US court rules against FCC on net neutrality

http://finance.yahoo.com/news/US-court-rules-against-FCC-on-apf-78990100.html?x=0&.v=4

by viggity • 16 years ago

89 66 16 years ago

finance.yahoo.com

Can we revoke their rights to location based monopolies?

jamesbressi4• 16 years ago

Yes, in a way. You would have to work with the mayor or counsel members of your township in the U.S. They are responsible for controlling what companies may lay wire and services in your township.

Note: Townships get a nice kickback per subscriber within their borders. Yes, another money game. And yes, that kickback is a negotiable price-per-subscriber...

mwsherman• 16 years ago

Their monopolies exist precisely because of these municipal restrictions, which I'll refrain from calling shakedowns. The higher the barrier, the fewer competitors you'll have.

jamesbressi4• 16 years ago

This is nuts. Maybe the court ruling is correct that the FCC lacks authority to enforce net neutrality, but we have to somehow figure out how to put an end to this madness.

It is a case that has much greater implications than just unfair treatment of traffic, and no I do not mean interference with the national broadband initiative. I am speaking of the precedent it sets.

Unfortunately, still a great deal of the country has no idea about this issue, what this means and it will go unnoticed. Even if it does come into the lime-light of issues (doubtful), because of the lack of understanding by the majority of constituents in this country it will be such an easy topic to spin.

Depressing.

some1else2• 16 years ago

I hope this thing gets settled in congress, as it has been suggested and attempted by civil-rights groups. Whatever precedence gets set, it will spread to Europe too, and I really hope a mistake like this doesn't determine the way westerners get to use internet in the future :-S

calcnerd256• 16 years ago

Ideally, whoever grants the telcos monopoly power (Is it the FCC that does that? I don't know.) should be able to enforce net neutrality. If that's the FCC, they should be able to enforce it; if it's someone else, they should.

grandalf15• 16 years ago

So you are arguing that the FCC should have more power? Fuck I'd better hurry up and swear on the internet while it's legal.

stan_rogers2• 16 years ago

WTF??? I may not be a fancy big-city lawyer, but I would think that even someone as dense as a Supreme Court Justice (and obtuseness seems to be a job requirement these days), let alone a clearer-thinking lower court judge, should be able to see the clear applicability of common carrier statute and precedent here. Unless and until the ISPs actually create, procure and provide exclusive content and only their own content (goods) via their delivery means, they are bound by common carrier. That goes back to what, Domesday?

wmf3• 16 years ago

Don't the FCC's own regulations say that ISPs aren't common carriers? Don't recent acts of Congress (e.g. the Telecommunications Act) overrule ancient common law precedents?

stan_rogers2• 16 years ago

Only if the adjudicators agree with statute and regulation -- and there is clear parallel with every other application of common carrier law, so what the courts should be finding is that the ISPs are de facto and de jure common carriers, despite legislation to the contrary. To put it technically, they are the same in essence, and the rule of law says that when two things are the same in essence, they cannot be treated differently.

clammer• 16 years ago

This was a clear victory for property rights. They own the equipment; they should get to control how their property is used (in accordance with their contracts).

The problem here isn't the lack of regulation, it's the lack of competition (as other's have pointed out). No ISP can afford to be shackling their users in the face of unshackled competition.

I hope we'll have a vibrant 4G broadband market in the next 5 years.

jamesbressi4• 16 years ago

While it is a clear "win for property rights", when their property is delivering you, the subscriber, to a "free market", they should only be able to charge you for delivery, not say "I'll let you in the free market, but you can only browse certain stores or for certain periods of time, etc."

That is ludicrous.

Could you imagine flying USAIR to a city and when getting to the airport you were under USAIR's restrictions in that city?

Sounds like a crazy analogy until you really think about it.

fondue• 16 years ago

Wouldn't then there be a market created where you weren't locked into these restrictions?

In addition, how long will these cable monopolies last when we'll be able to erect wireless towers and get internet that way, completely superseding cable carriers?

tumult• 16 years ago

Then I want my chunk of the property back, the amount that the taxpayers shelled out to subsidize the telcos laying down said equipment, and which Comcast and others readily accepted.

sielskr• 16 years ago

If parent means to assert or imply that taxpayers in the U.S. paid for more than a tiny fraction of the costs of laying down the copper and fiber over which residential internet service is delivered in the U.S., I would like references supporting that assertion. The argument parent probably wants is that in much or most of the U.S., local governments granted the telcos and cable companies a government-created monopoly in the local jurisdiction, in exchange for which it is reasonable for government to expect the companies to submit to certain rules, especially since the rules are essentially the same as the rules by which monopoly power in the railroad, telegraph and telephone industries were somewhat-successfully ameliorated, and especially since there exists in the fundamental architecture of the internet a bright line in the form of the boundary between the IP layer (and everything below it) and services that ride atop it that can serve as the target of network-neutrality rules, and especially since most of the architects or "technical founding fathers", many of whom are libertarians and lovers of private-property rules, BTW, of the internet support the imposition of network-neutrality rules. Reader who doubt the existence of a "bright line" at the IP layer should make sure they have read the classic paper "The End-to-end argument in system design" and the history of the internet since the publication of that paper. (In other words, the "quality of service" arguments used by the telcos etc to argue the impracticality of network-neutrality rules have always been on the losing side of debates for the first 30 or 35 years of the history of the internet, and consequently suffer from a high burden of proof.)

For these reasons, even a lover of property rights and constitutional limits on government like myself can support network neutrality after having familiarized myself with the pro-network-neutrality arguments by people with a track record for good calls in internet design and internet policy and with the history of industries with very strong networks effects, like the railroad, telegraph, telephone, cable and residential-internet-service industries.

And I have to say that the largeness of the number of opinions arrived at with almost no knowledge in this comment section is very depressing.

_delirium• 16 years ago

They don't have the usual responsibilities of property owners, though, like a requirement that you maintain sufficient control over your property to prevent it from being used for activities that are illegal or a nuisance.

In telecommunications, common carrier status was a trade: if a telecom treats their network as neutral infrastructure, not discriminating between customers or exercising control over the data that passes over it, they'll be indemnified from legal responsibility for the data that passes over it.

ISPs are attempting to get (and have largely gotten) one half of that understanding without the other half. They want the legal indemnification of common carrier status without the requirements of neutrality that it entails. (The various "safe-harbor" laws passed over the past 20 years, with no strings attached, largely give them that.)

jamesbritt2• 16 years ago

"They own the equipment; they should get to control how their property is used (in accordance with their contracts)."

The Internet was developed with tax-payer dollars. Parts of it are now owned and maintained by various corporations, but the existence of this part of their business is based on public investment.

How is it then that select businesses then get to have exclusive control over what gets passed over certain parts of the 'Net?

I'm not a fan of centralized control nor do I want a nationalized 'Net. I would prefer as a much of a free market approach as possible. But we're well past the point were private companies are going to be inventing and building their own infrastructure, with free and open competition, and arguing for the telcos on the basis of private property or free enterprise seems disingenuous.

grandalf15• 16 years ago

If anyone here supports Net Neutrality, I challenge you to explain why you want the FCC to have more power. Do you approve of its regulation of content? Would you like to see such regulation occur on the internet?

The FCC regulating the internet is a sure path to speech restrictions (censorship, etc.) and taxation of the internet. Why? Because it becomes a one stop shop for cultural conservatives who want the internet regulated.

jamesbressi4• 16 years ago

I believe issues are being confused among those passionate on net neutrality.

I don't think ANYONE here wants the FCC to have any further jurisdiction (especially over the internet) and power.

People view it as a loss for the net neutrality fight and overlook the implications of the FCC being the white knight to win the battle.

BUT, I think many here agree that the FCC should be able to enforce net neutrality in the sense of having jurisdiction over the delivery of the service known as the internet and it stops there, just like telephone. The FCC can't sensor what you say on a telephone, but they could have dropped the hammer on a telco for not allowing you access to certain area codes or making you wait longer to connect with someone just because they feel like it.

grandalf15• 16 years ago

Do you think the FCC (or those who lobby it passionately) will stop with a small bit of power voluntarily?

jbooth• 16 years ago

Slippery slope arguments are almost never persuasive.

Giving the FCC a mandate to enforce openness is in no way giving it a mandate to enforce censorship. The world doesn't exist on a 1-dimensional plane between zero FCC power and ultimate FCC power. There's other stuff going on.

grandalf15• 16 years ago

What else is going on? Currently there are lots of entrenched lobbyists who influence FCC policy. This is why things like nipple slips or use of the word "ass" on prime time TV are a big deal.

Do you think those lobbyists wouldn't immediately start lobbying for internet "decency" regulations the minute the FCC gained additional power to regulate the internet?

Such restrictions will start in obvious ways on largely uncontroversial subjects -- perhaps a law that appears at first to target only pedophiles or hard core pornography viewing by minors -- then more and more ambiguity creeps in until you have horrible censorship going on.

Have you read quotes by recent FCC chairmen? They generally consider themselves to be stewards of good taste. This is scary stuff.

jamesbritt2• 16 years ago

"Giving the FCC a mandate to enforce openness is in no way giving it a mandate to enforce censorship."

Exactly.

It's similar to how the government now has the power to enforce the First Amendment. While one can argue with how well they do that, I don't think anyone wants that power removed.

argv_empty• 16 years ago

All it takes is for a new law to state that the FCC has the responsibility to keep the internet an open medium. Then the FCC is explicitly given the authority to maintain net neutrality and disallowed from censoring it.

grandalf15• 16 years ago

The FCC has shown itself to be tremendously sensitive to lobbying efforts from cultural conservatives.

All it will take are a few "harmless" bills that penalize content that everyone already agrees is offensive, and the next thing we know we have to worry about typing "fuck" in a HN comment, unless HN uses a NC17 SSL cert (for example)

lallysingh• 16 years ago

Lobbyists for cultural conservatives don't have anything (financially) compared to the porn companies they'd be competing with. A few shell companies and they can buy as many members of congress or senate that they wish.

wmf3• 16 years ago

Perhaps NN should be under the FTC instead.

sili• 16 years ago

This situation looks similar to natural gas transportation. There needs to be separate companies who provide internet access and who own and operate transmition cables. Cable operators would not care about what kind of traffic flows through their wires as long as it's paid for. ISP's would rent bandwidth from cable providers and re-sell it to customers. Since there will be less of an entry barrier to become and ISP there would be more competition and customers in an area would not depend on the whim of one company.

grandalf15• 16 years ago

I think it's important to point out that firms like Google which have supported net neutrality, have done so to support their own business models.

Microsoft 'cloned' google and created Bing in a very short time. As computing power increases this task gets easier and easier. Plausibly, comcast could create its own "google" and direct all search traffic there. It could sell ads and use the ad revenue to lower monthly subscription fees to its customers.

If the service works well enough (i.e., if google is actually clonable) then most consumers wouldn't care. That's precisely Google's concern. Why should it give up its revenue so that Comcast can start its own revenue stream?

Think about Google's share price and all the billions of dollars of ad revenue. That's what this issue is about. Google has invested hugely in becoming "infrastructure" but the price of cloning that infrastructure is quickly decreasing... so Google is trying to stop it by any means necessary.

Goronmon• 16 years ago

Plausibly, comcast could create its own "google" and direct all search traffic there. It could sell ads and use the ad revenue to lower monthly subscription fees to its customers.

Except they wouldn't do that. They would use QoS to make sure their search engine was the only one usable to their customers and then they would charge extra for access to the search engine as an added feature.

grandalf15• 16 years ago

What's wrong with that? Do you really think there would be so little benefit from building a good search engine that Comcast would build a lousy one? They could even license one from any number of third parties.

billybob4• 16 years ago

"I think it's important to point out that firms like Google which have supported net neutrality, have done so to support their own business models."

Right - business models which depend on competition. As opposed to those that depend on blocking customers' access to your competitors.

Comcast is welcome to steal market share from Google the old fashioned way - by building a better product. I'll use it. But if I log on and find I have no choice - well then I'm pissed.

Everybody lobbies for their business model. But which kind of business model did Adam Smith have in mind? Which kind creates value and which kind destroys it?

grandalf15• 16 years ago

Which kind creates value and which kind destroys it?

Creative bundling has always been a part of the history of innovation. What we're talking about here is the possible bundling of last mile and search.

Google thinks this is a nice bundle, as is evidenced by its fiber explorations, Topeka, etc.

There are a lot of innovative ways that bundling could make consumers better off... We don't notice most of them b/c we just take it for granted that they are sensible.

When is the last time you complained about buying a bundle of a beverage + regrigeration? Or about buying a car + tires?

Bundling works in some markets when there are economies of scale to be gained by merging two things.

Consider that comcast would have better demographic data to power its search/advertising engine, and comcast could also merge in tv habits data. As the internet and TV merge this is going to become huge.

What does it mean? Maybe that some of that ad revenue that is paying Google's shareholders could instead be used to subsidize high quality broadband for the masses while enriching Comcast's shareholders.

All in all, firms wouldn't want to do it if it wouldn't result in more profit. Unless you believe that google is a lucky accident (rather than a business that only makes money because it satisfies customers) then you shouldn't worry about net neutrality.

lmkg• 16 years ago

Let's just keep in mind, the court is not ruling against Net Neutrality itself, only that the FCC in particular does not have the authority/jurisdiction to enforce Net Neutrality. A legislative action, or possibly even an executive order, could mandate net neutrality and/or expand the FCC's powers to make that decision on its own. Time for you web startup types to call up your senator and express concern about your small business being shafted. Put it in terms they can understand: if my web traffic is a second class citizen and my page loads 0.1 second slower, I lose $X,000 a month.

grandalf15• 16 years ago

Small businesses are the ones most likely to benefit from preventing net neutrality -- via an acquisition by a content provider like Comcast or Verizon or AOL, etc.

It is the companies with > 30% market share that stand to lose, since ISPs would be able to pick winners and fragment the market further. This is why Google supports net neutrality.

apu3• 16 years ago

If I write on my blog about Comcast doing something bad, what is stopping Comcast from simply blocking all connections to my blog?

hkuo3• 16 years ago

I may not be up to speed with the whole argument, but is there a middle ground that neither party seems to want to meet at?

Net Neutrality proponents seem to want to do away with QOS entirely, but this seems to be on the grounds of ensuring the big operators don't use it for evil.

QOS can be an extremely beneficial thing. How many times has anyone been on a Skype call when the video dropped or the audio came through garbled? How many of you want to ensure that when you're playing Call of Duty that the very milisecond you hit the trigger for a headshot, your packet doesn't get dropped and you miss your target? On the flip side, how many of you don't care if an email you send gets sent that very milisecond or one or two seconds later? And who would care if a podcast you have downloading from iTunes overnight takes 15 minutes or 20 minutes?

This kind of QOS ensures that video, audio, and gameplay get priority over other forms of data that are not as time-sensitive.

Please correct me if I'm wrong, because this overall issue does seem a bit complex.

grandalf15• 16 years ago

You are right. The reason Google supports net neutrality (for example) is to prevent Comcast from making a deal with Vimeo to offer QOS on Vimeo videos, allowing them to play at noticeably higher quality.

Comcast could even make a deal with a yet unheard of startup and suddenly Google would lose lots of market share to an upstart who was willing to accept Comcast's terms.

hkuo3• 16 years ago

YouTube isn't exactly a shining example of high-quality grade video, but I totally get your point.

I'm just hoping that a tiering of QOS from a technical standpoint is not entirely ignored. Perhaps it's something already being addressed by Net Neutrality proponents.

Edit: Here's an article from a Cisco podcast that discusses this same issue I've mentioned: http://www.ciscohandsontraining.com/2009/09/need-for-qos-ver...

wmf3• 16 years ago

QoS can be used for good and some people (e.g. George Ou) have been pushing this angle, but when broadband ISPs talk about QoS (or any kind of "improvement" to their networks), it's always for evil. Many techies, seeing an environment where "innovation" is solely used for evil, are responding bluntly: if the ISPs can't use these tools responsibly, let's take them away completely.

billybob4• 16 years ago

What you're saying is totally valid, but notice this: you're talking about types of traffic, and the customer's priorities.

If customers had control over this - saying 'prioritize my traffic on port X' or something like that - it would be fine.

What net neutrality proponents fear is discrimination based on carriers' priorities and the origins of traffic.

For example, imagine that Comcast throttles Youtube because they want you to buy the cable package. They're not benefitting the customer. They're not delivering what the customer or the taxpayer paid for.

What if AT&T wouldn't connect my call to Verizon's sales department? What if my Toyota stalled out when I tried to drive to the Honda dealership?

The bottom line is that if a customer pays for access, it should be theirs to use and prioritize as they see fit.

hkuo3• 16 years ago

Actually, I had not considered this. Thanks. QOS could easily be controlled on the client side, the same way Firefox or Safari apply less memory and bandwidth to webpages in unfocused tabs, while giving the page in the current tab the most love.

blubb• 16 years ago

All I can say is that I feel sorry for you in the US. In Norway, I get 16MBit DSL at my cottage (yes, half an hours walk from the nearest dirt road). We don't even have any net neutrality laws, and there are only two nationwide DSL providers.

Estragon• 16 years ago

The general bandwidth you get is irrelevant. The central question from the perspective of net neutrality is whether there is any traffic shaping upstream of you.

Vivtek• 16 years ago

Yeah, well, I still envy him his ability not to live in town.

grellas• 16 years ago

The problem with what the FCC did here was to take upon itself the role of having a roving commission to regulate carrier activities on the internet.

By law, the FCC is an administrative agency - that is, it is charged with administering an act of Congress that gives it express authority to regulate an industry. An administrative agency can only regulate things over which it has been given such authority. In this case, the FCC did not have any express authority in any statute empowering it to impose rules of net neutrality concerning a carrier's attempt to restrict peer-to-peer usage across the carrier's network. The FCC admitted as much and argued that it had so-called "ancillary" authority to make the ruling that it did in this case. In other words, it claimed implied authority to act as it did. The court disagreed.

The Second Circuit's decision goes through a painstaking analysis of technical doctrines of administrative law relating to the FCC's attempt to justify its decision based on "ancillary" authority. The court concluded that the FCC, in failing to tie this assertion of authority to any "statutorily mandated responsibility," had overstepped its proper function. Accordingly the court struck the order down as illegal.

A reasonably informed legal discussion of the case appears here (http://www.law.com/jsp/article.jsp?id=1202447593360&Appe...). As noted in that piece, this is a "decision with far-reaching implications for the future of the Internet and the role of the Federal Communications Commission."

Whatever the merits of net neutrality, the FCC cannot disregard the rule of law. Congress can empower the FCC to regulate the net in this manner and that is where this battle should be fought.

sachinag• 16 years ago

Can I just say that having grellas active here on HN is one of the best developments of the last year for this community? Thanks, sir.

some1else2• 16 years ago

Concur!

anigbrowl• 16 years ago

It certainly appears that Congress needs to address the definition of what internet traffic actually is for regulatory purposes, if only to spare business and the public the expense of arguments over how that traffic is regulated. The FCC variously invoked its existing authority to regulate broadcast, telephony and the provision of infrastructural access to ISPs, but since none of these things are properly definitive of IP packets the existing authority isn't applicable, and so they had no right to order Comcast to submit its load-balancing methodology to the FCC for approval.

Put another way, it seems as if the FCC has the authority to regulate the creation of infrastructure but not the manner in which it is operated, and the origination and transmission of data over that infrastructure are not protected from interference by network operators. It's as if anyone is entitled to set up a railway terminal and have access to the track network, but no customers of a given terminal are entitled to any assurances about how fast their shipping containers will be delivered, if at all.

All the existing regulation seems to be built on the premise the communication takes place over a limited swathe of electromagnetic spectrum or physical wires, with fixed geographic points of signal origination or relay as a unifying characteristic. The fundamentally diffuse and ephemeral nature of data itself (which might be collated from multiple different sources over temporary ad-hoc networks that are neither physical nor persistent) isn't explicitly treated by any existing regulation that I know about. For example, if HN is run on a virtualized server spread across multiple slices running on computers in a variety of data centers, it becomes hard, or perhaps even meaningless, to talk about 'where' this discussion is taking place - it may not exist in any single physical location.

The sheer abstraction involved might be a problem for Congress (as exemplified by former Senator Ted Stevens' flailing attempts to explain the internet as a 'series of tubes'). Then again, we manage OK with a shared agreement about the contents of the US Constitution, without the necessity of running off to the National Archives every time wish to refer to it, and are able to exchange money in the economy without needing to correlate every transaction against the gold stored in fort Knox. I hope this ambiguity will be resolved by Congress rather than by being appealed up to the Supreme Court.

gojomo• 16 years ago

If you support net neutrality, but are against FCC content censorship, you should applaud this ruling. It checks the agency's ability to conjure new powers for itself. That overreach is the mechanism by which "neutrality" could be subtly redefined, over time, by the next generation of righteous busybodies.

Without strict by-the-letter-of-the-law limits, future populist regulators could easily decide that packets aren't truly "neutral" unless they advance neutrality, equality, and justice for all Americans. Packets which contain hate speech, pornography, anonymous speech, content inaccessible to the handicapped, political campaigning beyond the spending limits of the FEC, or an insufficient proportion of 'underrepresented' viewpoints all twist the net against the public interest. So why shouldn't fair-minded regulators issue extra rules to protect us? Demand more proof of compliance and 'good faith' from operators to stay in business? And once an agency is reviewing business practices for compliance with political ideals, where does it stop?

The diversity of political viewpoints available from a mass media is roughly inversely correlated with the amount of government regulation. Broadcast TV -- requiring FCC licenses for using the "public" airwaves -- has the tamest commentary. Cable TV -- federally-unregulated but locally-licensed, with a lot of operator overlap with regulated broadcasting -- is slightly more diverse. Books and periodicals -- there is no FCC of print, thankfully -- are the most diverse.

Right now the internet is most like books and periodicals. Anything that gives the FCC review power over net businesses will push it to be tamer, more like cable or broadcast. (This is even if there are no explicit content regulations; simply trying to keep the bipartisan regulators on your good side with regard to future disputes means self-censorship.)

Even if you think that's a risk worth taking for "neutrality", you ought to at least require that authority to come from explicit legislation. Get a clear definition of new rules and authorities in writing; have that definition pass Congress and constitutional review. Don't let an appointed agency of 3 Dems/2 Reps (and sometimes, 3 Reps/2 Dems) assign themselves this new authority.

allenp2• 16 years ago

This commentary is interesting (and non-alarmist): http://balkin.blogspot.com/2010/04/whats-next-for-network-ne...

US court rules against FCC on net neutrality

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