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The FCC's New Open Internet Order Faces the Realities of Implementation
Posted On June 16, 2015
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The Federal Communications Commission’s (FCC) 2010 Open Internet Order was intended to prevent broadband ISPs from blocking or interfering with traffic on the web to ensure the internet remained a level playing field for any user. In a January 2014 ruling, a U.S. appeals court said that the FCC used a questionable legal framework to craft the Open Internet Order and lacked the authority to implement and enforce its rules. The FCC went back to the drawing board and released a new version of its order in March 2015. However, the battle—both in the U.S. and abroad—is hardly yet won.

Net Neutrality: A Refresher

Net Neutrality has been the guiding principle in the development of the internet, preserving the right of all to communicate freely across the globe. This openness is also tied closely to the principle that the internet enables and protects free speech. As the FCC explains it, “An Open Internet means consumers can go where they want, when they want. This principle is often referred to as Net Neutrality. It means innovators can develop products and services without asking for permission. It means consumers will demand more and better broadband as they enjoy new lawful internet services, applications and content, and broadband providers cannot block, throttle, or create special ‘fast lanes’ for that content.” Just as your phone company shouldn’t decide whom you can call and what you say on that call, your ISP shouldn’t be involved in any way with the content you view or post online.

The internet works by having all of your communications data sent through connections established by organizations or companies—with users paying a monthly fee for the service (most often a flat fee based on service needs). While ISPs can limit your internet speeds, this is now done rarely and only to control or slow illegal downloads. ISPs would like the ability to more closely manage usage (much like cable companies do today), meaning they might block certain services or only offer baseline access to certain vendors of products such as browsers or mapping services, and then offer scaled levels of access at increasing costs in package deals.

As we know, in our post-9/11 surveillance era, technologies exist that allow telecommunications companies to examine every piece of information we send or receive. They can program routers to interfere with the data flow by slowing down or blocking traffic. Technology also provides the potential for speeding up access as well, which telecoms see as a major source of potential revenue.

“The early Internet was so accidental, it also was free and open in this sense,” Apple co-founder Steve Wozniak said in a 2010 article from The Atlantic. “The internet has become as important as anything man has ever created. But those freedoms are being chipped away. … Imagine that when we started Apple we set things up so that we could charge purchasers of our computers by the number of bits they use. The personal computer revolution would have been delayed a decade or more. If I had to pay for each bit I used on my 6502 microprocessor, I would not have been able to build my own computers anyway.”

The FCC’S Open Internet Order

When the FCC developed its 2010 Open Internet Order, it relied on two decisions made during President George W. Bush’s administration that weakened the agency’s authority over broadband internet access providers. However, in denying this approach, both the appeals court decision and an earlier Supreme Court decision indicated that reclassification would provide a more solid, legal foundation with which to move forward.

After public hearings, commission sessions, and more than 4 million comments from the public, the new FCC Open Internet rules were passed in February 2015. They are “designed to protect free expression and innovation on the Internet and promote investment in the nation’s broadband networks. The Open Internet rules are grounded in the strongest possible legal foundation by relying on multiple sources of authority, including: Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996. As part of this decision, the Commission also refrains (or ‘forbears’) from enforcing provisions of Title II that are not relevant to modern broadband service. Together Title II and Section 706 support clear rules of the road, providing the certainty needed for innovators and investors, and the competitive choices and freedom demanded by consumers.”

According to The Wall Street Journal, in the 2014 Verizon v. FCC case, the court stated that the FCC lacks authority because of “the Commission’s still-binding decision to classify broadband providers not as providers of ‘telecommunications services’ but instead as providers of ‘information services.’ …” The new 2015 open internet rules now define “broadband” clearly as a connection to the outside world that is merely faster than the phone lines we used for dial-up access, phone calls, and faxes. This gives the FCC the strongest possible foundation for future oversight to prevent/prohibit discriminatory practices.

Opponents Fear Lack of Future Industry Investment

“Net neutrality certainly was a mini-atomic bomb,” Rep. Greg Walden (R-Ore.), chair of the House Communications and Technology Subcommittee, noted recently. The Heritage Foundation’s James Gattuso believes that “broadband service was, and is, no staid utility. It is a dynamic and growing market with a thin line between a successful investment and failure. Differentiated offerings, such as discounts and priority-service plans, are common in such markets. And, the market for broadband is competitive. Despite high capital-investment costs, Internet service providers enjoy no monopoly, with two or more major players competing in almost every service area, limiting the prospect for market abuse. Moreover, even if competition fails to protect consumers, antitrust laws already on the books provide strong backstop protection against anti-competitive behavior.”

U.S. Chamber of Commerce blogger Sean Hackbarth writes, “By applying last century’s regulatory approach to 21st Century networks, net neutrality will flip the model entrepreneurs have used to transform the Internet into an integral part of our economy. Instead of being allowed to quickly take risks on new ideas and business models, Internet innovators will have to ask for the FCC’s permission.”

Consultancy A.T. Kearney conducted a study, “A Viable Future Model for the Internet,” about four of Europe’s biggest ISPs—Deutsche Telekom, France Telecom, Telecom Italia, and Telefónica—which claimed that ISPs can’t afford all the investments to maintain the internet and that it is fundamentally unfair that companies such as Netflix, Skype, and Twitter are making huge profits without paying what ISPs believe to be their fair share of the profits from the information superhighway. Sen. John Thune (R-S.D.) believes a stronger FCC role would be “creating ambiguity and uncertainty,” making it harder for “start-ups to get off the ground.”

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Nancy K. Herther is a research consultant and writer who recently retired from a 30-year career in academic libraries.

Email Nancy K. Herther

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