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Breaking Down Verizon v. FCC
01-16-2014, 08:31 AM (This post was last modified: 01-16-2014 09:06 AM by Joe-Nathan.)
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Thumbs Down Breaking Down Verizon v. FCC

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Breaking Down Verizon v. FCC
by acurrie

Published on 01-15-2014 11:13 AM

Quote:Ok, I'm calling it... It's officially a bad week for mobile users in Canada and the USA.
Earlier this week WIND Mobile surprised everyone by pulling out of
Canada's 700MHz spectrum auction a day before it started. As I was gathering my thoughts on that, another bombshell was dropped south of the border: a U.S. Appeals Court invalidated net neutrality rules set by the FCC.

This decision has potentially dire implications for both broadband and
wireless Internet users in America, and beyond. But first, we need to
understand exactly what happened...


Before even that we need to make sure that we're all on the same page with some basic concepts. The premise of net neutrality is fairly simple: all data on the Internet should be treated equally, without any discrimination for type, source or user.

Where net neutrality applies specifically to the Internet, the very similar concept of common carriage, insofar as it pertains to telecom in the USA, dates back to the FCC's Communications Act of 1934.

Critically, while common carriage and net neutrality are similar ideas,
they are subject to notably different legislation in the United States.

Just The Facts

What we're discussing here is The U.S. Court of Appeals ruling on Case No. 11-1355, Verizon v. FCC.

In 2011 Verizon filed their legal challenge to the FCC's 2010 Open Internet Order. From this very helpful CNET FAQ,
the FCC regulations stipulate that (1) broadband providers, whether
fixed-line or wireless, must be open and transparent to their customers,
and (2) they are prohibited from blocking lawful content on their

Verizon argued that these rules violated their First Amendment rights,
and that the FCC had no authority to impose them in the first place.

The Appeals Court decision actually upholds the FCC's authority
to regulate broadband wireless providers, but at the same time points to
a flaw in the agency's classification of such. From the ruling:

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. Because the Commission has failed to establish
that the anti-discrimination and anti-blocking rules do not impose per
se common carrier obligations, we vacate those portions of the Open
Internet Order.

(This is the quote that most of the big tech blogs are using; I got mine from Gizmodo...)

In other words, a legal loophole means that Internet providers are no
longer accountable to the common carrier legislation that's been on the
books since the 1930s.

Trouble Ahead

Net neutrality certainly isn't dead, but its future is uncertain.
Harbingers of a two-tiered Internet are easy to find: AT&T is
currently entertaining the idea of sponsored data on mobile phones, and on the flip-side of the coin Netflix and YouTube could now suffer at the hands of your ISP and/or carrier.

Canada is not far behind... There's Ben Klass's complaint to the CRTC about Bell violating Net Neutrality with its mobile TV app. And rumours abound that Rogers is planning a Netflix clone, with a two-tiered Internet offering as its ultimate goal.

Author and Professor Tim Wu warns of an end to the open Internet in his book The Master Switch,
an amazing chronicle of how telephone networks, radio, film and
television each came to be as a democratizing disruption, only to be
bought up and locked down by corporate interests. A similar fate looms
over our Internet, unless we speak up and do something about it.

Further Reading

Here are some additional sources I used in preparing this post:

And in the interest of balance, not everybody thinks that the sky is falling:

A Quick Note to Front Page Readers

The comments you'll see below aren't necessarily replies to this post;
rather than start a new thread I've added these words to an existing one
— not to be misleading, but to avoid unnecessary duplication. Do
yourself a favour and check out the entire thread.

A good take on the FCC ruling:

[Image: verge-logo@2x.v1b1da50.png]

The wrong words: how the FCC lost net neutrality and could kill the internet

By Nilay Patel 17 hours ago
Quote:The wrong words.

That was the overwhelming message delivered to the FCC by the DC
Circuit yesterday when it ruled to vacate the agency’s net neutrality
rules. The FCC had tried to impose so-called “common carrier”
regulations on broadband providers without officially classifying them
as utilities subject to those types of rules, and the court rejected
that sleight of hand. Most observers saw the decision coming months, if
not years, ago; Cardozo Law School’s Susan Crawford called the FCC’s
position a “house of cards.”

I’ll be a little more clear: it’s bullshit. Bullshit built on
cowardice and political expediency instead of sound policymaking.
Bullshit built on the wrong words.
[Image: fcc-tec.jpg]

Since 1980, the FCC has divided communication services into basic and
enhanced categories; phone lines, with their "pure" transmission, are
basic, while services like web hosting, which process information, are
enhanced. Only basic services are subject to what are known as common
carrier laws, which stop carriers from discriminating against or
refusing service to customers. Over time, those categories matured and
gained new names: the basic services were tightly regulated under Title
II of the Telecommunications Act as "telecommunications services," while
enhanced services were regulated under the much weaker Title I as
"information services."

What is net neutrality?

At its simplest, net neutrality holds that just as phone companies
can’t check who’s on the line and selectively block or degrade the
service of callers, everyone on the internet should start on roughly the
same footing: ISPs shouldn’t slow down services, block legal content,
or let companies pay for their data to get to customers faster than a

In this case, we’re also talking about a very specific policy: the
Open Internet Order, which the FCC adopted in 2010. Under the order,
wired and wireless broadband providers must disclose how they manage
network traffic. Wired providers can’t block lawful content, software,
services, or devices, and wireless providers can’t block websites or
directly competing apps. And wired providers can’t "unreasonably
discriminate" in transmitting information. The FCC has been trying in
one way or another to implement net neutrality rules since 2005, but
this latest defeat is the second time its principles have been put to
the test and failed.



The FCC adopts its "Computer II" policies, establishing separate
rules for "basic" and "enhanced" communications services. Basic services
are subject to "common carrier" rules, which stop them from blocking or
discriminating against traffic over their networks.


The new Telecommunications Act creates more specific terms. Basic
services are now called Title II "telecommunications carriers," which
simply transmit information, and enhanced services that offer
interactive features are classified as Title I "information service
providers." DSL companies are classified as carriers, while AOL-style
internet portals fall under information services.


After legal confusion, cable broadband is defined as an information
service, effectively exempting the most popular consumer internet
providers from common carrier rules.


A court decision upholds the FCC's definitions, but DSL and wireless
are reclassified as information services. The FCC establishes its first
set of "open internet" rules, four principles that grant users the right
to access any lawful content and use any devices and services they want
on a network.


Comcast is found to be slowing down BitTorrent traffic, hurting customers’ ability to use the service.


The FCC requires Comcast to change its policy, but Comcast files suit
to overturn the order, arguing that the FCC has no authority to censure

April 2010

FCC chair Julius Genachowski proposes two new open internet
principles: non-discrimination, which would stop carriers from slowing
particular services, and transparency, which would require them to make
their network management practices public. His idea is to take specific
rules that govern Title II telecommunications carriers and apply them to
Title I information service providers.

December 2010

After its defeat in court, the FCC revises its standards and releases
Genachowski’s Open Internet Order, justifying it as a necessary move to
promote broadband adoption. Broadband companies are still classified as
information service providers.

November 2011

The Open Internet rules go into effect, barring wired broadband
providers from blocking, slowing, or prioritizing traffic in most cases.
In a compromise, wireless carriers were exempted from these rules.

July 2012

Verizon and MetroPCS appeal the order.

January 14th, 2014

The DC court once again rules against the FCC, striking down its
anti-blocking and anti-discrimination requirements in an almost complete
victory for Verizon. The court says that the FCC has proven that
broadband providers represent a threat to internet openness, but that
the government can’t impose common carrier rules on information service

In 2002, the FCC made what would turn out to be a pivotal mistake.
Instead of stating the blindingly obvious — internet service is a
utility just like landline phone service — the FCC tried to appease the
out-of-control corporate egos of behemoths like Verizon and Comcast by
pretending internet providers were special and classifying them as
"information service providers" and not "telecommunications carriers." The wrong words.
Then, once everyone was wearing the nametag they wanted, the FCC tried
to impose common carrier-style telecommunications regulations on them

The FCC’s first attempt to regulate broadband providers consisted of
four "open internet" principles adopted in 2005. They were meant to
"encourage broadband deployment and preserve and promote the open and
interconnected nature of the public internet" by stopping companies like
AT&T and Comcast from blocking devices or services.

In 2007 the house of cards started tumbling down. Comcast customers
found that the company was drastically slowing BitTorrent speeds and the
FCC took action, slapping it with an order to stop the throttling and
tell subscribers exactly how it managed their traffic. Comcast agreed to
the plan, but it took the whole issue to court, making a point that
would come up again and again: the FCC’s justification for the open
internet principles were vague at best. The issue was so contentious and
so important to the titans of the internet and media industries that
net neutrality became an issue in the 2008 presidential election, with
Obama issuing his support for an open internet.

Even with Obama’s support, Comcast beat the FCC in 2010 when Judge
David Tatel — the same judge who wrote yesterday’s net neutrality
decision — found that the agency lacked the authority to enforce the
open internet principles because Comcast was an information service
provider, not a telecommunications provider. The FCC had used the wrong words.

Too bad you used the wrong fucking words
The timing could hardly have been worse. Newly appointed FCC chairman
Julius Genachowski had just started work on a revamped version of the
open internet rules, adding two principles that directly addressed
Comcast's actions: companies couldn't discriminate against traffic by
slowing it beyond what was necessary to keep a network running, and they
had to be transparent about any reasonable management. When the Comcast
decision came down in early 2010, the FCC scrambled to build a stronger
framework under Title II, but Genachowski backed down under enormous
pressure from major service providers and instead reached consensus with
the industry. He declined to reclassify broadband as a
telecommunications service and further compromised by exempting mobile
providers from the regulations. The process resulted in the Open
Internet Order, which enshrined transparency and non-discrimination but
was still built on the wrong words. Critics like Susan Crawford referred
to the plan as "once more, with feeling." Comcast was happy, but
Verizon wasn’t; it took the FCC to court once again.

And as we saw yesterday, Genachowski’s Open Internet Order didn't
stand up any better. No matter how the FCC defends its rules, net
neutrality regulations for information services look a whole lot like
common carrier rules for telecommunications providers — and all Verizon
had to do was point that out.

That’s it. That’s the whole mistake. The wrong words. The
entire American internet experience is now at risk of turning into a
walled garden of corporate control because the FCC chickened out and
picked the wrong words in 2002, and the court called them on it twice
over. You used the wrong words. The court even agreed with the
FCC’s policy goals — after a bitterly fought lawsuit and thousands of
pages of high-priced arguments from Verizon and its supporters, Judge
Tatel was convinced that "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."

Too bad you used the wrong fucking words.

What happens now is entirely dependent on whether the FCC’s new
chairman, Tom Wheeler, has the courage to stand up and finally say the
right words — that broadband access is a telecommunications service that
should be regulated just like landline phones. He need only convince
two additional FCC commissioners to agree with him, and the argument is
simple: consumers already perceive internet service as a utility, and
it’s advertised only on the commodity basis of speed and price. But the
political cost will be incredible.

"Broadband providers represent a threat to internet openness."
National Cable and Telecommunications Association CEO Michael Powell —
the former FCC chairman who issued the 2005 open internet rules — has
said that any attempts to reclassify broadband as a common carrier
telecommunications service will be "World War III." That’s not an idle
threat: the NCTA is a powerful force in the industry, and it counts
major companies like Comcast and Time Warner Cable as members. That’s a
lot of influence to throw around — not only does Comcast lobby and
donate freely, but it also owns NBCUniversal, giving it the kind of
power over the American political conversation few corporations have
even dared to dream about. Put enough pressure on Congress, and they’ll
start making noise about the FCC’s budget — a budget Wheeler needs to
hold his upcoming spectrum auctions, which have until now been the
cornerstone of his regulatory agenda.

So, this is going to be chaos. All you’re going to hear from now on
is that net neutrality proponents want to "regulate the internet," a
conflation so insidious it boggles the mind. Comcast and Time Warner Cable and Verizon are not the internet. We are the internet — the people. It is us who make things like Reddit and Facebook and Twitter vibrant communities of unfiltered conversation. It is us who wield the unaffected market power that picks Google over Bing and Amazon over everything. It’s us
who turned Netflix from a DVD-by-mail company into a video giant that
uses a third of the US internet’s bandwidth each night. And it is us who can quit stable but boring corporate jobs to start new businesses like The Verge and Vox Media without anyone’s permission.

Comcast and Verizon are just pipes. The dumber the better.

It’s time to start using the right words.

Sidebar and additional reporting by Adi Robertson.

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