Verizon vs. FCC

01.14.14

Up To Speed: Here is Everything You Need to Know About The Recent Blow to Net Neutrality

A federal appeals court just ruled the FCC’s 2010 Open Internet Order struck down, dealing a devastating blow to so-called ‘net neutrality’ guidelines. Here’s what you need to know.

In a ruling today from a federal appeals court in Verizon v. FCC, most of the FCC’s 2010 Open Internet Order was struck down, dealing a body blow to net neutrality. You’re probably wondering: What the heck does that mean? To catch you up with the hot-button issue, here’s an up to speed.

1. So what exactly is net neutrality?

Net neutrality is the idea that internet providers like Comcast, Time Warner Cable, Cox, etc., should not be able to play favorites with the variety of content going through their networks. For instance, preventing Comcast from favoring streaming capabilities for NBC, which it owns, over CBS, Fox, and ABC. Supporters see it as a way of keeping a vital technology open so that innovative entrepreneurs aren’t killed by those who “own” the internet. Opponents and providers see it as an unnecessary regulation that hurts potential revenue streams.

2. What was ‘Verizon v. FCC’ all about?

In 2010, a federal court ruled in favor of Comcast that the FCC did not have authority to regulate the provider’s interference with peer-to-peer networks. As a result, the FCC laid out its 2010 Open Internet Order, which is what today’s ruling in Verizon v. FCC was regarding. The Open Internet Order essentially laid out (PDF) three requirements. First: fixed providers could not block legal content, applications, services, or non-harmful devices, while mobile providers could not block legal websites or competitive voice and video services. Second: the fixed broadband providers could not discriminate against legal traffic. And finally: all providers must disclose information regarding their practices and performance.

The FCC viewed this as essential because the “majority of Americans [have] only two wireline broadband choices (many have only one), [and] market discipline alone could not guarantee continued openness.” The even more controversial part was whether the FCC has enforcement authority (which it argued it does based on a 2012 ruling, Cellco Partnership v. FCC).

Part of the problem stems back to a controversial decision the FCC made in 2002 under Republican Commissioner Michael K. Powell to deem internet service as an information service rather than telecommunications—which, the court ruled here, freed them of the regulations from the previous eighty years focusing on telephone companies.

“Net neutrality is the idea that internet providers like Comcast, Time Warner Cable, Cox, etc., should not be able to play favorites with the variety of content going through their networks.”

3. Okay. So what was Verizon’s argument?

Along with its competitors, Verizon has spent billions of dollars building up its services, and as a result it believes it has the right to manage the internet as it sees fit. Verizon is also arguing that the FCC is trying to ban something that hasn’t become a problem, saying there have only been four documented examples of providers acting counter to the regulations laid out in the order. In addition, it questions whether the FCC has the authority to implement the rules at all.

Moreover, Verizon made both a First Amendment and Fifth Amendment argument as to its rights in controlling the internet. In the crudest sense, Verizon basically believes that it is exercising editorial judgment over the internet, and as a result those are protected as free speech. The Fifth Amendment, they argued, protects Verizon from what it views as the government essentially seizing property Verizon has paid for.

4. So what happened at the court today?

The court threw out the anti-discrimination and the anti-blocking rules in the order. However, it did hold in place the disclosure regulations—so theoretically the providers will at least have to tell you why Teen Wolf on Netflix won’t load quickly.

The court does mention (PDF) the FCC’s decision to classify internet providers as information rather than telecommunication (which is why the court says it lacks the regulatory authority). Advocates for net neutrality have pushed the FCC to reclassify internet providers for precisely this reason, but are fiercely opposed by members of Congress and by the providers.

5. What other big issues should I be keeping my eyes on?

This ruling is one of just a number of technology-related issues roiling in Washington right now. The Supreme Court recently agreed to hear a lawsuit from TV broadcasters over streaming start-up Aereo which has ticked off the broadcasters for its service which picks up free, over-the-air TV signals and streams them to customers via the internet. The Supreme Court also recently declined to hear an appeal on a patent case from a notoriously litigious software firm after a lower court ruled in favor of the opposing online shopping site. And the FCC recently said it is going to be keeping a close eye on AT&T’s recently announced sponsored data plan.