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It’s baaaack. Net neutrality to get its day in court

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Like some hideous policy monster that won’t go away, network neutrality is hitting the headlines again. Verizon(s vz) and Metro PCS(s pcs), the two operators that sued the Federal Communications Commission last year over its rules forbidding ISPs from discriminating against packets on their networks, won a victory on Thursday. Their case against the FCC’s net neutrality rules will go forward.

The D.C. Circuit Court of Appeals, the same court that had ruled against the FCC’s authority to impose rules that govern the services flowing over the Internet, will hear the case. It also denied the FCC’s request to hold off on a hearing while the agency considered a petition before it, asking for further definition of its rules regarding “specialized services” for business customers. Analysts at Stifel Nicolaus and Co. expect the court to set a schedule this spring with oral arguments in the fall. The group expects a ruling by winter.

And apparently it doesn’t expect the results to favor the FCC, which could be a blow to Silicon Valley companies leery of schemes by telecommunications providers to charge them for accessing their pipes, as well as for consumers who already pay for Internet access and expect their bits to keep on flowing unabated. From the Stifel research note:

A D.C. Circuit three-judge panel in April 2010 undercut the FCC’s broadband regulatory authority under its Title I “ancillary” jurisdiction in shooting down a 2008 order sanctioning Comcast (CMCSA) for its treatment of BitTorrent P2P traffic. The FCC tried to write its December 2010 Open Internet order to respond to the court’s objections by citing other sources of statutory authority, and there could be a different panel this time, but the judges will still be bound by the precedent from the previous ruling, making the FCC’s task difficult, in our opinion.

If the FCC loses, the next stop is the Supreme Court. In the meantime, and if the nation’s top court decides to favor the telcos, the FCC could be stripped of its authority to regulate the nation’s cable, DSL and wireless Internet providers, thanks to regulatory decisions the agency made when the web was young. That means the FCC would turn from a letter-writing gadfly occasionally stepping in on behalf of consumers to a powerless relic of an agency as the web becomes more central to our lives.

Hear that Internet fans? Winter is coming.

Image courtesy of Flickr user Mom Smackely.

4 Responses to “It’s baaaack. Net neutrality to get its day in court”

  1. Kim Lewis

    Great article Stacy. Rather than trying to restrict content distribution, Telcos and ISPs should instead further monetize their networks by adding CDN services so that they can both offset their costs and offer content providers an additional service while simultaneously diversify their own product portfolio. We recently wrote a blog about this topic and how Telco CDNs can help to make this a win/win for service providers, content owners, and consumers alike:

  2. Internet access must be defined to be a public utility. It’s that simple. The benefits to society would out weight the detriment caused by preventing a handful of companies to make huge profits. That is the criteria that has been used in the past to judge whether a service qualifies as a utility or not.

    The Internet can provide telephone service, it can provide television service, it can serve as a platform for MILLIONS of other businesses. But it can ONLY do this if it is defined as a public utility. If defined as a utility, government would be capable of relying on the Internet to enable government transparency (give the public read-only access to the systems public officials are required to make use of to do their jobs) and more.

    The fact that most large broadband providers are also the large content distribution companies is radically dangerous. Content distribution is worthless thanks to the Internet. Anyone can do it better than a big company can now. Those companies, given control of broadband, will try to claim the larger portion of every single thing done with the Internet. They’ll forbid or make impractical free services at all, and make it prohibitively expensive for anyone to operate an Internet-based business. They are already doing this, trying to gouge Netflix out of existence, restricting the upstream of consumer accounts (so they can fleece business customers).

    If business users paid the same as end users, and it was a flat metered service based on usage (like electricity or water), and those providing it were forced to limit the price of service to 3 or 4% more than the actual cost of providing the service (which is rapidly approaching nothing), Internet access would be cheap and far more useful. It would benefit the country in ways we can’t even imagine now. It would do away with a handful of billionaires, sure, but they’ve done their damndest to make sure they’ve never offered us a fair deal in the first place, so we won’t miss them. And where will their billions go, exactly? They will get spread out among the millions of new workers who are able to work over the Internet without worrying about a company stepping in and saying “Hey, we noticed you’re making some money…. why don’t you start giving us a big chunk of that?”

  3. txpatriot

    “Powerless relic of an agency”? Wow, hyperbole much?

    Despite your rhetoric to the contrary, the FCC still has the option of re-regulating broadband as a Title II service. They would have the burden of explaining their change in course, but the FCC has changed its mind before. They can do it again.

    I know it’s hard for you to do Stacey, but please try to stick to the facts and spare us the drama.