See feature article below: AT&T, Inc. (NYSE: T)
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Report For: AT&T, Inc. (NYSE: T)
AT&T, along with other Internet Service Providers have been embroiled in lawsuits with the FCC in an attempt to slow down the Internet to some customers so they can offer a multi-tiered Internet speed service to consumers at multi-tiered pricing. Yesterday the FCC and internet consumers scored a win.
A critical court ruling on Tuesday upheld long-contested rules that stop your internet provider from blocking or slowing sites — ”net neutrality,” in fewer words.
The ruling by the US Court of Appeals for the DC Circuit upholding the Federal Communications Commission’s net-neutrality rules is a weighty read, but for Big Telecom it boils down to eight words: You get nothing! You lose! Good day, sir!
This means the FCC’s regulations stopping your internet provider and wireless carrier from blocking or slowing your access to a legal site, service, or app — or charging one for priority delivery — live on.
The argument over net neutrality does, too. But the odds of winning it got a lot worse for opponents of the FCC’s regulations and the general idea of stopping your internet providers from tampering with your connection to the online world.
Your ISP can still charge more for faster downloads, impose data caps and maybe even exempt some services from those limits. But first it must give you the internet, the whole internet and nothing but the internet. And on the other end of the connection, some new online startup doesn’t have to worry about being asked to pay extra to reach you.
How we got here
The conclusion of the 115-page ruling by Judges David S. Tatel and Sri Srinivasan in United States Telecom Association, et al., v. Federal Communications Commission shouldn’t have surprised anybody who read the same court’s January 2014 opinion that rejected earlier, weaker net-neutrality rules.
In that case brought by Verizon (VZ), the court essentially said that if the commission wanted to regulate internet providers as “common carriers” — a legal status that’s long governed telephone utilities but also railroads and taxis — it had to label them accordingly.
Which, in turn, would require the FCC to hit the Undo button on decisions a decade earlier to classify broadband providers as “information services,” not the simpler definition of “telecommunications services” that happens to match the usual understanding of what ISPs do — connect you to the internet.
After a prolonged public outcry over the possibility of the FCC caving — remember comedian John Oliver comparing FCC chair Tom Wheeler to a dingo? — the commission took the court’s hint. In February of 2015, it put wired and wireless broadband providers back in the utility-esque common-carrier bucket and then adopted net-neutrality rules.
Various telecom companies and organizations promptly sued to overturn those rules, and we now have the court’s word.
(Disclosure: I’ve spoken at events hosted by organizations on both sides of this argument; for about a year I wrote for a tech-policy blog, the Disruptive Competition Project, sponsored by the Computer & Communications Industry Association, which filed a brief backing the FCC.)
Two words: dumb pipes
This 2-1 ruling (Tatel and Srinivasan’s colleague Judge Stephen F. Williams filed a dissent) focuses on the difference between “information” and “telecommunications” services as defined in the Telecommunications Act of 1996.
The former most closely describes AOL and other pioneering online services, which bundled not just a connection but software and services.
The latter matches today’s internet access, where you pay for the connection and then go to other sites — like, perhaps, today’s Aol, a division of Verizon that runs sites like Engadget and TechCrunch (and tends to a dwindling audience of dial-up users).
Internet providers may not appreciate being defined as “dumb pipes,” but the definition fits. They haven’t seriously tried to offer something like an “information service” since the 2001 demise of cable service Excite@Home.
How can the FCC make that call? Because, the judges wrote, the Supreme Court said so in a 2005 case. That might not matter had Congress since labeled ISPs as information services — but it hasn’t. And a 1984 Supreme Court ruling lets regulatory agencies like the FCC make their own reasoned calls in the absence of Congressional direction.
Good luck overturning this
One party to the just-decided lawsuit, AT&T (T), is already vowing to appeal this case to the Supreme Court, while others have not gone beyond moping about its unfairness.
Continuing this strategy of relentless litigation might not be smart. The court’s ruling stands on those two Supreme Court precedents — and Williams’ dissent accepts that the FCC worked within the outlines of the Telecommunications Act, while then faulting its logic.
Besides, appealing to the highest court in the land would mean a few more years of net-neutrality rules remaining intact.
While Congress could technically vote tomorrow to revise the Telecommunications Act, t hasn’t been able to do any such rewrite in over 20 years.
To be sure, an anti-net-neutrality candidate — namely, Donald Trump — could win the 2016 presidential election and then appoint FCC commissioners who would axe the net-neutrality rules.
But while Trump opposes it — he called it a “top down power grab” in a 2014 tweet — he’s also widely loathed outside his Republican primary base.
Hillary Clinton, meanwhile, applauded the ruling in a tweet that called it “a big win for consumers, innovation, and freedom of expression on the internet.”
But the larger problem here is that fighting net neutrality looks like a political loser.
It requires believing promises of future online media services that couldn’t survive without paid prioritization over a documented history of large internet providers demanding that real online media services like Netflix pay for the data used by their own customers.
(Internet providers may yet all wind up giving up on improving their services because net neutrality eats into their profits, but the evidence for that remains thin.)
Net neutrality often comes with a side order of shrill extremism denouncing it as “regulating the Internet” — even though it doesn’t limit what you do on the Internet — if not outright Marxism.
And it not only requires taking the side of giant corporations, it demands standing up for cable and phone companies in particular, some of the less-liked firms in America. Are 2016’s candidates ready to nail their colors to the mast for all that? If so, I have two more words: good luck.
Source – Yahoo Finance / Rob Pegoraro
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