The Law and Politics of Net Neutrality: Part 1

The current political climate portends significant political changes following today’s midterm elections.  The balance of power will likely shift back toward the right, greatly reducing the governing mandate of the Democratic Party.  The current administration’s ability to push policies through will be tempered by a shift of power in Congress, possibly preventing the Obama administration from achieving its stated policy goals after two years in power.  One of the policy goals under attack is Net Neutrality, a term popularized by Tim Wu, professor here at Columbia Law School, and an issue that has greatly divided political actors in this country.

What is Net Neutrality, and Who Gets to Define It?

Generally speaking, Net Neutrality is the aspirational principle “… that all Internet traffic should be treated equally.” (Wikipedia).  President Obama himself has explicitly supported this idea, both back in 2008 on the campaign trail, and more recently.  It has been variously been described by commentators as “… the fundamental principle that preserves the free and open Internet[,]” and a government takeover of press and media freedoms.

But without details to give the term real-world effect, the concept of “net neutrality” becomes ill-defined and infinitely malleable, fitting into any of the myriad narratives presented to the public.  It is certainly conceivable that net neutrality regulations can be the First Amendment issue of our time — a bedrock principle that will allow the Internet to become an equal-access, unfettered marketplace of ideas.  At the same time, that same equality, for others, only represents an excuse for a new Orwellian government-imposed censorship scheme.  Will net neutrality enable technological innovation, or stifle it?  The answers to these policy debates lies at the confluence of technology, economics, and politics, the implementational (or non-implementational) details of which will ultimately be written into the law.

The FCC Definition: The Open Internet Rules

The details of implementing Net Neutrality regulations lie with the Federal Communications Commission (FCC), which was created and vested with the power to regulate telecommunications by the Communications Act of 1933, since amended by the Telecommunications Act of 1996.

In 2007, the STLR blog commented on the current state of the law relating to Net Neutrality; since then, we have had an administration change, the issue has been brought from academic and technology policy circles into the mainstream, and agency action as well the legal landscape have progressed greatly.  However, the form and substance of future net neutrality regulations remain uncertain.

The FCC has dubbed its own flavor of Net Neutrality the “Open Internet Principles”, which were first made public in 2005.  While this statement of policy objectives has no legal implications, it was intended to pronounce a set of guiding principles for FCC rule-making — to give the public and the telecom industry more certainty in its business decisions going forward as the FCC continues to regulate.  (Telecommunications is conducive to natural monopolies, and is heavily regulated under the Communications Act under common-carrier principles, similar to utilities and railroads.)  In October 2009, The FCC made waves in the telecommunications industry when it released a Notice of Proposed Rule Making (NPRM) to collect public comments and build up an administrative law record before codifying the former Open Internet principles as rules that carry the legal force of Federal Regulations.  The Open Internet principles have been redrafted, and expanded to a list of the following six rules:

1. Content. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet.

2. Applications and services. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from running the lawful applications or using the lawful services of the user’s choice.

3. Devices. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network.

4. Competitive Options. Subject to reasonable network management, a provider of broadband Internet access service may not deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers and content providers.

5. Nondiscrimination. Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications and services in a nondiscriminatory manner.

6. Transparency. Subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application and service providers to enjoy the protections specified in this part.

See National Broadband Plan at 58; Open Internet NPRM paras. 88-132.

While the first four rules (mandating lawful applications, services and content to be freely available to Internet users) track the intent of the original 2005 Open Internet principles quite closely, they did not speak to what is at issue for many Net Neutrality advocates and detractors today — the ability of ISPs to shape traffic (prioritize certain services or websites over others), or to degrade certain bandwidth consumptive, or business-model changing applications such as BitTorrent or Skype.  This is where the most contentious of the two new rules, the fifth non-discrimination rule, comes in.  It prohibits discrimination of lawful connections and content, directly the call for Internet Service Providers (ISPs) to treat all lawful sites and services “equally.”

The Devil is in the (Lack of) Details

The language of the proposed rules has been subject to much scrutiny.  The qualifying terms “subject to reasonable network management” that preface each of the proposed Open Internet rules leaves much room for agency discretion in composing the rules.  At its greatest extent, the non-discrimination rule is, as Susan Crawford, President Obama’s former special assistant for science, technology, and innovation and Cardozo Law School professor describes, a total lack of differentiation of treatment between data sent over the network.  All content and applications will be treated equally on a first-come, first-serve basis, regardless of the type of data, its originator, or its content.  In practice, however, many Internet providers prioritize some forms of network traffic, though the network management tactics are not as egregious as degrading a service or application to the point of unusability, or blocking it altogether, as Comcast did with BitTorrent in 2006.

Indeed, where on the spectrum a line can be drawn to separate “reasonable” and “unreasonable” network management is not yet clear.  That evaluation will certainly be subject to technological change as much as it is to agency rulings and adjudicatory precedent.  The current FCC proceeding contains public comments on what the Open Internet rules should be that run the gamut of possibilities.  The FCC continues to seek public comments on the NPRM, but has not promulgated any rules at this point.

D.C. Circuit: Broadband Internet Cannot Be Regulated as Telecommunications

Further complicating the FCC rule-making authority is an April 2010 decision of the D.C. Circuit which ruled that the “broadband Internet access service” that the FCC seeks to regulate in the Open Internet NPRM is beyond the agency’s jurisdiction to regulate telecommunications services.  See Comcast Corp. v. F.C.C., 600 F.3d 642 (2010).

This surprising decision has catalyzed a slew of agency and industry actions.  Not long after the Comcast decision, the FCC proposed reclassification of broadband Internet to define it as a telecommunications service subject to common carrier regulations but practicing regulatory forbearance in a “third way”.  The approach draws legal support for reclassification of broadband Internet services from Justice Scalia’s dissent in a curious 6-3 Supreme Court decision that counted Justices Souter and Ginsburg as Justice Scalia’s allies in the minority. See Reclassification NOI, paras. 28-99, Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005).

The Commission also held closed door meetings with telecommunications and technology giants such as Verizon, Comcast, Google and AT&T, allegedly attempting to bring them to a compromise on draft legislation on Net Neutrality to submit to Congress.  These secret meetings excluded public interest and advocacy groups, which prompted advocacy group Free Press to decry the FCC’s actions in full page ads in the Washington Post.  Eventually, FCC Chairman Genachowski canceled the closed door meetings, after the talks broke down.

Concurrently, the terms of a separate and secret Net Neutrality deal between Google and Verizon were being dickered out (even while they were participating during the closed door FCC meetings), with Verizon guaranteeing non-discrimination over wireline broadband networks, and Google conceding to allow a discrimination exception for next generation (e.g. 3G and better) wireless broadband networks.  Most recently, draft legislation that works as a legislative end-around for FCC’s proposed rules was leaked from the office of Rep. Waxman (D-CA).

And the high drama of regulating the multi-billion dollar telecom industry continues.

The tumult at the Federal Communications Commission this past year has resulted in largely the same regulatory uncertainty and business-as-usual for the large telcos; they are careful not to overstep their bounds of what is perceived as “reasonable network management” and provide fodder for the FCC to gain a stronger public mandate to impose Open Internet Rules.  Whereas this blog’s 2007 article spoke at length about the battle over the Open Internet, it is clear that it has turned into a protracted war on the litigation, lobbying, and public relations fronts by all parties involved.  Whether it be the government, technology companies with conflicting interests, or public advocacy groups, there will be much more input and action from Congress, the Courts, and the FCC to come yet.

Connecting Legislation Back to Politics

So now, we come back to the latest battle in the Net Neutrality fight — the Nov. 2nd midterm elections.  In fact, the likely result of the election has already had an impact.  The recently leaked Net Neutrality bill acts against the Democrat-led FCC’s attempt to reclassify broadband Internet and bring it back under the ambit of the FCC’s jurisdiction.  The FCC will find itself in an increasingly hostile political environment, as rejuvenated Republicans in Congress push for less Open Internet regulations that they contend would hurt the economy at a critical time.  The FCC may be hesitant to regulate for fear of legislative overrule and repudiation.

It is difficult to know exactly the eventual fate of the proposed Open Internet rules and the ability of the FCC to regulate broadband Internet in the future.  Looking forward, I plan to post about the complex machinations that provide legal context to the current regulatory framework for broadband Internet, and the legislative implications of the mid-term election results.  With the number of powerful interests and the amount of money at stake, it won’t be easy to foretell what’s to come for Net Neutrality in the coming months and years.  But, if there is one thing for certain, it is that the Net Neutrality discussion will be around for some time to come!

2 Replies to “The Law and Politics of Net Neutrality: Part 1”

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