Orbital Matters

Saturn Smith
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APRIL 6, 2010 1:35PM

No More Net Neutrality? New Ruling Eliminates FCC Authority

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The U.S. Court of Appeals for the District of Columbia ruled today [PDF] that the Federal Communications Commission doesn't have the authority to enforce "net neutrality," which requires companies to treat all traffic over their networks equally.

The case was brought by Comcast. A little history: the initial case started in 2007, when Comcast customers noticed the company was "throttling," or slowing/stopping, peer-to-peer network sharing. (Peer-to-peer network sharing has many legitimate uses, but it is most known, of late, for being the way that BitTorrent and other media downloading apparatuses make illegal sharing of copyrighted materials possible).

Why would Comcast care if people were sharing files? For a couple of reasons. Shared media files are often large (think: movie downloads) and take up a lot of bandwidth. Also, Comcast, being a cable company, is in the business of charging people to watch movies and television shows; if people are able to access those programs for free, it loses money. Beyond all of that, Comcast could afford to make P2P sharers angry -- in many places, your choice for fast Internet service is Comcast or no one. The fact that Comcast could do this under a thin veil of claiming to be stopping media piracy was just the icing on the cake. The choice to throttle made all kinds of business sense.

Customers, however, were not happy, and two groups filed complaints with the FCC. The FCC told Comcast, "Hey, not cool," saying the throttling violated the FCC's "Internet Policy Statement," which holds that "consumers are entitled to access the lawful Internet content of their choice." Because that rule already existed, the FCC said it didn't even need to issue new rules to handle this problem and could, instead, just tell Comcast to knock it off. Comcast agreed. They'd already changed the way they were doing things, so the FCC just made them publish those changes for customers, and said, essentially, if you do this again, we're gonna make a rule.

Is everyone happy? No. Enter the court challenge. Comcast played along, but it also saw an opening to challenge this FCC ruling. It did so on three points: that the FCC doesn't have the authority to intervene in how Comcast (and other companies) manage their networks; that the FCC has no real power to adjudicate disputes (that it can only solve problems by issuing rules, not by choosing sides); and that the initial order was "so poorly reasoned as to be arbitrary and capricious."

It's the first part that the Court based its decision on. Basically, it found that the FCC does not have the authority to tell Comcast, or any other network provider, how to manage network traffic. Maybe that sounds self-evident, but think for a moment about the consequences. A company is now allowed to sell you Internet service and not tell you that your Internet will be limited to what they'd like you to see, hear, and use on the Internet.

Comcast, which is, incidentally, my Internet Service Provider, is currently trying to acquire NBC Universal. If it does, it will own not only the means of distributing that content but also the means of creating it. It will have twice the incentive to begin throttling bandwidth for those who want to share videos over the Web -- and not just using torrents. This ruling opens the door for companies to be able to slow or even block traffic to competing sites.

For instance, Comcast currently runs a site called Fancast. Fancast is like Hulu, only, well, less awesome. It offers TV episodes and movies, some news and entertainment stuff, and a lot of advertising for Comcast. Who's to say now that Comcast wouldn't make sure that anyone trying to access Hulu found it very, very slow going? After this ruling, not the FCC.

Net Neutrality, which has been cheered for by groups from Google to the ACLU, has seemed a little closer of late. The FCC proposed new rules last fall that have been up for comment since September. The idea was that they'd make all carriers neutral carriers under new rules. The Court of Appeals ruling, today, says that the FCC doesn't have the authority to make rules like that.

I assume the FCC will appeal, but -- with the Courts being how they are -- I don't know that I expect there's going to be success. Which means only one body does: Congress. And good luck with that.

This is going to end up being a very important fight. It's not really the ability to watch "Castle" at high speed that we're talking about (though that is very important to me), it's the ability to be assured that companies don't censor information based on their own corporate interests. I don't want Comcast stepping in to make Candidate X's Web site run more slowly because Candidate X opposes Net Neutrality; I don't want AT&T to decide that I can only use Yahoo!, not Google, on my iPhone because they have corporate ties.

It's one of those "Call your congressman" moments. Representative Markey introduced the Internet Freedom Preservation Act of 2009 last year, and had 21 co-sponsors. It would make it illegal for companies to discriminate against users and types of content. The bill hasn't made it out of the House Committee on Energy and Commerce. It might be nice if it did.

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Saturn, another good & important analysis.

Additional questions: What's the status of public broadband efforts?

Also, I wonder what the impact of this decision will be on approval of the Comcast/NBC deal. Who has the power to regulate that? Those may be the folks to whom we should direct our collective dismay.

Incidentally, we (my husband, anyway) just dropped Comcast for Verizon FIOS as of yesterday, not that that will make any difference.
I wonder how much Comcast paid them!
I'm behind on the public broadband thing, but I know there's been significant backlash since the FCC issued its report, because apparently the money spent to do the studies didn't cover any kind of significant effort at explaining exactly how service could be extended nationwide. Right now, the goal is nationwide coverage by 2020, I think, at a speed that's pretty low (4 Mbps).

The Comcast/NBC merger doesn't fall under antitrust regulations because it's not reducing competition -- it's consolidation, but of companies in different fields, so it will likely get to go forward without anyone really stepping in (think: Time-Warner-AOL).

I have a hate-hate relationship with Comcast, though we've gotten along a lot better since I dropped my cable plan.
I wonder if local municipalities would have the authority to demand net neutrality in their franchise agreements with the cable companies.
Really interesting question, pwakeman. I have no idea.
Well, I'm sure we knew this was coming.

You wrote in a comment, "The Comcast/NBC merger doesn't fall under antitrust regulations because it's not reducing competition -- it's consolidation, but of companies in different fields ...”

You're clearly right about that, I think, but it strikes me as a bit counterintuitive to consider them as being in different fields at this juncture, since both are clearly entertainment delivery systems, merely operating on different levels. And it seems to me also that "consolidation" SHOULD be considered an aspect of anti-trust regs.

It doesn't seem particularly different from a logging company owning a railroad (or vice-versa), which would clearly be consolidation, yet would also threaten competition.

Welcome to the United Corporations of America, eh?
Thank you so much. I also have Comcast. Every time I hear a story like this, I am reminded about how years ago when movie studios owned movie theaters, they were told it was a monopoly and made illegal. Now the only thing available to watch at the big movie houses are movies are the ones made for 14-year-old boys. So where are these monopoly watchdogs now, I wonder. I didn't call my congressmen then, but I will now. Well done.
During the Constitutional Convention James Madison wrote extensively about watching Castle at high speed. He was far ahead of his time and absolutely correct, as are you. Off to drop Rep. Jan S. a note.

Thank you for sharing.

good to know, that's a little upsetting
Stim, yes, that's my favorite part of the never-released minutes.
Excellent, Saturn, as always.
Just a thought, here. Ever since the homogenization of American radio (popular/rock, etc.), I've had a thought it was time for Americans to take back the airwaves. (Not via online method or cable) (Bear with me here)
Maybe this already happened--I won't have heard of it before-- but an idea stuck with me about Public Radio in the rock genre, not only jazz/classical, our only offerings so far in my part of the world.

What I'm getting at is this: We are complaining about behaviors that were predictable. This is a corporate country, with interests in other parts of the globe. WHAT IF we, the people took our broadband business into a broader scope, such as public television has succeeded in doing? --I'm talking, not following in every footstep there, leaving corporate interests in the dust.
I'd pay a bit more to know I had all my freedoms preserved via internet service. Frankly, I found Comcast's practices less than faithful, certainly unsavory. One of their reps lied to me outright--twice. They are no good, just as all monopolistic-minded business practices are simply that: no good. 'Nuff said.
What was more disturbing was that Comcast was also caught throttling political email blasts about issues that didn't lean the way they do. The company's execs give a good deal of money to conservative pols.
The FCC was rendered toothless by Bush and Co. We all bear the brunt of that reality!
But show a boob and the FCC will go ballistic.
This matter is about free speech. The Federal Government, the Courts, and the Constitution all have an interest in this.

This matter is about trade done by megacorporations that extend across state and even country borders. The Federal Government, the Courts, and the Constitution? Relevant again.

And this matter is about corporatism and civil rights. The courts must take a strong stand or soon people will have no rights at all. This is very, very bad and brings into sharp focus the importance of replacing Stevens properly when he steps down.
Wow, if making such rules is NOT the FCC's job, what is?
Geez, this is an issue I hadn't paid as much attention to as I should. Thanks for airing it. The free speech implications are obvious; that alone should impel the politicos to legislate net neutrality. Plus, I don't like the idea of some corporation keeping tabs on who is checking out what website or downloading what content.

Does this analogy work? Let's say in big parts of the country you could only get Sony TVs. And Sony could control the reception you got, say, to fuzzy up programs that carried Toshiba adverts. Or do the same with political ads from groups or candidates they didn't like. Would that be legal or even tolerated? Doubtful.
"But show a boob and the FCC will go ballistic.

If that is so, why did they allow so many pictures of the real boob, g. w. bushpunk?
:( Honestly, don't the corporations have ENOUGH power and the people TOO LITTLE already? It just keeps getting worse and worse.
I guess the right-wing response is that since the founding fathers didn't mention net neutrality in the Constitution, they clearly intended for our surfing habits to be controlled by mega media corporations.
This is to me the single most important issue of our time. If they take away the internet, well then what.....?
FCC net neutraltiy smackdown is a huge win for the free market and limited government. Good news for Internet users. Good news for America!
This may seem like a free speach issue, but I don't think so. It's more of a Monopoly issue. If you only have comcast, they have a monopoly. But could another company come in and turn a profit quick enough to make it worth their time.

Try to keep in mind that the cable you use was put there by comcast. If you only have comcast, other companies may not even be there, or if they were, you may not have high speed.

In the end I would rather leave it in the hands of a private company b/c if the service sucks competition will come in and replace them. If the government sticks it's nose in. Well that's it, there's no competition.
Welcome to the brave new world of corporate rule. If its good for Comcast, Time Warner, the healthcare industry and Wall Street, it had better me good enough for you.
This is a good ruling. The one thing that can screw up the Internet worse than Comcast is the Federal Government.

Originally the FCC was designed to allocate frequencies to Radio stations, then they started issuing rules forcing "community service", becoming the Nations Prig. This court ruling stopped another power grab by the agency. That's a good thing.

If the fears that brought about this ruling do appear, then Congress, not Bureaucrats, can devise laws to put an end to them.
The internet is what it is because of Net Neutrality, and it is a gigantic success.

Whereas running things by the profit motive DESTROYS quality.
Isn't Congress built by our bureaucracy? It's all bureaucratic bull#%*$, full of sound and fury and signifying nothing.......Sorry. A spontaneous explosion. It's just that nobody here really knows all that the Feds do. Who really OWNS Comcast and all of its affiliates? A racketeeering boss would know.
As everything's a racket in this land of ours nowadays, it pays never to get stuck for something to do that would include our money being invested in companies with overly vested interests. In a public setting, the people are more present in the minds of the ones running the show. That's because we are more visible, and can reach into the wallets they carry. Just a thought. Thanks again, Saturn. I'm spreading the word outside OS on this issue.
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I suggest you read the text of the Communications Act of 1934 as modified to date. 47 §151 REQUIRES the FCC to regulate interstate and world-wide wire communications.

The general definition of wire communications in 47 §153 ¶59 covers any method for accessing [sic] the "[i]nternet". This was written long before Gore "invented" the [sic] "[i]nternet" and long before a 77 y/o judge called a new method for using wire communications a wholly new medium, as is idiotic.

Have you examined the history of wire communications?
Neeley Jr v FCC, et al, (5:12-cv-5208) will result in the end of [sic] "open [i]nternet" but must precede wire communications being made publicly available EVERYWHERE.