January 14, 2014

"A federal appeals court today nullified key provisions of the FCC’s net neutrality rules..."

"... opening the door to a curated approach to internet delivery that allows broadband providers to block content or applications as they see fit."
The 3-0 decision by the U.S. Court of Appeals for the District of Columbia Circuit guts much of a 2010 Federal Communications Commission order, in a challenge brought by Verizon. The nation’s number one mobile provider successfully argued that the regulatory agency overstepped its authority because it issued the rules in 2010 without classifying broadband providers as common carriers, like rank-and-file telcos.

47 comments:

FullMoon said...

What are the implications Should we stock up on pornography, like light bulbs?

AustinRoth said...

While I support net neutrality, the Appeals Court seems (to me) to be on pretty firm legal grounding with this ruling.

PB Reader said...

Given the near monopoly (duopoly) status of ISPs, I think net neutrality is an important concept, as the amount customers pay to an ISP not only pays for the ISP infrastructure, but it also pays for the high-bandwidth connection to the internet backbone providers. I pay for access to the Internet, not the Internet my ISP chooses to allow me. The big internet websites also pay for their connection to the Internet, so everything is funded. The ability for large ISPs to tax large websites for the traffic the ISPs customers request is an abuse that in a freely operating market would be eliminated by competition. Since free competition is limited, or at least the barriers to entry are great, the ISPs should come up with their own content and charge for that or they should fuck off.

PB Reader said...

I have an agreement for a certain bandwidth and my ISP is free to place total data caps if they want and charge me for more data per month, but I expect whatever service level I've purchased to be maintained and for them to properly engineer their network to meet their agreement with me.

etbass said...

We have not had "net neutrality" since the inception of the internet and I have seen none of the abuses that the proponents of the regulation say it cures. I think it is another layer of regulation for problems as yet unseen and which the market is better able to handle.

The government keeps wanting to control everything.

PB Reader said...

Likely, even if my ISP (At&T) sought to charge large web sites to carry their traffic (video being the main culprit - Netflix), this will lead to an explosion of VPNs and proxies that expand the use of torrent technology for transmission of almost everything. The ISP would no longer see that large website delivering high traffic but see the same traffic split out via millions of smaller sources before it hits your ISP's internal infrastructure.

khesanh0802 said...

Seems to me that net neutrality is/was another form of rent seeking by high volume users. Why shouldn't they pay for higher volume use? The internet has become a commodity like gasoline; if you use more you pay more.

damikesc said...

Seems to me that net neutrality is/was another form of rent seeking by high volume users. Why shouldn't they pay for higher volume use? The internet has become a commodity like gasoline; if you use more you pay more.

That's like saying a gallon of unleaded should be based on how many miles you drive a year and not on the market value of the commodity.

Larry J said...

Perhaps a better analogy would be that heavy commercial trucks pay higher fuel taxes than cars due to the damage they do to the roads.

furious_a said...

Does this mean that Facebook, Twitter and other "free" sites are going to have to charge subscription fees?

SteveR said...

While I'm no fan of the ISPs, I'm even less of a fan of the government getting involved. To start with "net neutrality" is a term that sets off alarms.

madAsHell said...

Opening the door to another disruptive technology.

David said...

The left likes powerful administrative agencies because the agencies can try to enact policies that would never pass a vote in Congress. Between the agencies and the public prosecutors, nobody is safe.

Unless of course you work for the IRS and Holder is AG. Then it's a lot safer.

tim maguire said...
This comment has been removed by the author.
tim maguire said...

I'm not familiar enough with the details of net neutrality to have a strong opinion, and the state of the law probably goes against it, but the argument for it sounds pretty strong from a practical perspective.

ISPs currently charge bandwidth users (you and me) and deliver content at the rate we pay for. Opponents of net neutrality argue that service providers should also be able to charge web hosts to stream their content at different speeds.

That is, they want to be paid a second time for a service they're already being paid for. I suppose this could work in our favor if our own rates went down, but I'm not holding my breath.

Larry J said...

furious_a said...

Does this mean that Facebook, Twitter and other "free" sites are going to have to charge subscription fees?


Only if their profits from selling your personal information drop.

When the service is "free", you are the product.

Revenant said...

etbass hit the nail on the head, in my opinion. The last thing the Internet needs is more government meddling.

Sigivald said...

What etbass said.

As a "movement", net neutrality has long looked like a moral panic cooked up by Google et al. to try and get regulations it prefers in place.

It's not really about "neutrality" in any practical sense, at the high level.

(The people sucked into the moral panic, of course, were honestly pushing for "neutrality".

It just wasn't actually ever in danger.

Nobody was ever going to charge you, the end user, "more to use Netflix or Facebook", as I was warned I needed to support "Net Neutrality" to prevent.)

Sigivald said...

tim maquire said: Opponents of net neutrality argue that service providers should also be able to charge web hosts to stream their content at different speeds.

You seem to think that they don't already do that.

(Or that doing so is bad for consumers.)

(See Bennett etc. as vs. Lessig etc.

Especially pages 28+.

"Network Neutrality" was originally and primarily about "make the bad actors we assert might exist treat every packet identically".

The problem is that makes the internet suck for streaming video or audio (such as VoIP communication).

It's a bad solution to a non-problem.)

Cliff said...

The FCC better come up with a good solution. As it stands, if comcast don't like Althouse there will be no more Althouse. I wonder if comcast likes Althouse.

garage mahal said...

Huge win for telecoms and cable companies, bad deal for internet users. Of course.

Bob Ellison said...

I could choose not to buy Internet bandwidth. Why is my vendor forced to sell it to me like a government service?

jimbino said...

Does this mean that we can expect a second Internet, one for adults, so we can dedicate the old one for children and religious folks?

KLDAVIS said...

Ah, yes. The way to keep the net "neutral" is to subject it to the whims of the FCC.

This is about government wanting a say in how ISPs run their business. If there is a demand for un-managed bandwidth, in the long run someone will supply it. But, in the short term, we don't need a Federal agency dictating how best ISPs should innovate.

Bob Ellison said...

What's that old expression? "Follow the money"?

Bob Ellison said...

Let us be clear: "net neutrality" is crony capitalism posing as classic liberalism.

Kev said...

(the other kev)

No tears for commissars.

Revenant said...

Huge win for telecoms and cable companies, bad deal for internet users. Of course.

Correction: big win for telecoms and cable companies, big loss for Google and content providers.

For internet users? No change.

The reason why I should give a shit what percentage of internet profits goes to ISPs and what percentage goes to Google and Microsoft? Unclear as always.

Left Bank of the Charles said...

Not having Flash on my iPad creates a hole in the internet. If I notice the hole, and really want to watch the content, I can go to my desktop machine. Mostly I don't.

So without net neutrality, there may in a similar way be things that I can't see on my desktop tethered to Comcast Xfinity, but that I can see on my iPad's Verizon LTE. And there may also be things I can see on neither.

Comcast was up 1.25% today, and Verizon was up .11%. That does not seem like much of a monopoly premium.

Google was up 2.35% and Facebook was up 3.27%, which is not what you would expect for content providers. NetFlix, which would seem to have the most to lose from getting crowded out by the broadband providers discriminating in favor of their own on demand video distribution systems, was up 1.15%.

We'll see what happens tomorrow, but the market seems to be running against the claims for net neutrality.

Mike said...

Garage has it exactly backwards as usual. Enforcing this bogus "neutrality" would have enabled Google and Facebook to ensure that their favored content got through the pipes as they wish. The only "net" they care about is net income. Once they had bought off the FCC they could exert their will on Congress as well. Keep the gov't out of our internet.

Despite Al Gore's bragging, the gov't didn't BUILD IT. They don't MAINTAIN it. And they don't CONTROL it. This makes gov't panic, because Leviathan likes control!

Paco Wové said...

"net neutrality" is crony capitalism posing as classic liberalism.

In other words, modern liberalism.

Andy Freeman said...

> Why shouldn't they pay for higher volume use? The internet has become a commodity like gasoline; if you use more you pay more.

What makes you think that higher volume users don't pay more today?

ISPS charge more for high-bandwidth connections. They also charge based on the amount of data transferred.

"Net neutrality" is not about paying for what you use. It's whether Comcast can tell you (or Netflix), "give us more money or your streaming video won't work" after you've both paid for links with sufficient capacity.

Of course, Netflix and Comcast will agree that netflix is okay but any upstart won't be able to service its customers.

themightypuck said...

The difference is that bandwidth is a known quantity and a natural monopoly. The existence of the current cable box and the interface thereon should tell you all you need to know about how much these monopolies like to innovate. Compare that to Netflix and Google and ask yourself what you want. If I had seen any innovation on the part of the cable companies over the past billion years I would support this, but they have no credibility and I can predict where this will end.

Cliff said...

My reading of this tells me something different than most commenters. I am not a communication law expert but it seems to me that this ruling leaves the internet providers free to direct or not direct traffic how they wish - meaning that if comcast disagrees with Althouse's politics (or anything else about Althouse) it is legal for them to restrict or even block traffic completely to her website. If that is correct, that is a chilling result opening the door to total control over information that internet users can access.

khesanh0802 said...

@damikesc and Andy Freeman

The whole point of net neutrality - if I understand it - was for high volume users to be able to dictate to the comm companies what would be paid for their "pipes". If I drive 1000 miles I expect to have to buy and pay for more gas than if I drive 100. So too the high volume users.

Andy, Do you really think that a commercial enterprise like Comcast (who everyone seems to think is the villain here) is offered additional revenues from a viable start-up that they are going to turn it down? Also if Comcast feels that the value of their service to Netflix is worth more than they are being paid they have every right to raise the price. Netflix can refuse and deal with the consequences, or they can pay and figure out how to price the increase into their service.

Why should the government be making these decisions anyway?

As far as blocking the Althouse blog is concerned it seems to me that right away we are talking about first amendment issues.

JackOfVA said...

It's been some years since I stopped practicing communications law, but it seems to me the DC Circuit got this one exactly right.

I'll paint with a broad brush below, but perhaps it will be sufficient.

In the last 25 or 30 years, the FCC has done its best to limit common carrier status to a relatively small class, and even with those entities qualifying as common carriers, much of the traditional trapping of common carrier regulation have been dispensed with.

Hell, at one point in the 1970's one of my jobs as an entry level lawyer was to revise and file tariffs and help clients develop cost studies to support tariff changes. And these were for paging companies that, in some cases had only a few hundred customers in a couple of counties. And where there may have been four or five competing paging service providers. That degree of regulation made no sense to anyone but it had been historically the practice for a couple decades and because that's how the Communications Act read at the time.

The FCC's approach shifted such that only true monopolies are treated as common carriers, and other entities where the possibility of competitive services exist will be left to the market place, through a combination of changes in the law and regulatory forbearance.

In the case of ISPs, it's a rare location that does not have several providers offering service. The local telephone company through some version of DSL and the cable company, plus satellite service and increasingly in recent years wireless access. That's sufficient competition to provide the consumer protection that common carrier regulation did, but in a much more economically efficient fashion.

Yes, it's possible that Comcast could decide not to allow its customers to access the Althouse blog. Wouldn't be a good business decision, but bad business decisions are made all the time.

However, if you are a Comcast customer, you can fire them and replace the service with AT&T or another provider.

My personal view is that this is a battle between the ISPs and video service providers. Netflix's business model has essentially zero transportation cost for local delivery. It obviously has to provide its own circuits out of the servers to some hub, but the majority of the transportation cost is paid for by ISP customers. This is inherently unfair to ISP customers that do not partake of streaming videos, and the logical answer to that of demand-based pricing is difficult to sell to customers.

The ISPs would like to be in the business of streaming content as well as to have a better handle on customers that use disproportionate bandwidth at the same flat rate a low volume customer does.

If the result is a market failure, where all the ISPs react the same way then perhaps it's time for the Congress to revisit the question of common carrier classification, although it's not clear to me that the ability to classify a competitive service as subject to mandatory service regulation passes Constitution muster as easily as it did in 1934. Or, perhaps there's an anti-trust action, if conscious parallelism is still a viable concept to base an anti-trust claim upon.

Cliff said...

First amendment does not apply to private business transactions, such as for example between a consumer of the internet and an internet service provider.

Cliff said...

It's also not so rare that a community has but one provider. I personally have lived in a few places as such.

Birkel said...

Cliff:
You lived in a place that didn't have DirectTV and DishNetwork? A couple of those places? Color me puzzled.

While the First Amendment might not have a role, American telecommunication companies that censored content would find themselves confronted by angry ex-consumers in short order, I predict. I'd be just as upset with censorship regardless of content. You?

So what makes anybody think companies are likely to pursue the avenues of censorship in a competitive market environment? And if it's not a competitive market to your lights, it's most likely the government has created and enforced monopolies through both federal and state legislation. Why does anybody suspect more government will solve problems caused, enforced or exacerbated by those very governments?

Revenant said...

It's also not so rare that a community has but one provider. I personally have lived in a few places as such.

I've lived lots of places that had lousy internet access. That's because I'm in my 40s, and in the 70s, 80s, and even most of the 90s the options for internet access were scant.

But this is 2014, and you'd be hard-pressed to find any place in America that doesn't have access to at least three options for internet access.

Revenant said...

The difference is that bandwidth is a known quantity and a natural monopoly.

In reality, of course, available bandwidth constantly increases and new means of accessing it arise on a regular basis.

The only way of maintaining a monopoly on bandwidth is by charging so little that nobody can profitably build competing bandwidth.

Rusty said...

PB Reader said...
Given the near monopoly (duopoly) status of ISPs, I think net neutrality is an important concept, as the amount customers pay to an ISP not only pays for the ISP infrastructure, but it also pays for the high-bandwidth connection to the internet backbone providers.

Then rather than regulate the internet why not make it possible for anyone to be an ISP provider?
For the most part regulations only serve to benefit the major players in any market. Regulations limit choice.

Robert Cook said...

"The government keeps wanting to control everything."

This is not "the government" wanting to control net access, but the private content providers and cable companies. They're monetizing access to online content.

The government is aiding and abetting the rape of the public by the private sphere.

khesanh0802 said...

After I wrote it I realized that the First Amendment really did not apply. @ Birkel's comment makes my point much better.

Rusty said...

Robert Cook said...
"The government keeps wanting to control everything."

This is not "the government" wanting to control net access, but the private content providers and cable companies. They're monetizing access to online content.

The government is aiding and abetting the rape of the public by the private sphere.

Monetizing isn't a bad thing. After all somebody has to pay the expense of providing a service. A free market open to anyone with the money and wherewithal to participate would naturally drive down prices and improve service.

Robert Cook said...

"Monetizing isn't a bad thing."

Private vendors want to monopolize web access

From the article:

"Historically, ISPs must treat all data equally and are barred from slowing down or blocking websites. Verizon claimed that FCC regulatory practice violates its 1st Amendment right to edit, prioritize or block its customers’ access to the Internet."

Basically, the web to this point has been freely available to the public, with anyone who wishes able to access any site they wish or able to create their own site. Under the desired new scheme, many will have their access blocked or hindered unless they are able and willing to pay higher fees.

This may seem good to you, but it seems bad to me. This is not the same as setting up for-pay sites, but amounts to establishing toll-roads to access the web.

And how does Verizon claim it has a "first amendment right" to block access for its customers?

themightypuck said...

The difference is that bandwidth is a known quantity and a natural monopoly.

"In reality, of course, available bandwidth constantly increases and new means of accessing it arise on a regular basis.

The only way of maintaining a monopoly on bandwidth is by charging so little that nobody can profitably build competing bandwidth."

I guess it could be true that no one is competing because prices are too low. It is certainly the case that wireless is way more expensive than cable.