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Summary:

Last Tuesday a federal court of appeals called into question the FCC’s ability to regulate Internet access, but after talking to people in D.C., the consensus is that regulations guaranteeing net neutrality will survive, and the FCC will begin a proceeding to reclassify internet access.

A federal court of appeals said last Tuesday that the Federal Communications Commission wasn’t justified when it censured Comcast back in 2008 for blocking peer-to-peer files. At the time, I said the ruling could call into question the FCC’s ability to regulate several aspects of high-speed Internet service, including network neutrality, but after talking last week to people in D.C., it became clear that the consensus is in fact that regulations guaranteeing net neutrality will survive, and the FCC will likely begin a proceeding to solidify its authority by reclassifying Internet access.

The issue isn’t that Comcast sued the FCC, but that the FCC was on weak footing thanks to previous decisions it made starting in 2002. In that series of rulings, the agency decided that various forms of high-speed Internet access should not be classified as a transport service like a telephone line is, but rather as an information service, like Google or Facebook. In 2002, the FCC classified cable as an information service, and did the same with DSL in 2005, wireless broadband in 2007 and broadband over power lines in 2008.  The agency decided that Internet access was more than transport because ISPs also offered email accounts, portals, storage and other technologies on top of the transport layer.

In a GigaOM Pro report published late Friday (sub req’d), I lay out the options the FCC has before it from a regulatory perspective, and explain how we got here and where the agency will go next. I also outline how the ISPs will likely push for Congress to get involved, rather than see their Internet access reclassified as transport, because that reclassification gives the FCC more regulatory authority over their pipes.

So keep an eye on the FCC, because we’re likely to see it issue a Notice of Inquiry in the coming weeks on the topic of reclassifying high-speed Internet access (not broadband, which may encompass the services such as email and storage that led the FCC to classify the offering as an information service rather than transport in the first place). It will undoubtedly be followed by months of comments and inflammatory rhetoric about ISPs already being committed to net neutrality and arguments saying that the FCC wants to regulate “the Internet” (it’s trying to regulate access to it, not the web itself).

Once the FCC gets through the reclassification process, which could take at least six months, the net neutrality proceedings will stay open and the agency will likely take up the topic once its authority is firmly in place. Also, expect the FCC to follow any of its orders reclassifying Internet access as a transport service with later proceedings in which it says it won’t regulate certain aspects of high-speed Internet access, such as tariffs and peering agreements.

Amid this wonky debate, keep in mind that regulating communications transport is what the FCC was set up to oversee, and the current commission apparently intends to do it. It’s not going to be incredibly aggressive about it (otherwise it could issue a Declaratory Order saying that high-speed Internet access is a transport service without going through the comment period), but eventually net neutrality regulations that do contain provisions allowing ISPs to manage their networks will be passed. So Comcast didn’t kill net neutrality, but it did delay it for a while.

Read my full analysis on GigaOM Pro here.

  1. Net neutrality has been rejected by DOJ, The appeals court, and does not have the support of voters, according to recent polling. You may have to wait until after the midterm election before your religion gains new and meaningful traction.

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  2. The issue as to whether increased regulation is warranted has less to do with how broadband is classified (information or transport) than it is does with whether or not the market, including consumers, would benefit from a heavier Federal regulatory hand.

    It is very hard to argue that the market would be better off. Only the thread worn example of Madison River is ever offered up as an example of an ISP blocking traffic it dislikes (VOIP in that case). Other than that, a largely unregulated market has made broadband available to 95% of the country at speeds that exceed most European countries and at costs 1/40th those of dialup only a decade ago.

    “First, do no harm” was not really part of the Hippocratic Oath but many believe it was and it sounds like it should have been. Government regulators should adopt a similar “first, do no harm” Bureaucratic Oath as they contemplate remaking already successful markets.

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  3. “not…as a transport service like a telephone line is, but rather as an information service, like Google”. Why is it either/or? Some ISPs are one, most are both. Bureaucratic blinders! If they do any transport, they are a transport service. Similarly for info services. Duh!

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  4. While I want the ability to use any protocol available and not have my ISP block it, this is not the government’s job to enforce.

    Most ISP’s state upfront what is allowed and what isn’t. For example, most personal class services expressly prohibit running a public web server or email server on the connection.

    The issue should not be whether or not Comcast can limit the use of it’s network, but did they break any contractual obligations (explicit or implied) in doing so.

    The government should enforce contracts between private parties, not mandate what should be in the contract.

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  5. Stacey, you said “…and arguments saying that the FCC wants to regulate “the Internet” (it’s trying to regulate access to it, not the web itself).”

    We’re dealing with an increase in Socialism all around us. By definition, they want to control the message. The ONLY reason to spend time on Net Neutrality is to lay the groundwork for more CONTROL. We should all oppose “Net Neutrality.”

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  6. Heather Tishman Monday, April 12, 2010

    @ Kevin Walsh said, “It is very hard to argue that the market would be better off. Only the thread worn example of Madison River is ever offered up as an example of an ISP blocking traffic it dislikes (VOIP in that case). Other than that, a largely unregulated market has made broadband available to 95% of the country at speeds that exceed most European countries…”

    Wow, OK pal. First off, Madison River (1), Comcast Blocks BitTorrent (2), and Windstream hijacks the firefox Google tool bar just last week (3)…

    But that aside, the reason we’ve not seen more overt violations is precisely because we’ve only been in this hands off oversight world for about 5 years now, during which time AT&T, Verizon, and even Comcast itself were all subjected to openness requirements via merger conditions. That, and the spotlight shone on this issue stemming from the “use my pipes for free” Ed Whitacre moment and the 2006 legislative battle has kept most of the ISP’s draconian discrimination schemes at bay.

    Also, your understanding of how the U.S. fares versus international markets is just not supported by the data.

    Simple fact is, some light-touch non-discriminatory interconnection requirements are what’s needed to ensure a properly functioning communications infrastructure. Though it rarely is mentioned, enterprise broadband services remain regulated under Title II, and the sky hasn’t fallen there.

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    1. Heather, my language was intentionally restrictive, i.e., “blocking traffic it dislikes,” because this is how (to use your expression) we’re led to believe the sky will fall in the absence of more restrictive regulatory oversight. Madison River blocked VOIP traffic to protect its POTS revenue stream. This was admittedly stupid and was dealt with using extant regulatory powers. Comcast was attempting (in an admittedly ham-handed way) to deal with bandwidth overloads by injecting rested packets into P2P streams. I’m not as familiar with the Windstream case but it has evidently already been dropped in the face of negative customer reaction.

      I don’t go along with the position that bad people out there just haven’t had enough time to do evil things as a reason to regulate the market. Five years is an eternity in this industry.

      As to data, the FCC relied on, among other sources, Akamai’s “State of the Internet” report (http://www.akamai.com/stateoftheinternet/). It pretty clearly shows that average speeds in the US lead major European countries and are only a bit behind the smaller ones. Most countries with impressive broadband speeds are small, dense and have a history of state-owned PTTs.

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  7. Regardless of what legal and congressional development occur on the topic of net neutrality, if ISPs and broadband network operators cannot monetize the dramatic growth in traffic and demand for capacity because of video, then it’s quite possible most of us in the USA will be stuck with limited network investment and limited capacity growth (result = traffic jams). I’d much rather have “toll express lane” in my last mile access network that Netflix and other service providers can pay for as part of the subscription I pay them for broadband video service — I’ll pay extra to get rid of the buffering.

    http://www.hulu.com/watch/131068/saturday-night-live-update-bobby-on-youtube?c=Comedy#s-p2-sr-i3

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  8. [...] Comcast Didn’t Kill Net Neutrality Last Week (gigaom.com) [...]

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  9. This is a twisty, wonkish area to be opinionating about, but here goes. The FCC’s case was weak. But that was mostly a consequence of this agency’s backpedaling and mishandling of open access or “UNE-L”. The TRO of 2003 was the final nail in the coffin, which was mostly upheld by the DC Court of Appeals. The fight this time was around narrowish legal issues (“ancillary authority”).

    The rest of the world has open fiber/cable networks with multiple providers and reasonable wholesales rates that encourage competition. So in a alternate alien socialist universe (France), if one provider starts messing with your access, you can hop to another one. Sounds like freedom.

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  10. [...] Read my full analysis on GigaOM Pro here. follow the link for full article on gigaom.com [...]

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