verizon have spent more than $340 million lobbying members of Congress, according to the Center for Responsive Politics.

Former FCC Commissioner Michael Copps, a longtime champion of net neutrality who serves as a special adviser to Common Cause’s Media and Democracy Initiative, blasted Tuesday’s ruling and urged the FCC to act swiftly to reclassify broadband as a telecommunications service. “The Court’s decision today is poised to end the free, open, and uncensored Internet that we have come to rely on,” Copps said in a statement. “People depend on the Open Internet to connect and communicate with each other freely. Voters need it to inform themselves before casting ballots. Without prompt corrective action by the Commission to reclassify broadband, this awful ruling will serve as a sorry memorial to the corporate abrogation of free speech.”

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For nearly a decade, net neutrality has been the subject of an intense series of battles among broadband companies, Internet giants, consumer groups, policy experts, and the FCC itself. At present, the Internet largely adheres to net neutrality, which means that all Internet users have open access to the Internet, just like all Americans have the right to travel anywhere in the 50 states without a passport. Without this open access, which most Internet users take for granted, startups like Google, Twitter and Facebook might never have flourished, according to net neutrality advocates. Skype is a text-book example of a startup that was able to build a disruptive new communications service thanks to the net neutrality principle.

Cable and telecom giants have argued that because they spent billions of dollars to build the infrastructure underlying the Internet, they should have more flexibility in deciding what content travels over those networks. Net neutrality, they’ve argued in the past, allows companies like Google, Yahoo and Facebook to make billions of dollars using the “pipes” and wireless networks that the cable and telecom giants spent billions to build. In 2005, incoming AT&T CEO Ed Whitacre famously remarked that upstarts like Google would like to “use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it.”

For its part, Verizon issued a statement reiterating what it said was its commitment to the open Internet. “One thing is for sure: today’s decision will not change consumers’ ability to access and use the Internet as they do now,” said Randal Milch, Verizon’s General Counsel. “The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet. Verizon has been and remains committed to the open Internet that provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want. This will not change in light of the court’s decision.”

Although the court struck down key aspects of the Open Internet rules, net neutrality advocates were heartened by another aspect of the ruling, which upheld the FCC’s authority to oversee broadband service. FCC Chairman Wheeler issued a statement saying that he is “committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment. We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

16 comments
ApostasyUSA
ApostasyUSA

Net neutrality is a policy designed to prevent Internet providers from being able to discriminate among content - whether on political grounds or financial advantage. It is a cornerstone of an open Internet.

This decision means that major telecom companies (Verizon, AT&T, Comcast and Time-Warner Cable) will be able to decide which websites live or die. Should they dislike the content on a given site, they can now meter load times to bog it down and chase away its readers. These companies already have enough power. The internet how it was had a way of leveling the playing field for communication. Anyone who wanted to write a blog or host an online radio program could become just as influential as the mainstream media. It's a shame to see that power threatened by those who want to dominate the points of view that Americans are allowed to see.

The Internet is a telecommunications service.  ISP's are utilities just like telephone companies.  Actually, Internet traffic is almost exactly like telephone traffic.  The user dials a number (or an IP address) to communicate with a specific person or business.  Telephone numbers look like, 510.555.1234.  IP addresses look like 192.168.123.123.  It is that simple.

Just like everything else in this world, it’s all about greed. "potentially innovative services may be lost" Yea right!  Sounds like the ISP's are full of themselves.  The ISP's didn't create the internet.  The only "innovation" the ISP's are interested in is innovating better ways to profit.  

The FCC needs to classify ISP's as utilities and be done with it.

drewjgraham
drewjgraham

Everyone should be able to have their own website that is accessible at the same speed than all of the other sites on the internet. ISPs should not have any control over what sites can be viewed and/or block sites they don't like  or slow speeds when accessing sites that dont pay them money to be in "Fast lanes". The ISPs didnt create the inter net nor should they have any control over the websites

ulixes101
ulixes101

I dropped cable TV entirely last year and went straight Internet- my cable bill dropped from $125/mo to $38/mo (Netflix subscription included), and we actually started enjoying TV again- with cable TV we had one hundred channels of nothing- a wasteland of shopping networks, infomercials and ad-heavy programming. We don't miss it at all.


One year later TWC doubled our Internet bill to $60... I thought about switching- AT&T offers the same bandwidth for less but with one caveat- a 250Gb/mo streaming limit "or additional fees will apply..." (in very small type on their promotional material). My family streams about 300Gb/mo... so much for that idea...


There is no mere "possibility" of service discrimination and access blocking- Big Cable is ALREADY penalizing consumers who drop their TV services.


hyokage
hyokage

In 2005, incoming AT&T CEO Ed Whitacre famously remarked that upstarts like Google would like to “use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it.” - This quote pretty much shows everything that's wrong with the mindset of ISPs.


They're acting like they aren't getting paid, when in fact, every single user using a Google service on the AT&T network is paying AT&T. What these companies want is the ability to essentially *double charge*.  I also don't understand how these companies can argue that they're doing anything but essentially declaring a rent for any company that provides a service on the internet. I'm sorry, but if I have to shell out to Comcast, AT&T, and every other ISP to make sure my customers can access my company at reasonable speed ON TOP of all the costs and risks of a startup, that's a serious disincentive to business. 


Lastly, let's not forget that the US doesn't have top-tier internet access. What we're seeing here is essentially the worsening of an already bad situation, since let's not forget, that the US internet speeds lag behind Western Europe, Japan, and other developed countries. 


I hate to be so blunt, but you can tell who is going to benefit by who has what position, and you don't exactly see innovators on the side of dismantling net neutrality.

stephen.seymour
stephen.seymour

This is why aristocrats and oppressive leaders were dragged into the streets and beaten to death! Those judges should be shot and hanged for the world to see! 


Demandprogress.org



CarlLegg
CarlLegg

Why do private corporations own something that we all need and use on a daily basis? Like electricity or water, the Internet should be run by a public utility, not for-profit corps.

Gus4Free
Gus4Free

First order of business:  big companies had the FCC change the rules so that courts would rule that well- positioned big companies make the rules about the internet.


Second order of business: make the rules so that internet competition and dissent could be throttled.


Let’s make the phone companies like the new internet so I can pay the phone company to slow down or cut off my competition’s phone service and also cut off the phone of properties I want to buy.   (Lack of good phone service efficiently drives asset values down: buy low -- sell high!  The free market at its best!)


The free market rules!  Nevermind that the internet was directly developed by US taxpayers and much of the underlying enabling technologies are from military and NASA programs also funded by taxpayers.


Why not bring  free market concepts to US roads?  If I get enough money and connections, shouldn’t the free market determine who gets to travel where?   


Let’s keep the ball rolling in this country until “free” only applies to the markets and those “Citizens-United-Corporate-Persons”who control them.

Scottßishop
Scottßishop

Thats like gas stations saying people with BMW's can get the best gasoline at a low price... but any other car will have to use a lesser grade gasoline, and pay more. 

CraigWillison
CraigWillison

The content providers will just pass the extra expense on to their customers. Verizon wins, Netflix wins and as usual the customer loses.

lancasterpausa
lancasterpausa

How is this even legal?  Congress should work for the tax payers not AT&T or Verizon.  Lobbying should be illegal.   Who in Congress got paid that sum of money?  If their votes can be bought then they should be arrested. 


"the agency could decide to reclassify broadband as a telecommunications service, something that many net neutrality advocates believe the agency should have done in the first place. That, however, would trigger a major showdown between the FCC and broadband giants like AT&T and Verizon, which are extremely powerful on Capitol Hill and oppose such reclassification. Since 1998, AT&T and Verizon have spent more than $340 million lobbying members of Congress, according to the Center for Responsive Politics."

chacalcdn1
chacalcdn1

Again the 1% rules the 99.

The pendulum will swing back one day and the 1% will bite the dust.

ulixes101
ulixes101

@hyokage No- by all means be blunt! Thank you for summing this up so clearly- monopolies rarely work in the interest of the consumer, or the economy for that matter.

Bullsgt
Bullsgt

@chacalcdn1 The ruling class (1%) owns the pendulum and through special interest groups controls the pin

(elected courts/politicians) that holds the pendulum in place.

DanBruce
DanBruce

@chacalcdn1 Not as long as the 99%-ers are happy to be entertained by Fox News and Monday Night Football while they slurp beer and celebrate media-ocrity.

breindrein
breindrein

Im only at the sub ruling 2% class. One day i will be part of the rulers.

Tomm
Tomm

While the brilliant watch CNN and MSNBC. In an administration that could not balance a simple budget yet alone be responsible enough to manage a bank, do you really think that the right decision would be made?