We hold these truths to be self-evident, that . . . All Internet Data be Treated Equally. Net Neutr
- Tree of Knowledge Research
- Jul 31, 2014
- 10 min read
The human race invented the wheel circa 3500 BC[1] . . . meaning it took tens of thousands of years to come up with a seemingly simple circular object that drastically enhanced human lives forever. How did I find this out? I “Googled it”. Today, the Google search engine is used globally over 100 billion times a month[2], yet fifteen years ago, this search engine did not even exist. Products like Google Maps, Gmail, Facebook, Amazon, Google Earth, and Android first hit the consumer scene in the early 2000s; however, in their short life span, these advanced applications have drastically changed the way society communications, congregates, and shares information. Yes, the wheel revolutionized transportation and without it, the industrial revolution never would have occurred, but – to punctuate the obvious – web-based companies’ inventive achievements in a mere decade and a half are simply astonishing. These life changing, mind-blowing innovations, however, would not exist had they never developed on a network that is free and open, a level playing field for all – the Internet we enjoy today.
The Internet was created under the premise of neutrality and openness - all Internet users have a right to access all legal online information without censorship or interference, no matter what service provider is used. Also known as Net Neutrality, the concept of maintaining an open network is essential to allow both free expression and ingenious innovations to flourish on the information superhighway that is the Internet. Over the years, the largest consumer ISPs like AT&T, Comcast, and Verizon, that provide the pipeline to the Internet, have faced little competition and even less regulation. ISPs unchecked market power, has allowed these large conglomerates to close or degrade Internet traffic with the enforcement of additional fees and/or pay-to-pay schemes on competing services. Instead of enforcing regulations that limit the discriminatory power of these conglomerates, Courts have spent the last decade bombarded with litigation concerning defining, or redefining, the services provided by ISPs and whether the FCC can impress regulatory jurisdiction over such services. This regulatory nightmare stems back to the days when the only way to access the Internet was through a dial-up connection.
When the Internet first hit the consumer market, telephone companies provided access to the Internet through telephone lines, also known as a dial-up connection. Because access to the Internet required a telephone line, as a default, Internet services fell under the same legal paradigm as conventional telephone services, thus the FCC treated dial-up connection as ‘telecommunication services’.[3] This called on telephone companies to adhere to ‘common carrier’ regulations and provide access to the Internet without any form of discrimination.[4] This legal oversight, in effect, allowed the Internet to form into the robust, free, unbiased forum, overflowing with incomparably valuable commercial, recreational, and intellectual resources, which fostered the creation and innovation of the web-based companies like Google, Yahoo, and Facebook.[5] Cable networks, however, had yet to be classified under the FCC. When these companies began offering Internet services, in particular broadband Internet services[6], the FCC had to make a decision regarding how to classify these services. Believing the market for online services would be highly innovative and competitive, the FCC exempted broadband networks from the FCC’s regulatory authority by labeling them ‘information services’.[7]
As the Internet and its users expanded, so too did the market for these services. Both cable and telephone companies grew rapidly as they were the only major entities providing access to this powerful tool. These companies convinced the FCC to re-classify all Internet services, both DSL and broadband, as ‘information services’, arguing that because phone and cable companies were now competing with each other, imposing regulations intended to prevent monopolies was no longer necessary.[8] The FCC was persuaded and reclassified all internet services as ‘information service’, effectively removing the FCC’s regulator power over the Internet market by exempting ISPs from a range of ‘common carrier’ requirements that would have otherwise applied to them had they been classified as ‘telecommunications service.’[9]
The FCC was misled in believing ISPs would remain competitive – although the companies that used the Internet remained highly competitive, the ISPs, which controlled access to the Internet, became less and less competitive. AT&T and Verizon emerged as two of the few major telephone companies[10] and the cable industry integrated into just a few mega firms all of which became the ISPs that control access to the Internet today. Now, practically every consumer in the United States has a choice between two broadband providers – a cable company and a phone provider.[11] This lack of competition in the market for Internet services has caused broadband services to fall far behind much of the world and even some in the developing world.[12] In the absence of regulatory authority by the FCC and free of any competition to check their behavior, these big ISPs have the capacity and incentive to discriminate against unaffiliated Internet content and application providers.[13] For example, in 2005, Madison River Communications, a rural telephone company serving lines in Illinois, North Carolina, Georgia, and Alabama, blocked its customers’ access to Vonage, an Internet based phone service provider, because Vonage refused to pay Madison’s high charges for completing calls placed by Vonage customers.[14] Vonage complained to the FCC and although the Court acknowledge that no statute or court decision existed that addressed whether Madison was entitle to engage in self-help for Vonage’s non-payment, the Court did approve the FCC decree forbidding Madison from further blocking and fined the company $15,000.[15]
The Madison decision was the first FCC enforcement of the open access principle of Net Neutrality and implied the FCC had certain regulatory power over ‘information services’; however, the limit to this power was not clarified. Although ISPs remain free of ‘common-carrier’ regulation, the access and distribution of applications and content on the Internet is dependent upon the FCC-regulated industries, which by extension, establishes the FCC’s general subject matter jurisdiction over the Internet.[16] Moreover, Congress has directly mandated that the FCC protect the citizenry from certain deleterious and illegal Internet content.[17] Despite this, over the past couple of years, the FCC has tried to implement fundamental regulatory safeguards for the Internet to prevent ISPs from engaging in anti-competitive behavior but courts have consistently knocked it down employing the argument that because the FCC labeled ISPs ‘information services’, they denied themselves regulatory authority over such services.
In Hart v. Comcast, for example, the FCC tried to sanction Comcast for slowing down data for large peer-to-peer file-sharing site BitTorrent.[18] Comcast argued that slowing BitTorrent was “reasonable network management” because the application used a large amount of finite resources; therefore, slowing the single application down protected the vast majority of its broadband users from a whole systematic hindrance.[19] In a unanimous decision, the U.S. Court of Appeals for the D.C. circuit sided with Comcast.[20] Although the court appeared open to recognition of FCC jurisdiction when proper evidence can be establish a proper threat to competition, the court found that the FCC had overstepped its bounds.[21] In effect, this decision removed the regulatory powers of the FCC that otherwise would prevent a company such as Comcast from blocking or slowing down video sites like Netflix or YouTube from its network.
In another stride to impose regulations over ISPs, the FCC adopted its Open Internet Order (“Order”) in 2010[22], establishing three specific rules to protect the openness of the Internet: (1) transparency between broadband providers and their consumers; (2) no blocking of lawful content, applications, services, or non-harmful devices; and, (3) no unreasonable discrimination in transmitting lawful network traffic.[23] Again, the FCC’s regulatory authority was challenged, in a widely contentious case, Verizon v. FCC.[24] The telephone giant, Verizon, argued that by adopting the Order, the FCC improperly imposed what amounted to ‘common carrier’ regulations, which could not be enforced on ‘information services’. The D.C. Circuit Court agreed with Verizon, vacating the Order’s anti-discrimination and anti-blocking rules, concluding these rules amounted to ‘common carrier’ regulations, but upholding the transparency rules.[25] Yet again, efforts to prevent discriminatory power-plays of ISPs were denied. The decision comes coincidentally at a time when Comcast is pursuing FCC approval of its proposed $45.2 billion merger with Time Warner Cable, which would put a vast library of television and movie programming under the control of the nation’s largest cable provider.[26] Together, the two companies will control two-thirds of the broadband cable market and the Internet pipeline of over 30 million households. In the hearings concerning the merger, many lawmakers expressed concern that this merger will dwarf rival cable firms and give Comcast the power to implement discriminatory pricing and other strategic tools to stifle viewer access.[27]
The FCC is currently in a tight spot. Reclassifying Internet access services from ‘information services’ to ‘telecommunications services’ is one option that would reinstate clear legal authority on behalf of the FCC, allowing it to enact ‘common carrier’ regulations over ISPs. The FCC could then bolster the force of Net Neutrality principles and revive both the anti-blocking and anti-discrimination rules created under the Open Internet Order.[28] Some argue that reclassification would grant the FCC too much power, leading to Internet price controls, discouraging innovation or emplacing regulations levied on other media like broadcast television and radio.[29] What option is better- placing full control over Internet access in the hands of Big Businesses, allowing them to dictate what parts of the Internet their customers can and cannot access, or giving the government regulatory power to ensure the Internet remains neutral? Regardless, based on recent court cases and fierce industry opposition, reclassification seems highly improbable. The moral of this long, regulatory-nightmare: the Internet was created as an open system- a platform for free speech and opportunity for billions of users. In order to maintain this basic dogma, all data on the Internet should be treated equally by ISPs, with or without government control.
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[1] David A. Anthony, The horse, the wheel, and language: how Bronze-Age riders from the Eurasian steppes shaped the modern world. Princeton, N.J: Princeton University Press. p. 67 (2007).
[2] Google Company, Our history in depth, available at: http://www.google.com/about/company/history/
[3] To combat AT&T’s extensive market power and anti-competitive practices in the telephone industry during the 1990s, the United State’s Government enacted the Communication Act of 1934, as amended by the Telecommunications Act of 1996, labeling telephone services ‘telecommunications services’ and granted regulatory power over such services in the Federal Communications Commission (“FCC”). Under this Act, the FCC was authorized to enforce ‘common carrier’ regulations on telephone service provides to ensure these corporations provided their services on a nondiscriminatory basis- all who sought telephone services were granted those services only subject to reasonable terms, conditions, and fees.
[4] Jordan Wellington, Free the Net, 2 Brook. J. Corp. Fin. & Com. L. 533, 539 (2008); See Jay Stanley, ACLU, Network Neutrality 101: Why the Government Must Act to Preserve the Free and Open Internet, 13 (2010), available at https:// www.aclu.org/files/assets/netneutrality_report_20101021.pdf
[5] Andrew Jay Schwartzman, FCC ‘Net Neutrality’ Rules Would Keep the Web Free for Speech and Trade, U.S. News & World Rep. (Nov. 24, 2009), http:// www.usnews.com/opinion/articles/2009/11/24/fcc-net-neutrality-rules-would-keep-the-web-free-for- speech-and-trade (“Net neutrality will ensure that the Internet continues to fuel growth and innovation for the American economy.”).
[6] Broadband refers to the wide bandwidth characteristics of a channel that can transport multiple signals and traffic types simultaneously. In contrast, dial-up communication transports information through a single channel. Broadband services are marketed as being much faster than dialup. See Virgin Media, Virgin Media delivers world's fastest cable broadband, News release (July 22, 2011).
[7] National Cable & Telecommunications Ass’n v. Brand X Internet Services, 125 S. Ct. 2688 (U.S. 2005)(finding that the FCC provided a reasoned explanation for its decision when it concluded that changed market conditions warranted different treatment of cable modem service from DSL); Gerald R. Faulhaber & David J. Farber, The Open Internet: A Customer-Centric Framework, 4 Int’l j. Communications 302, 303-04 (2010) (finding that wireless broadband serves are subject to intense competition and therefore should not be regulated).
[8] Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, 20 FCC Rcd. 14853 (2005) (reclassifying DSL as an information service), petition for review denied, Time Warner Telecom, Inc. v. FCC, 507 F.3d 205 (3d Cir. 2007).
[9] Id.
[10] In 2008, the FCC auctioned off 62MHz of additional wireless spectrum made available in the conversion from analog to digital television. Verizon and AT&T acquired the share of the newly available spectrum. “According to an analysis by The Associated Press, the two telecom companies [AT&T and Verizon] bid more than $16 billion, constituting the vast majority of the overall $19.6 billion that was bid in the FCC auction. With Verizon Wireless and AT&T dominating the auction so completely, hopes that the auction would allow for the creation of a new nationwide wireless service provider were dashed.” W. David Gardner, Verizon, AT&T Big Winners in 700 MHz Auction, InformationWeek, March 20, 2008, available at http://www.informationweek.com/news/mobility/showArticle.jhtml? articleID=206905000.
[11] Eduardo Porter, Keeping the Internet Neutral, N.Y. Times, May 8, 2012, http://www.nytimes.com/2012/05/09/business/ economy/net-neutrality-and-economic-equality-are-intertwined.html?ref=netneutrality.
[12] See Household Download Index, Net Index, http://www.netindex.com/ (last updated Oct. 24, 2013) (comparing countries in differex7nt broadband speed categories).
[13]Nicholas Economides, The Net Neutrality Debate from the Antitrust Perspective, Presentation at ABA Brownbag on Antitrust (Sept. 2006) (In the absence of competitive constraints, the major cable and telephone companies could “leverage [their] market power in broadband access to the content or applications markets.”); Tim Wu, Why Have a Telecommunications Law? Anti- Discrimination Norms in Communications, 5 J. Telecomm. & High Tech. L. 15, 16–17 (2006) (arguing that net neutrality rules should focus on ending discriminatory, anticompetitive practices by those who control the infrastructure of the Internet).
[14]See Madison River Communications, LLC and Affiliated Companies, Consent Decree, 20 F.C.C. Rcd. 4295 (2005).
[15] Id.
[16] Formal Complaint of Free Press & Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to-Peer Applications, 23 FCC Rcd. 13028 (2008), rev'd, Comcast Corp. v. FCC, 600 F. 3d 642 (D.C. Cir. 2010). See Vonage Holding Corp. v. The Minn. Pub. Utils. Comm'n, 290 F. Supp. 2d 993, 994 (D. Minn. 2003)(upholding FCC preemption of state VoIP regulation); Communications Act § 1, 47 U.S.C. § 151 (2006); Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Notice of Proposed Rulemaking, 17 F.C.C. Rec. 3019 (2002) (establishing the FCC’s subject matter jurisdiction over “wire . . . communication”).
[17] See Communications Decency Act, 47 U.S.C. 230(b), Protection for private blocking and screening of offensive material.
[18] See Formal Compl. Of Free Press & Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to-peer Applications, 23 FCC Rccl. 13,028, 12,057-58; Preserving the Open Internet Broadband Indus. Practices, Report & Order, 25 FCC Rcd. 17,905, 17,951-55 (Dec. 23 2010) (FCC rules expressly allow ISPs to engage in “reasonable” network management practices).
[19] Id.
[20] Id.
[21] See Comcast, 600 F. 3d at 659-61.
[22] Preserving the Open Internet Broadband Indus. Practices, Report & Order, 25 FCC Rcd. 17,905 (Dec. 23 2010).
[23] Id. at note 1, app. A § 8.3, 8.5, 8.7.
[24] Verizon v. FCC, No. 11-1014 (D.C. Cir. Apr. 4, 2011) (“The order will therefore be subject to judicial review.)
[25] University of Illinois, Net Neutrality: Past Rulings and Future Debate, Global Current (May 20, 2014), available at: https://publish.illinois.edu/globalcurrents/2014/05/20/net-neutrality-past-rulings-and-future-debate/
[26] Shalini Ramchandran, Dish Urges FCC to Reject Comcast Acquisition of Time Warner, The Wall Street Journal, (July 9, 2014) (Satellite TV provider Dish Network Corp urged the FCC to reject the merger fearing it would give the combined cable companies too much clout in the broadband marketplace.) Available at: http://online.wsj.com/articles/dish-urges-fcc-to-reject-comcast-acquisition-of-time-warner-cable-1404933360
[27] Tim Barwell, Comcast, NBC Deal Faces Financial, Legal Obstacles, WSJ Reports. Bloomberg (October 2009).
[28] Kathleen Ann Ruane, Net Neutrality: The FCC’s Authority to Regulate Broadband Internet Traffic Management, Congressional Research Service (March 2014), available at: http://fas.org/sgp/crs/misc/R40234.pdf
[29] See Blake D. Morant, Symposium: First Amendment Issues in Emerging Technology--The Search for A Viable Theory of Regulation in the Digital Age, 47 U. Louisville L. Rev. 661, 675 (2009) (describing the Red Lion era of Supreme Court approved government intervention in broadcast as “the iconic bad seed of governmental regulation”).
