Court strikes down FCC’s net neutrality rules

http://gigaom.com/2014/01/14/breaking-court-strikes-down-fccs-net-neutrality-rules/

by gz5 • 13 years ago

64 77 13 years ago

gz52• 13 years ago

I am a NN proponent but think this is good because I don't believe the FCC could effectively enforce NN. At best, FCC enforcement would be a waste of money. At worst, there would be negative unintended consequences.

rayiner9• 13 years ago

I like the idea of net neutrality conceptually, but the ulterior motives of its proponents bugs me. It strikes me as just a way for the Youtubes and Netflixes of the world to get a bigger piece of the pie for themselves.

Consider the basic streaming transaction: consumer tunes in to watch an episode of their favorite show on some streaming service. Several companies are involved in the transaction: the streaming service, the broadband provider, and the content company that made the show. But the consumer doesn't really care about any of that, he's willing to pay $X for the experience of watching that episode.

How that $X is split up amongst the companies in play is the subject of a lot of legal wrangling. Each party has an incentive to try and turn the contributions of the other parties into a commodity. The streaming service and the broadband provider have an interest in weaker copyright protections, so the content company has less leverage. The streaming service and the content company have an interest in net neutrality, because that prevents broadband companies from differentiating their services from each other, and forces them to compete only as "dumb pipes."

It's not clear what the "proper" division of that $X should be. Arguably the content creation is the least fungible from the consumer's point of view. If they want to watch "House" that's what they want, not some substitute. The broadband provision is arguably the most technically complicated and the one that involves the greatest capital expenditure. Distribution is, in my opinion, relatively simple. Computing power and commercial bandwidth are commodities thanks to AWS and the like. So all that differentiates Netflix from Hulu from Youtube is the software. The software isn't easy per se, but it's easier than making a blockbuster movie or building a fiber network. That's why streaming sites are a dime a dozen but it takes the likes of Amazon or Netflix to even attempt to compete with NBC, etc, in developing AAA content.

That's almost certainly why Netflix is getting into the content business, and why Youtube has always been in the content business (through user generated content). That's what's hardest to turn into a commodity.

Goronmon• 13 years ago

I like the idea of net neutrality conceptually, but the ulterior motives of its proponents bugs me.

The ulterior motives of the opponents of net neutrality bother me much more. I can't help but imagine a world where companies like Comcast have complete control over the internet. They pick the winners, whether it's the next Google, Facebook, or Netflix. With, of course, Comcast receiving a hefty percentage for allowing said winner to succeed if they don't have complete control over the winners outright.

rayiner9• 13 years ago

Companies like Comcast are the internet. Without their massive capital investment in building networks, there is nothing but a bunch of software running on computers that can't talk to each other. Why shouldn't they get to control it however they want?

If the Googles and Facebooks of the world don't want to abide by the terms set by the Comcasts of the world, they should build their own networks. If there are regulatory barriers to doing that, those should be the target of regulatory reform.

at-fates-hands2• 13 years ago

I think the bigger issue is really increasing competition in markets where cable companies have monopolies. The only way to limit the control of the internet is make sure more companies have a chance to compete.

This should in theory, drive down prices and increase the quality of the product offered to customers.

dclowd99014• 13 years ago

You're complicating the issue:

1) I pay for the dumb pipe to give me all the internet fluid I care to pay for, regardless of its makeup.

2) I pay either one of or both of the content provider and service for the content.

All of these pieces have to work together. The internet is nothing without content, and the content is ungettable without the internet. A Mutually-assured destruction relationship between these three elements should be quite sufficient.

rayiner9• 13 years ago

I pay for the dumb pipe to give me all the internet fluid I care to pay for, regardless of its makeup.

You're assuming that broadband networks should be a dumb pipe to begin with. Why can't Verizon just decide to get out of the "dumb pipe" business, and say that they won't sell you a dumb pipe, but a pipe with whatever restrictions they want to impose?

skywhopper2• 13 years ago

Your summary of the incentives is not wrong, but I fail to see how it argues against net neutrality. The dumb pipes are basically that. If providing a commodity service, even with local monopoly power, is not sufficiently lucrative to meet the needs of the greater economy, then perhaps we should admit that broadband is, like roads, water pipes, and power lines, a common good that a free market will fail to provide and which therefore needs to either be owned by governmental entities or heavily regulated and subsidized by them.

jjoonathan2• 13 years ago

It's not clear what the "proper" division of that $X should be

Your hidden assumption that X is constant is what clouds the picture. It's easy to see that maximizing competition at every stage is in the consumer interest.

lmm• 13 years ago

Doesn't the same logic say it should be ok for a postal carrier to charge more for more valuable items, or for a water company to charge more to luxury houses, or the like? My view is that the broadband companies are natural monopolies, and thus should be required to carry all content equally; there's meaningful competition between Netflix/Hulu/Youtube because customers have a choice, but for many people there's no meaningful competition between broadband providers.

And sure, everyone has an agenda, the companies arguing for net neutrality aren't doing so out of the goodness of their hearts. That doesn't make them wrong.

websitescenes8• 13 years ago

This is horrible. Being a developer, I make money off building fast web based applications. It sucks because the fast part is now out of my control. I can write the best code ever and it will run slow unless I pay for provider preference. This will cost small companies dearly and rewards large ones unfairly. Why must our courts and political system line the pockets of the already rich? Now is the time to aid and promote innovation not stunt and slow it.

websitescenes8• 13 years ago

It's like indirectly saying the provider can charge for any content they want. You don't pay, then they won't traffic it. It's like censorship, protectionism and a bunch of other old world BS rolled into one. I'm livid.

njharman• 13 years ago

Being a developer you should really know the difference between "running speed", "network speed", and that total perceived speed has never been under your complete control. end user machines vary in power, end users have various latency and throughputs, networks get congested, etc.

But you are right, an internet without net-neutrality sucks balls.

websitescenes8• 13 years ago

I know, but now we can't even manipulate those things for better performance. You can have the best server, network and code but it won't matter if the provider doesn't give you preference. That's the issue. Takes what little control we have, as developers, away.

dclowd99014• 13 years ago

This was needlessly pedantic. We all know what's within our control, and never accounted for a greedy carrier to choke the pipes.

rayiner9• 13 years ago

You make money building web based applications that rely entirely on someone else's very expensive communications networks. Their networks have value without your applications, but your applications have no value without their networks. Why shouldn't they be able to dictate whatever terms they want? Why should the government intervene to artificially give you more leverage?

websitescenes8• 13 years ago

I already pay to use the networks. I pay monthly, and very dearly. Why should I pay again? Isn't traffic just traffic? Why must it be differentiated?

mcguire• 13 years ago

Typically because they want to avoid having legal responsibility for the traffic crossing their network. Otherwise, they would be legally complicit in all the kiddie porn in the world. Avoiding that means they have to at least pretend not to be inspecting every packet that traverses their wires.

sbov• 13 years ago

Actually, their networks have no value without access to applications.

There was a time when these online companies had to pay other companies to develop applications for their networks. Now they get them for free and want to charge the companies on top of that.

Maybe Facebook's new business model could be charging $$ for "access to their pipes" from ISPs.

tehwalrus5• 13 years ago

Surely the best thing here is for broadband providers to be reclassified as "common carriers"? That would be a fitting end to Verizon's campaign.

The FCC is free to make this choice (right?[1]), and it means they can regulate broadband companies the same way as they do phone companies now - it will have some penalty (which is why they've avoided doing it up to now), but hopefully they will have the guts to fight back.

(note, I'm in the UK, so this doesn't affect my home internet speed, although it could affect any of you 'mericans trying to read my rather obscure blog.)

[1] I don't actually know, so by all means correct me.

dclowd99014• 13 years ago

I'm not sure how you think this wouldn't affect you. If a website can't survive because the fees to "carry it" are too high, and they are frozen out of the market, we all lose. It's only one internet, after all.

tehwalrus5• 13 years ago

but you miss the point - if they don't pay, it doesn't affect my ability to visit them (unless Verizon et al are part of the backbone network on the route between their server host and my house).

I'm not saying it's a good thing - it's a very bad thing to have no NN law! - just that my browsing will be largely unaffected.

ericcumbee2• 13 years ago

I think the gist of it is that the FCC exceeded it's authority in deeming ISPs Common Carriers. Legislation from congress and signed by the executive will be needed.

tehwalrus5• 13 years ago

But the article implies that the only reason the regulations are invalid is that they didn't designate them CCs. At least, that's how I read it.

gergles• 13 years ago

No, that's wrong. They specifically did not call ISPs common carriers - they tried to give them the obligations of common carriers without reclassifying them, because they wanted to avoid a lengthy legal fight from the ISPs (who certainly do not want to be common carriers, because that eliminates their ability to charge troll tolls.)

guelo• 13 years ago

I don't think that's right. The ruling is that the FCC was regulating broadband companies as common carriers even though they're not classified as common carriers. But the FCC is the one who has the authority to classify them as common carriers. I don't really understand why the FCC didn't do that from the start.

dragonwriter7• 13 years ago

I think the gist of it is that the FCC exceeded it's authority in deeming ISPs Common Carriers.

No, the ruling specifically found that the problem is that the FCC has: 1) declared that broadband providers provide an "information service" (on which common carrier requirements can not be imposed) rather than a "telecommunication service" (on which they can be imposed), and 2) imposed the kind of regulations that are essential to treatment of common carriers.

I.e., that the FCC has both declared that ISPs are not common carriers but than regulated them (in some respects) as if they were.

There's obviously two ways to resolve this contradiction.

Torn• 13 years ago

If this crap goes through, you can bet it'll hinder net neutrality discussions in the UK

tehwalrus5• 13 years ago

NN discussion in the UK is a joke - our parliamentarians are quite happy to recommend "banning" protocols if it looks like criminals use them some of the time (notably, Dom Foster (government minister)'s position on bit torrent).

I did give a speech in opposition to it/him once[1], but unfortunately Lib Dem conferences are not the place to make a difference here (sadly).

[1] http://www.youtube.com/watch?v=n7CMSqxIw1E

adamio• 13 years ago

I can see it now "All Amazon hosted websites have been blacked out from Time Warner Cable while we enter contract negotiations. Thanks for your patience, here's a free Video on Demand for the inconvenience"

ProAm• 13 years ago

If companies like Comcast offer telephone service over their cable lines, will this not place them in the realm of being a 'common carrier'?

at-fates-hands2• 13 years ago

The problem I have with NN is the completely arbitrary way companies abide by it.

For instance Google was all about NN when they were sued by AT&T after they set up Google Voice. Then, when they got into the broadband game, all the things they were for with NN, instantly went out the window.

It appears companies are usually for something until they're against it. The FCC isn't much help either, since they really don't have any muscle to enforce the NN existing rules anyways.

RyanMcGreal• 13 years ago

That fickle corporate stance on NN is exactly why we should support it at the policy level so everyone has to follow fair, consistent rules that maintain the integrity of the internet.

shenoybr• 13 years ago

What just happened? Common sense probably got stuck in the slow lane.

declan2• 13 years ago

Folks, today's ruling should come as no surprise. Congress never gave the FCC the authority to impose Net neutrality regulations on the Internet. That means the FCC's regulations were illegal. The same court already slapped down the FCC once, in 2010, remember: http://news.cnet.com/8301-13578_3-20001825-38.html

Legislation granting regulatory authority to the FCC came up for a vote in Congress, and it came close to passage: it was reported favorably out of a Senate committee but was defeated in a House floor vote in 2006: http://news.cnet.com/2100-1028_3-6081882.html

Even if you adore the principle of Net neutrality, it's reasonable to demand that federal regulatory agencies stick to what Congress authorized them to do. Otherwise you have illegal regulations and bureaucratic turf-grabbing that will not treat the Internet well. Remember Hollywood's successful efforts to lobby the FCC to impose "broadcast flags" on computers by bureaucratic fiat? A federal appeals court correctly struck it down as exceeding the agency's legal authority, as I wrote here in 2005: http://news.cnet.com/2100-1030_3-5697719.html

If Net neutrality violations become an actual problem, there's no shortage of publicity-hungry politicians in Congress (hi, Ed Markey!) who will hold hearings and push legislation forward. Obama will happily sign it. Until then, other government debacles including NSA domestic surveillance and Obamacare should make us wary of federal agencies exceeding their legal authority -- especially after Congress considered and rejected a law that would have given it to them in the first place.

lifeisstillgood• 13 years ago

I saw New Shiny Thing and wanted to play.

Thank you for reminding me to "Stay on Target"

eli2• 13 years ago

Wouldn't the FCC clearly have this authority if they simply choose to reclassify the internet as a telecommunications service subject to common carrier rules instead of an information service? (A decision that they can apparently make unilaterally.)

dragonwriter7• 13 years ago

Wouldn't the FCC clearly have this authority if they simply choose to reclassify the internet as a common carrier service instead of an information service?

They'd have to reclassify broadband as a telecommunication service instead of an information service to regulate broadband providers as common carriers.

This would be reviewable by the courts under the definitions of those terms in the Telecommunications Act, but looking at the definitions, it seems that this would likely be reasonable. (Most ISP provide some components of service that are clearly more like an "information service" than a "telecommunication service", but the basic of internet access seem to be more like a "telecommunication service", and regulating different components of packaged services differently is something that the FCC has done other places before.)

dragonwriter7• 13 years ago

If Net neutrality violations become an actual problem,

Net neutrality violations had become an actual problem (and source of case-by-case FCC issues) before the FCC set out its open internet principles, much less issued the Open Internet Order.

there's no shortage of publicity-hungry politicians in Congress (hi, Ed Markey!) who will hold hearings and push legislation forward.

There's more money-hungry politicians that are in bed with the entrenched interests that oppose neutrality that will act to prevent any net neutrality action.

Obama will happily sign it.

Which would be significant, if it would ever get through Congress. Which it won't, particularly the House.

declan2• 13 years ago

There were some scattered and quickly resolved problems, and Comcast certainly acted foolishly (and arguably dishonestly) in the case of BitTorrent throttling. But there was no evidence of widespread problems, and the Comcast-BitTorrent issue was resolved six years ago without the FCC playing referee: http://news.cnet.com/8301-10784_3-9904689-7.html

The reality is that Net neutrality became politicized long ago. It was embraced by pro-regulation left-leaning groups, who were in part funded by Silicon Valley companies who seeking a competitive advantage through the political process. And yes, AT&T and Comcast and other providers played defense by funding advocacy groups on the other side. You may remember that I was the first to disclose some of this dodgy stuff, back in 2008: http://news.cnet.com/8301-13578_3-10016960-38.html

Once that politicization happened, rational thought in DC ended and it became something that a certain subset of politicians said "WE MUST HAVE," no matter what the law actually allows, which is a dangerous precedent. So welcome to today's state of affairs. On HN, however, I'd hope that we can be a bit more rational about this.

PS: If you think that a bunch of Tea Party conservatives in the House are going to defend AT&T, Comcast, VZ, etc. if they start blocking web sites, etc., you're badly mistaken. Also remember antitrust laws still apply even if the FCC vanishes tomorrow.

gz52• 13 years ago

Limited scope as well - believe mobile is completely separate (?) - and imo mobile is the more interesting and important domain for NN.

Court strikes down FCC’s net neutrality rules

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