The FCC’s net neutrality rules: More neutral than necessary? [Updated]

Tweet

Updated January 14, 2014: Today the U.S. Court of Appeals for the D.C. Circuit issued its opinion (pdf), striking down key portions of the FCC’s Open Internet rules discussed below.  FCC Chairman Thomas Wheeler issued a statement, forecasting that the FCC would consider “all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

The internet is more than simply a series of tubes traversing the globe, carrying little packets of information seemingly everywhere.  Society has become always-connected, always “on.”  Because of the many ways in which a consumer can access the internet, this ease of access can easily be taken for granted in the United States.  Americans often complain about much they cannot stand their internet service provider (ISP), but an American would be hard pressed to complain that he or she is located in an area with no internet access.

Americans also generally do not need to fear that the government will cut off access to the internet at the first sign of trouble.  Nor do Americans typically worry that our country lives in a closed garden, where the government restricts who can access the internet and what can be done on the internet.  Of course, the cynic may say it appears as of late that it is in the government’s, or at least the NSA’s, best interests to encourage as much internet usage as possible.

“It is the basis of democracy, by which a community should decide what to do. It is the basis of science, by which humankind should decide what is true.”

The internet is undeniably the driving force behind the current Information Age, and for good reason.  Tim Berners-Lee, the founder of the World Wide Web, best described the internet as “increasingly becoming the dominant medium binding us.  The neutral communications medium is essential to our society.  It is the basis of a fair competitive market economy.  It is the basis of democracy, by which a community should decide what to do. It is the basis of science, by which humankind should decide what is true.”

So how did Mr. Berners-Lee propose to protect what has increasingly become perhaps the most vital resource in the world?  By protecting “the neutrality of the net.”

Net neutrality is simply the concept that anyone can connect to the internet and run any internet application the user wants, without discrimination as to who that user is or what that user is doing.

Net neutrality is not a new concept, but it is commonly misunderstood.  Rather than focusing on the restriction of the content of the internet, net neutrality is actually a concept focused on the restriction of access to the internet.  Plainly put, net neutrality is simply the concept that anyone can connect to the internet and run any internet application the user wants, without discrimination as to who that user is or what that user is doing.

The concept was given its catchphrase by Columbia Law School professor Tim Wu in 2003.  But even the father of the internet – the one who helped to create the actual series of tubes – believed in the neutrality of the net well before Mr. Wu coined the phrase “net neutrality.”  Despite what may be commonly joked about, that gentleman was not Al Gore, but Vint Cerf, who has since received a Presidential Medal of Freedom and been inducted into the Internet Hall of Fame for his work.  Mr. Cerf believed in universal access from the launch of the internet in 1983, and rather than develop a closed system designed to make a profit, he decided that “we’re not going to patent it, we’re not going to control it.  We’re going to release it to the world as soon as it’s available.”  Mr. Cerf did just that, and the internet grew from a military-funded project to the global network the world relies upon today.

The Open Internet rules became effective November 20, 2011, and are directed towards broadband ISPs—including wireline, fixed wireless, and mobile broadband internet providers.

The Federal Communications Commission regulates industries including radio television, cable, satellite, and most importantly in today’s world, the internet.  In December of 2010, the Commission proposed a set of Open Internet rules (pdf), seeking to establish “rules of the road” to guide broadband ISPs and establish the Commission’s duties and obligations in enforcing net neutrality.  The Commission proposed the rules under then-Chairman Julius Genachowski, who saw the Commission’s primary duty as one of “a cop on the beat to protect broadband consumers and foster innovation, investment, and competition.”

The rules became effective November 20, 2011 as Part 8 of the Commission’s Rules, and are directed towards broadband ISPs, including wireline, fixed wireless, and mobile broadband internet providers.  Wireline providers are generally associated with residential and commercial broadband providers, such as Time Warner Cable or Comcast, and can include fixed wireless broadband providers as well.  Mobile broadband providers are generally associated with cellular phone carriers, such as Verizon Wireless or Sprint Nextel.  Ultimately, the rules cover three primary areas: ISP transparency regarding network management practices, performance, and commercial terms; the blocking of lawful content by ISPs; and, the unreasonable disparate treatment of network traffic by ISPs.

The application of the Rules to cellular telecom carriers – specifically, the prohibition of mobile broadband ISPs from blocking access to lawful websites and from blocking applications that compete with the ISPs own offerings – has proved to poke the bear.

Verizon and MetroPCS challenged the rules in court, questioning whether the Commission had the statutory authority to regulate broadband internet, and whether that regulation constitutes “prohibited common-carrier regulation.”

While relying on lobbyists and political pressure has been standard practice for the industry, cellular carriers quickly turned to the federal court system and filed a lawsuit with the intention of dismantling the rules.  Led by Verizon Communications and MetroPCS, the lawsuit was initially filed in January of 2011 – almost an entire year before the rules were to go into effect.  However, the U.S. Court of Appeals for the D.C. Circuit quickly dismissed the case as premature.

Verizon and MetroPCS re-filed after the rules were enacted, questioning whether the Commission had the statutory authority to regulate broadband internet, and whether that regulation constitutes “prohibited common-carrier regulation” established by a prior case.  Verizon briefed their case (pdf) in July of 2012, contending that the FCC has no lawful power to regulate the internet, that the Open Internet rules violate its First and Fifth Amendment rights, and that the rules are arbitrary and capricious.  MetroPCS, in contrast, did not join in the common-carrier and Constitutional claims, possibly foreshadowing its eventual withdrawal from the legal challenge after being taken over by T-Mobile.

The Commission responded to Verizon’s brief in its own brief (pdf) filed in January of 2013, asserting that it did in fact have the proper statutory authority to promulgate the Open Internet rules.  The Commission stated that it read its enabling statute to grant direct authority to regulate the internet, that the Open Internet rules reasonably carried out its mandate, and that this interpretation should be accorded deference by the Court.  The Commission also denied Verizon’s remaining claims.  In support of the Commission’s rules, Tim Wu – the well-known law professor mentioned above who has written extensively on the internet – filed an amicus brief (pdf) encouraging the Court to reject Verizon’s Constitutional argument, as finding the rules to be unconstitutional “would be at odds with centuries of traditional oversight of both transportation and communications companies.”

Justice Scalia noted that the Supreme Court has “consistently afforded Chevron deference to agencies’ constructions of the scope of their own jurisdiction.”

Verizon’s lawsuit is likely to decide the fate of the Commission’s rules as they apply to wireless broadband ISPs – and possibly the Commission’s regulation of the internet entirely.  Because of the far-reaching implications of the Court’s impending decision, the Commission has contended a recent Supreme Court decision supports its call for deference by the Court, while Verizon has argued the recent decision does not apply.

The Supreme Court of the United States handed down an opinion (pdf) in May of 2013, addressing the level of deference given to a federal agency’s interpretation of the scope of its jurisdiction.  Justice Scalia’s majority opinion held that such an interpretation is afforded Chevron deference.  Under the Chevron framework, the reviewing court “must first ask whether Congress has directly spoken to the precise question at issue; if so, the court must give effect to Congress’ unambiguously expressed intent.  However, if ‘the statute is silent or ambiguous,’ the court must defer to the administering agency’s construction of the statute so long as it is permissible.”

Justice Scalia noted that the Supreme Court has “consistently afforded Chevron deference to agencies’ constructions of the scope of their own jurisdiction.”  He further held that the Commission was unambiguously vested with authority to administer its enabling statute, the Communications Act, through rulemaking and adjudication, thereby making Chevron deference the appropriate standard.

Understandably, the Commission quickly asked the U.S. Court of Appeals for the D.C. Circuit to follow the deference standard established by the Supreme Court decision and dismiss the case.  Even more understandably, Verizon disagreed that the Open Internet rules should be given any deference whatsoever.

The net neutrality debate is merely a microcosm of the ongoing debate over the size of the federal government.

The recently named three-judge panel in the D.C. Circuit will hear oral argument in the case in September of 2013.  Attempting to read the tea leaves prior to oral argument, or even again following each side’s presentation to the Court, can often prove foolhardy.  But if the recent precedent established by the Supreme Court is deemed to apply and is followed by the “mini Supreme Court,” the Commission should prevail.

Nevertheless, even if the Open Internet rules are struck down, the Commission has other—perhaps more controversial—paths it may take to enforce net neutrality.  Ajit Pai, a current FCC Commissioner, forecasted at the 2012 Annual U.S. Telecoms Symposium in December of 2012 that a defeat of the rules would not be the end of the debate over net neutrality.  Instead, he predicted that it would result in the Commission either choosing to continue to attempt regulation along the same path or by sidestepping the Court ruling through a reclassification of broadband internet.

The net neutrality debate is merely a microcosm of the ongoing debate over the size of the federal government, and public opinion regarding the Commission’s Open Internet rules has been far from neutral.  Democrats generally view (pdf) the Rules as a way to protect consumer interests, foster investment, innovation, creativity, consumer choice, and free speech.  On the other side of the political debate, Republicans generally view (pdf) the rules as government overreaching and an unnecessary regulation of the private market that hurts consumers.

These positions are unlikely to change and the ongoing debate over the regulation of the internet will continue.  Verizon’s challenge to the Open Internet rules is likely just another bend in the series of tubes known as the internet, but it is assuredly not the last word on net neutrality no matter the Court’s disposition this fall.