Government and Law

Court decision leaves question mark over net neutrality

Ruling could give ISPs significant power over content, pricing.

February 14, 2014
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A recent court decision by the D.C. Circuit Court of Appeals concerning net neutrality has those in the legal community keeping a close eye on developments.

The case arose after Verizon sued the Federal Communications Commission in an effort to overturn the FCC’s net neutrality rules, adopted in 2010.

Mark Smith, Rhoades McKee attorney, said the lawsuit involved both the concept of net neutrality and the process by which the FCC had implemented its net neutrality rules.

“The Court of Appeals for the D.C. Circuit … ruled on Jan. 14 that, in fact, the FCC had utilized an inappropriate rule-making process, and essentially blocked the use and implementation of the net neutrality rules (the FCC) had adopted,” Smith said.

Basically, because the FCC has classified Internet service providers like Verizon as information services, it cannot apply common carrier rules to those companies, which it was attempting to do with the net neutrality rules.

“In some senses it was a pretty narrow ruling because the FCC could go back and reclassify Internet service providers as common carriers. And if it does that, then this net neutrality concept would be appropriate and could be left in place,” Smith said.

So far the FCC has not indicated what it plans to do next — it could also try and have the case heard by the Supreme Court, but experts, including Smith, think that’s unlikely.

Until the FCC makes its next move, though, net neutrality hangs in the balance, as does its possible impacts on consumers and businesses.

What’s the big deal?

“The net neutrality concept is that data is just data, it just flows across the Internet without regard as to whether it is something from Amazon or something from Fox News or from Netflix. It’s just data, and we as consumers are used to logging on to the Internet and gaining access to whatever data we want,” Smith said.

Although users often have to pay subscription fees for certain online content and also pay a monthly bill from the service provider, net neutrality ensures providers cannot charge additional fees or apply different speeds specific to certain sites, essentially keeping the playing field level for online content.

“What would happen if this decision stands and the Internet service providers are not required to allow net neutrality, they could say you can still access all of those things of information that you want to, but in addition to paying the edge providers — the content providers — you’ve got to pay us as well,” Smith said.

Not only could service providers like Verizon, Comcast and AT&T require their own fees to access online content, they don’t have to apply those fees equally.

“They could say, for example, we think that Fox News is really where people ought to get their information so we are going to allow free and unfettered access to that. But if someone wants to tap into MSNBC, they are either going to get a slower feed or we are going to charge for it,” Smith said.

This could potentially lead to businesses having to pay a premium or form partnerships with service providers to keep their content free and open as it is now.

Smith pointed out that taxpayer dollars are part of what has allowed Internet service providers to operate their businesses in the first place.

“The reason that Comcast is able to get into your home is because they have put their tube, their wires, in the public access, the public right-of-way, in order to reach all the homes in a given subdivision,” he said.

“That, for years, has been the reason the cable industries have had to pay a franchise fee to local municipalities for the right to run its services through the public right-of-way. … So they are providing you that Internet service in some sense because they’ve been licensed to do that by the public.”

Smith said while it might not seem like a big deal right now, there is danger in allowing the decision to stand, and he points out that, as more and more cable customers cut the cords, these companies are looking for ways to make up lost revenue — and the end of net neutrality could open the door to that.

“Now AT&T and others have said, ‘Don’t worry, we aren’t going to do that,’ but the plain fact is, litigation was initiated to challenge those rules for that very purpose, and counsel for Verizon in that lawsuit admitted that they did indeed plan to charge new Internet tolls and favor certain content at the expense of other sites and services, so where do you take that?” Smith asked.

Last week Comcast reached an agreement to buy Time Warner Cable, a move that, once complete, will make Comcast the largest provider of television and Internet service. The purchase easily lends itself to the scenario Smith outlined.

The United States has come to rely on free and open Internet access, and people and businesses would be severely impacted if not completely hindered from conducting business without the current access that is provided.

Smith pointed out that his own industry has done away with the physical law library and instead pays fees to access those resources online. If that access were hampered in any way — through slower Internet speeds or higher fees — it could severely impact the legal community and the service it provides.

Not to mention there is already a digital divide between the people and businesses that can afford digital access and the latest technology and the ones that cannot. The loss of net neutrality could increase that divide and make it harder for smaller companies to compete, and for lower income people to access information and resources necessary for day-to-day survival.

Smith said if the FCC takes the step of reclassifying Internet service providers as common carriers, the net neutrality rules could then be enforced.

“But if they don’t take that step, then they either have to go to the Supreme Court to get this overturned, or we have to look out for what could potentially come,” he said.

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