In 2010, the FCC developed three basic policies regarding broadband: Broadband providers need to be transparent and could not block any lawful content or discriminate while assigning bandwidth.
Internet Service Providers, or ISPs, were expected to behave like common carriers and were not allowed to give preferential treatment or faster speeds to online content carriers. This month, Verizon Wireless responded by challenging those policies in court-and won.
On January 14, the District of Columbia Court of Appeals ruled in favor of Verizon Wireless in their case against the Federal Communications Commission, stating that since broadband is not a ‘common carrier,’ network neutrality is essentially not protected.
Internet service providers are now legally able to make deals with online content companies to give faster download speeds, essentially giving the information highway a fast-track lane.
Netflix investors took notice of the ruling and the company experienced a five percent drop in company stocks during trading the next day. Their stock value since then has slowly begun to recover.
Proponents of the net neutrality deal are concerned that the barrier of entry for newcomers will be raised. Not being able to pay the same fees as a wealthier, more established company would stop their websites from competing at the same level. A tiered structure could legally oppress or slow down specific Internet traffic.
Supporters of the ruling say this will give companies another facet to compete on which could result in shorter buffer times on key websites for the consumer. The business model could be shifted so that companies pay a fee allowing subscribers’ access to their website without it counting against data limits, for example.
The judges struck down the FCC’s regulations not because the FCC is wrong about the necessity of rules, but because the FCC’s argument is flawed.
The FCC based their argument on broadband providers being common carriers (a concept we borrowed from the Romans-a ferryman could not deny passage on public waterways because it would hinder commerce). In 2005, the Supreme Court ruled that broadband is classified as an “information service,” but not a “telecommunications service,” thus is not subject to common-carrier regulations.
“The FCC has adequately supported and explained its conclusion that absent rules such as those set forth in the Open Internet Order, broadband providers represent a threat to Internet openness,” said Judge David S. Tatel, judge for the United States Court of Appeals for the District of Columbia Circuit.
“[They] could act in ways that would ultimately inhibit speed and extent of future broadband deployment.” He continued to say that the commission would retain “general authority to regulate in this arena.”
Tom Wheeler, Chairman of the FCC, says the commission is considering all options. They can appeal, write new regulations (as long as they have a legal basis) or attempt to reclassify broadband as a “telecommunications service” instead of an “information service.” The US Congress could also pass legislation that outlines regulations.
The open Internet advocate group, Free Press, posted a petition on their website asking the FCC to appeal. The petition posted on Jan 20th has generated more than 100,000 signatures and as of Jan 21 has been delivered to the FCC.