Today Verizon filed a brief as part of its lawsuit to overturn the FCC’s rules that pertain to ‘net neutrality.’ A 2010 ruling, Comcast Corp. v. FCC, laid much of the policy groundwork for current net neutrality rules that bind Internet service providers into giving all traffic equal berth, not slowing or speeding any specific content.
However, as reported in The Hill, the D.C. Court of Appeals struck down the core of that ruling. The FCC later went on to establish rules for net neutrality, under the title of “Preserving the Open Internet.” This is what Verizon is currently battling.
“This event was off the charts”
Gary Vaynerchuk was so impressed with TNW Conference 2016 he paused mid-talk to applaud us.
Verizon’s argument, the whole of which you can read here, is summarized in itself to make the following three claims: that the FCC is outside its authority, that its rules are unconstitutional, and that they are ‘arbitrary and capricious.’ To allow for Verizon’s full case, TNW presents the following excerpts [Formatting, selection, bolding: TNW]:
Outside its Authority
This appeal challenges the FCC’s second attempt to conjure a role for itself with respect to regulation of the Internet—in particular, broadband Internet access service. In Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010), [the D.C. Court of Appeals] vacated the FCC’s previous effort as exceeding its statutory authority. […]
Rather than proceeding with caution in light of Comcast, the FCC unilaterally adopted rules that go even farther than its prior action and impose dramatic new restrictions on broadband Internet access service providers. The Order imposes classic common-carrier obligations on broadband providers, requiring them to carry the traffic of all “edge providers” and even wading into price controls by setting a uniform, nondiscriminatory price of zero for such carriage. This regulation of Internet access service is expressly prohibited by the Communications Act (“Act”).
[T]he Order infringes broadband network owners’ constitutional rights. It violates the First Amendment by stripping them of control over the transmission of speech on their networks. And it takes network owners’ property without compensation by mandating that they turn over those networks for the occupation and use of others at a regulated rate of zero, undermining owners’ multi-billion dollar-backed expectations that they would be able to decide how best to employ their networks to serve consumers and deterring network investment.
The Commission [enacted] the Order without any evidence of a systematic problem in need of solution, candidly recognizing that the Internet was already “open” and working well for consumers. And the Commission singled out broadband providers for burdensome new regulation even though other key providers in the Internet economy have the same theoretical incentive and ability to engage in the conduct that concerned the FCC.
Taken as a whole, Verizon’s argument isn’t that hard to summarize or understand: The FCC is way out of the bounds of its authority, how we dictate traffic transmission is a form of speech that you therefore cannot regulate, and that while the Internet has been functioning well as is, to selectively drop this regulation on ISPs is both unfair, and unneeded.
To understand what Verizon is responding to, it’s necessary to look at the source document. Again, the FCC rules regarding net neutrality can be found here, TNW will be excerpting again, for brevity and clarity.
[The order is an] important step to preserve the Internet as an open platform for innovation, investment, job creation, economic growth, competition, and free expression. To provide greater clarity and certainty regarding the continued freedom and openness of the Internet, we adopt three basic rules that are grounded in broadly accepted Internet norms, as well as our own prior decisions:
1. Transparency: Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services;
2. No blocking: Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful Web sites, or block applications that compete with their voice or video telephony services.
3. No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.
Essentially, because it’s how the Internet was designed, and how it will best flourish:
Like electricity and the computer, the Internet is a ‘‘general purpose technology’’ that enables new methods of production that have a major impact on the entire economy. The Internet’s founders intentionally built a network that is open, in the sense that it has no gatekeepers limiting innovation and communication through the network.
Accordingly, the Internet enables an end user to access the content and applications of her choice, without requiring permission from broadband providers. This architecture enables innovators to create and offer new applications and services without needing approval from any controlling entity, be it a network provider, equipment manufacturer, industry body, or government agency. End users benefit because the Internet’s openness allows new technologies to be developed and distributed by a broad range of sources, not just by the companies that operate the network.
As with Verizon, TNW presents a quick and dirty summary: The Internet is best when it is opened, as it was designed, and therefore it should stay that way, with no gatekeepers, and our rules will ensure that. You will immediately note that either Verizon or the FCC must be wrong. Something can’t much be both unconstitutionally limiting of free speech, and at the same time aggressively pro free speech.
A Common Sense Reading
It would be simple at this point to simply circle the wagons, toss a ‘yeehaw net neutrality’ bumpersticker on this post, and hope that it snags some Reddit karma. But let’s do something more, this time around. Let’s compare what Verizon is arguing, and stack it against what the FCC is saying. We’ll start with the legality argument.
Inside the Boundary?
Of all of Verizon’s points, this one is perhaps the most difficult to manage; it’s at the heart of the legal proceeding – if it was an easy question, there wouldn’t be a lawsuit. The court decision against the Comcast case does have impact here, however, there is more to that story. As Comcast told TNW some time back, when the FCC formed a net neutrality panel, it has agreed to follow the rules no matter what. To wit: Comcast [has] directly informed TNW that the company, as part of the NBCUniversal transaction, has agreed to submit to the rules, even if they are overturned.”
That fact makes it hard to fully understand the legal precedent that the ruling will sustain; Comcast is still obeying the rules that the FCC laid out.
Adding to that, the FCC appears quite confident in its legal foundation. In a statement provided to The Hill, it said that it looks “forward to defending our open Internet rules in court,” and that its rules are a “strong and balanced framework is helping ensure that the Internet continues to thrive as an engine for innovation, investment, job creation, and free expression.” Most of that is boilerplate, but the agency certainly doesn’t appear to be trying to lower expectations concerning the ruling.
A final note on the idea of Verizon’s comment that “[The order wades into] price controls by setting a uniform, nondiscriminatory price of zero for such carriage.” Reading that you almost want to say, ‘sort of.’ Consumers, and every other customer of an ISP is paying for that carriage, in their monthly fee that they tend to the company. This is a difference of perspective: the FCC views the role of an ISP to roll out a conduit of Internet to a home, for the consumer to use indiscriminately, provided that the end user isn’t breaking any laws. Verizon, it appears, views anything on its fiber to be taking up its space, that that bandwidth isn’t already rented to the consumer via their contract, but is instead still its to decide what to do with. Those views are irreconcilable.
That last comment leads us directly into the question of whether or not the maintenance of all Internet traffic as equal crosses a free speech line. Verizon, as you have read, claims that the rules “[violate]the First Amendment by stripping [ISPs] of control over the transmission of speech on their networks.” We’re back, in a sense, to the last question: who is speaking?
If speech can be defined as the selective slowing, or speeding up of specific pieces of content on a network that consumers have purchased contractual access to, then Verizon has a case. If, however, the court feels that the Internet, being the headless horseman that it is (run by non-profits, built on datacenters run by giants, and delivered by myriad ISPs), isn’t something that can be thus constrained, then Verizon has no case.
I’m in no way behind firm limits on what counts as ‘speech.’ but I have a hard time following Verizon’s logic in this case. Essentially, if we grant Verizon its way, it can use its ‘speech’ to block the voices of others, and to promote others as it sees fit. This would grant Verizon editorial power over a medium that has never had such a censor; slowing down certain websites is a form of soft censorship, of course.
Even if Verizon is granted its case that its method of unilaterally changing the Internet experience of millions due to its corporate preference is in fact a form of speech, there appears to be a stronger case that free speech would be more wounded should it be given the specific megaphone.
Finally, we shall unite the FCC’s arguments, and Verizon’s. I’ve done so partially, but in this case they come head to head.
The new rules were put into place “without any evidence of a systematic problem in need of solution.
The record and our economic analysis demonstrate, however, that the openness of the Internet cannot be taken for granted, and that it faces real threats. Indeed, we have seen broadband providers endanger the Internet’s openness by blocking or degrading content and applications without disclosing their practices to end users and edge providers, notwithstanding the Commission’s adoption of open Internet principles in 2005.
Essentially, Verizon is saying that everything is just fine, and that the FCC is simply meddling. The FCC says that it isn’t. This is not hard to litigate. Take for example a recent $800,000 find, levied by the FCC, against Comcast, for breaking the rules that it agreed to (remember that Comcast statement from above?). Now, that fine was for something not directly related to net neutrality, the Washington Post nails its context:
The announcement comes amid growing scrutiny of Comcast and other cable providers, which are grappling with a transition by consumers to Internet video providers such as Netflix and Hulu. That trend threatens Comcast’s underlying cable television business and Comcast’s implementation of new data billing practices has drawn fresh attention from federal antitrust officials at the FCC and Justice Department.
The idea that all is well and good and perfect doesn’t quite stand up. To underscore the point, Senator Al Franken recently called upon the FCC to both speed up its regulation, and grow larger teeth, chewing the Commission for not properly enforcing the rules that Comcast agreed to.
Given the breadth of the complaints that Sen. Franken highlighted, the recent Comcast fine, and other rumblings, the idea that this issue is being drawn from nothing is specious in and of itself.
All told, Verizon’s going out with guns blazing against the net neutrality rules that the FCC has put into place. The language of its brief is sharp, and almost bombastic at times. Verizon’s best bet, so far as we can tell it, will be that the FCC is simply outside of its domain. If it can win that fight, the entire edifice could crumble. If not, its other arguments will have to stand, and they appear a mite shaky.
The FCC will respond in September, when it is due.
Top Image Credit: Eric Hauser