Wednesday, January 15, 2014


I’ve been all abuzz, the past day and a half about “net neutrality.”  What set me off was a sense that the lawyers, all 66 of them counting the 3 judges of the DC Court of Appeals, and 63 pleaders for various and sundry interests in the case, were  complicating issues that were very simple.

But, of course, simplicity can be complicated.

Here are a few of the, to me at least, remarkably simple issues at stake in the net neutrality case.

First, let’s define the term “net neutrality.” 

For all forms of mass communication there are just 2 essential elements: content and distribution.  What “net neutrality” means is, on the Internet, everyone can contribute content and all content is distributed equally. 

So, far this perfectly democratic economy has worked pretty well.  In roughly 30 years the internet has become by far the most massively used, most information-packed means of communication in human history.  Innovations in both content and distribution have been broad and deep and constant, and more than profitable enough to sustain dramatic growth.

Even if entrepreneurs had to offer their products and services to an inefficiently indiscriminate audience to reach their target: people with money to spend, the payoff to them sufficed, and the access the free-loaders got without spending a dime paid off for them in increasing knowledge and understanding and, perhaps, fellow-feeling.

Now comes yesterday’s decision, a ruling which does nothing less than turn the heretofore successful democratic economy of internet communication into just another branch of the market economy.

What this means is, ISPs, Internet Service Providers, while pledging to keep the content contribution stream wide open, may discriminate in how that content is distributed, with “better service,” faster, higher quality, wider distribution, now for sale to the highest bidders.  This is great for the oligarchy of ISPs, who now have a new source of income, and for the oligarchy of big content providers, who will now be able to pay their way to superior access to markets, while shunting their smaller, less rich competitors aside.

According to yesterday’s winners, Verizon, Comcast, Sony Entertainment et al, this fountain of fresh money will water a garden of creativity, with content creators now being offered new and better funded platforms for their insights, innovations and entertainments.

But, before yesterday, did any visitor to the internet feel deprived of creative offerings?  And is not one of the charms of the internet that, given the merest bit of Googlography, you can as easily access small-time content providers (SELF-INTEREST ALERT!!) like me, as the latest new thinking from big spenders like General Motors, General Electric, or F**kbook? 

It now looks like I and other penny-ante contentists, will be shunted to the slow lane, literally, and for “ordinary” users, their internet may be analogous to “basic cable.”   So guess who the big losers were in yesterday’s decision.  Yep, us.

If the day before yesterday’s net neutrality wasn’t broke, why did the Federal Court fix it?

That, too, is remarkably simple to explain.

As Judge David Tatel wrote in his decision, as simple as 1, 2, 3.     

(1) “Even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates.

(2) “Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.”

(3) “We think it obvious that the Commission would violate the Communications Act were it to regulate broadband providers as common carriers. Given the Commission’s still-binding decision to classify broadband providers not as providers of telecommunications services” but instead as providers of “information service. ... A telecommunications carrier shall be treated as a common carrier under this [Act] only to the extent that it is engaged in providing telecommunications services.”

Here’s a simple translation: The FCC speaks with a forked tongue. 

The Commission is meant to be the ultimate bulwark of public interest in the now almost entirely privately owned American mass communications industry.  Its public stance in Verizon vs. FCC  was that it was acting to protect the public freedoms inherent in net neutrality.  But that was effectively a sham.  Because, as Judge Tatel pointed out, literally again and again and again, the key to the case was that the Commission was trying to use “common carrier” regulations it had itself given away..

The FCC, since 2002 has defined what broadband services provide, Judge Tatel wrote, “not as telecommunications,” but as “information,” and common carriers, by definition, deal only in “telecommunications.”  This sweet little bit of quiet lawyering was promulgated by Michael Powell, the head of President George W. Bush’s FCC, the most completely corporatist chair in FCC history (and presently the head of the Cable TV industry trade association).

In 2009, a new President, Barack Obama took over, having campaigned as a proponent  of net neutrality.  He installed as his FCC chair an old law school friend, Julius Genachowski, who then promulgated what were called new rules, rules referred to as the Open Internet order and which were allegedly based on net neutrality.

Unfortunately, Genachowski talked the Obama talk, but he walked past Powell’s rule, the one  removing the internet from common carrier regulation, without actually changing it. 

This jurisdictional malfunction, Judge Tatel also repeatedly wrote in his new opinion, had been specifically called to the FCC’s attention in 2010, during another legal case the Commission lost. 

“For the second time in four years,” Judge Tatel noted in 2014, “we are confronted with a Federal Communications Commission effort to compel broadband providers to treat all Internet traffic the same regardless of source—or to require, as it is popularly known, ‘net neutrality.’”  And “This is not the first time the Commission has asserted that section 706(a) grants it authority to regulate broadband,” and lost in Federal Court.”

Genachowski’s successor, Tom Wheeler, as Edward Wyatt pointed out in the New York Times, came to the FCC after a career as “a lobbyist for the cable industry and wireless phone companies,” the very people delighted by what went down in court.

Wheeler, also, Wyatt reported, “has said he supports an open Internet, but he also has expressed willingness to allow companies to experiment with new ways of delivering Internet service.”

If Wheeler plans to get these new services to the public for free, he hasn’t said so, and now, his lawyers’ inevitable failure before the Court of Appeals seems to have opened the floodgates for services for sale.

Brad Cacos in PC World:

“Net neutrality advocates fear that without rules in place, big companies like Netflix, Disney, and ESPN could gain advantage over competitors by paying ISPs to provide preferential treatment to their company's data. For example, YouTube might pay extra so that its videos load faster than Hulu's on the ISP's network.

CNN Money puts the same idea into a contrary frame:

“Net neutrality advocates want to preserve the Web's status quo, in which providers such as Verizon and Time Warner Cable can't auction off priority traffic rights to one site over another, or impose tolls for high-bandwidth sites such as video streamers Netflix and Hulu.”

Verizon hailed the decision in the kind of dissembling language for which American capitalism has become notorious, opining that the court's ruling "will not change consumers' ability to access and use the Internet as they do now.

"The court's decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet," the company said.

Here’s a translation of that from Craig Aaron, president and CEO of the digital rights group Free Press   “[The Court’s] ruling means that Internet users will be pitted against the biggest phone and cable companies,” Aaron says, “and in the absence of any oversight, these companies can now block and discriminate against their customers’ communications at will.

"[T]he biggest broadband providers will race to turn the open and vibrant Web into something that looks like cable TV," Aaron’s statement continued. "They'll establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else."


Pay-for-your-play, Brian Fung of the Washington Post reported, is likely to be the post-decision order of the day.

“At stake here is an Internet provider's ability to charge Web companies such as Netflix for better service, which public interest advocates say may harm consumers.

Verizon,” he noted has just such a pricing plan in mind. 

"I’m authorized to state from my client today that but for these rules we would be exploring those types of arrangements," said Verizon lawyer Helgi Walker in September.


Can this Mardi Gras of monetization be stopped?  CNN Money quoted former FCC commissioner Michael Copps, now an adviser to the advocacy group Common Cause, urging the commission to preserve the Open Internet rules, by simply heeding the Court’s repeated warnings, and redefining “common carrier” to –as Sam Goldwyn might have said it, “include broadband in.”

"The Court's decision today,” said Copps, “is poised to end the free, open and uncensored Internet that we have come to rely on. Without prompt corrective action by the Commission to reclassify broadband, this awful ruling will serve as a sorry memorial to the corporate abrogation of free speech."

But Stuart Benjamin, a former FCC staffer writing for The Volokh Conspiracy, says the essence of the Court’s opinion need not be awful at all, except for Verizon and its fellow ISP plaintiffs:

Because, he says, the “D.C. Circuit opinion suggests the permissibility of a different form of “no-blocking” rule (one that the FCC’s general counsel at oral argument endorsed and claimed was the no-blocking rule the FCC in fact promulgated, but the D.C. Circuit read the rule differently).  [And] most importantly, the D.C. Circuit majority reads section 706 of the Telecommunications Act of 1996 as providing significant regulatory authority to the FCC.”

As Benjamin noted, the Court went out of its way to say, the FCC does have the power to regulate the internet, and if it could manage to do this relatively simple task of re-writing its own regulations, “It could classify broadband Internet providers as common carriers under Title II (as it had initially announced it would do back in 2010) and implement the net neutrality regulations that way. And of course Congress could change everything by passing new legislation.  But I’m not holding my breath.”

Why the pessimism?  Because this is America 2014, and big money, and big lobbying rule, and often “reform” laws, like the new regs meant to rein in Wall Street, contain little lawyerly time bombs, which when read more carefully than legislators often do, have exactly the opposite effect of what was allegedly intended.

In this case, Obama campaigned on defending net neutrality, his FCC Chair declared he would make it so, and when the rulebook hit the court, the Judges had no choice but to point out, the Commission had destroyed, originally by commission, then by omission, its own purported position..

WaPo’s Fung says, the FFC should be able to reclassify broadband as a common carrier.  But he says, it won’t “be easy, as major industry players are likely to resist any attempt to reclassify broadband under Title II of the Communications Act.”

"The reclassification," said John Bergmayer,  a senior staff attorney at Public Knowledge, which supported the FCC's rule “is legally clear,” but politically tricky.

I guess it would be crass to point out, as neither Fung nor Bergmayer do, the real political trick here is the faux-reform of the soi-disant “reformist” Administration.  Its FCC is as deep in the pocket of Big Media as its Treasury Department was captive to Wall Street while writing the crucial details of “finance reform.”

It’s the very definition of complicated simplicity: it’s called duplicity.



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