Senate upholds FCC net neutrality rules; what happens in court?

November 15, 2011

FCC sealLast week, a measure designed to block an “unprecedented power grab by the FCC” that is another example of “new and destructive regulations… [that] are freezing our economy” was voted down in the U.S. Senate.

This FCC “power grab” is the FCC Open Internet Order, approved on December 21, 2010, and scheduled to take effect on November 20, 2011.

What, exactly, is the Open Internet Order?

It is, in short, a set of rules enforcing “net neutrality.”

What is “net neutrality?”

In the broadest sense, net neutrality is the idea that no Internet service provider (ISP) or government entity can restrict consumer access to content, websites, platforms, etc.

The FCC’s Open Internet Order enforces net neutrality by preventing ISPs from discriminating against or altogether blocking lawful network traffic (this is a bit oversimplified, but you can read the full 190+ page Order for more detail).

This means that an ISP can’t blacklist lawful websites, games, or services.

For example, Comcast the ISP cannot block or slow their customers’ Internet connections to Netflix or iTunes.

Why would Comcast even want to do this?

Considering that Comcast owns NBC Universal, which itself owns Hulu as part of a joint venture with other media corporations, Comcast’s blocking customer internet traffic to iTunes and Netflix would be a major blow to its competition.

The Senate vote on the measure was 52-to-46, completely along party lines (with John McCain (R-AZ) and Daniel Inouye (D-HI) abstaining).

As for the two aforementioned accusations leveled by Senate Republicans against the Order – that it’s an “unprecedented power grab” and destructive to the economy – are either accurate?

The question on the economy is harder to qualify, but considering that net neutrality increases consumer access to information and services, and consequently generally encourages competition, it seems unlikely the Order will have any kind of “freezing” effect economically.

The “power grab” claim, loaded and colorful language aside, may be a bit more accurate.

By “power grab,” opponents of the Open Internet Order aren’t actually saying the FCC is taking control of ISPs or networks.

Rather, they are claiming that the FCC is overstepping its regulatory bounds.

But is it?

To even hope to answer that question, we’d have to go back to the Order’s origins in 2007, when the FCC, responding to several complaints by customers and consumer advocacy organizations, issued a cease-and-desist order against Comcast.

These numerous complaints claimed that Comcast was “throttling” bandwidth (or restricting upload and download rates) for the peer-to-peer connections (i.e. BitTorrent) of its customers.

Comcast sued to vacate the order, and won on appeal in April 2010.

However, the opinion doesn’t provide a lot of guidance for future FCC regulations.

Instead, it held that the FCC didn’t tie its assertion of ancillary authority over Comcast’s Internet service to any “statutorily-mandated responsibility.”

That sounds more complicated than it actually is: basically, since the FCC doesn’t have specifically congressionally mandated responsibility to regulate ISP bandwidth governance, the FCC needs to assert “ancillary authority” over it.

This is done by tethering the targeted area to be regulated to an area which the FCC already has explicit regulatory responsibility, which the court of appeals held here that the FCC failed to do.

Will the FCC fail in the courts again?

We won’t know for sure until we see a ruling (or an FCC brief, at the very least), but it seems unlikely that the FCC would attempt to use the same argument for its authority for its Open Internet Order that was just struck down in court eight months earlier.

If the Order is struck down, net neutrality is essentially dead unless, of course, Congress decides to act on the issue.

But I wouldn’t hold my breath waiting for that to happen.