Verizon v. F.C.C. ruling: Court invites net neutrality regulations under proper legal framework

January 20, 2014

net neutrality rulingLast week, I received an email informing me that “net neutrality died.”

This was, of course, in reference to the D.C. Court of Appeals ruling from last Tuesday that sided with Verizon in its challenge to the Federal Communications Commission’s Open Internet Order from December of 2010.

This order prohibits fixed broadband providers such as Comcast and Verizon from “block[ing] lawful content, applications, services, or non-harmful devices, subject to reasonable network management” – a principle more commonly known as “net neutrality.”

This “net neutrality” means that, under the order, broadband providers cannot discriminate against certain content providers by limiting or altogether blocking access by the broadband providers’ subscribers to that content.  For example, this order prohibits Comcast from limiting its subscribers’ access to Netflix (unless Netflix paid a premium to allow unlimited access by Comcast customers).

With the anti-discrimination provision of the order struck down by the D.C. Circuit Court of Appeals, it seems that “net neutrality” truly is “dead” …or is it?

Although lacking the same attention-grabbing, call-to-action effect of the email’s original subject line, it would actually be more accurate to say that “net neutrality has been knocked unconscious.”

Whether it wakes up is all dependent on how the FCC proceeds from here.

Here’s what I mean by all of that: while it’s true that the court of appeals struck down the provision of the order imposing net neutrality on broadband providers, it did so by effectively inviting the FCC to make the appropriate administrative changes such that it would be able to legally impose net neutrality in the future.

If you actually read the first 20 pages of the court’s opinion without reading the synopsis first, you wouldn’t believe that it was going to rule against the FCC’s net neutrality order.  The opinion repeatedly dismisses Verizon’s arguments while recognizing the need for the FCC to impose net neutrality on broadband providers.

Perhaps most importantly, the opinion also holds that the FCC has the appropriate statutory authority to regulate broadband providers.

Where does the FCC go wrong with the court?

Well, back in September 2013, right after the oral arguments for this case, I wrote that the odds remain in Verizon’s favor because “of a decision made by the FCC in 2002, then led by Republican Michael K. Powell: to classify [Internet service providers (ISPs)] as an ‘information service’ rather than a ‘telecommunications service.’”

This is the reason why Verizon won: because the 1996 Telecommunications Act holds that “a telecommunications carrier shall be treated as a common carrier under this [Act] only to the extent that it is engaged in providing telecommunications services.”

The D.C. Circuit Court of Appeals held that the FCC was treating providers such as Verizon as common carriers (by requiring non-discrimination in its provision of broadband services) – which, by the way, is completely accurate – and that such treatment is not allowed by the plain language of the 1996 Telecom Act, which does not allow information services to be regulated as if they were common carriers.

Because the FCC has not changed its position on the classification on ISPs (a.k.a. broadband providers), in that they are still regarded by the FCC as “information services” instead of “telecommunication services,” they cannot be treated as common carriers.

All the FCC has to do to fix this is to rule that broadband providers – you know, companies that provide telecommunication services – are “telecommunication” service providers under the legal framework of the 1996 Telecom Act, and presto: the imposition of net neutrality is safely within the scope of the FCC’s authority.

Given the staunch political resistance of most Republicans to such a reclassification, it’s easier said than done for the FCC to accomplish this.  Nevertheless, while it may be difficult, it’s not anywhere near impossible.

I would be surprised if the FCC didn’t make an honest attempt in the coming months, considering the public interest groups rallying behind the principles of net neutrality, but time will tell for sure.

In other words, net neutrality isn’t actually dead; it’s just being remodeled.