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Net Neutrality: FCC Votes to Regulate ISPs as 'Common Carriers'

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By Mark Wilson, Esq. on February 26, 2015 10:07 AM

As expected, FCC commissioners voted 3-2 today to regulate Internet service providers (ISPs) as "common carriers" under Title II of the Communications Act of 1934. (It also voted to override state laws against municipal broadband, but that's another story entirely.)

The vote was split along party lines, with the commission's Democrats voting along with Chairman Tom Wheeler in favor of the proposal and the Republicans against -- in spite of Republican commissioners' attempt to delay the vote. The litigation will probably start immediately.

We're Not Making as Many Gobs of Cash as We Used To

Net neutrality has proven to be divisive even within the FCC. Commissioner Ajit Pai, a Republican, took the rare step of holding a press conference two weeks ago, when he parroted the ISPs' talking points that net neutrality would increase regulation (which is a prima facie bad thing, I guess), decrease "innovation," and "open the door to new taxes," reported The Wall Street Journal.

Of course, Title II regulation means none of those things. Regulating ISPs as common carriers means only that they can't discriminate in the traffic they carry. Currently, ISPs can (and do) charge a premium for some content, like Netflix, intentionally slowing down some kinds of traffic unless and until the source of that traffic pays ISPs a fee on top of the fee they're already paying to transport their data.

ISPs have always claimed that this is about bandwidth: Netflix users, for example, use more data than everyone else, so it's only fair to make them pay more to get their data faster, right? Yeah, not so much. Users already pay ISPs to transmit traffic at a speed of their choice, so why should they have to pay an additional premium just to get certain content? Independent research has shown that ISPs aren't anywhere near their bandwidth limits, and when they speak in private, ISPs readily admit that this isn't about network utilization; it's about tapping a new revenue stream.

Wheeler took the position that the Internet shouldn't be an untamed frontier where businesses can restrict access however they want: "The Internet is the most powerful and pervasive platform on the planet. It's simply too important to be left without rules and without a referee on the field," he said.

Once More, Unto the Courtroom

And of course, they'll fight. Their primary argument will be that Title II doesn't allow the FCC to regulate ISPs, which, unlike the phone company, provide both a "telecommunication service" and an "information service." The FCC can regulate the former, but not the latter. The distinction is important: In 2004, ISPs actually won a Supreme Court case back when the FCC was friendlier to them. At the time, the FCC concluded that ISPs provided only information services and thus refused to regulate them under Title II. The Supreme Court gave deference to the FCC in deciding how to interpret the statute, as "ambiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion."

Now, though, the shoe is on the other foot and ISPs will try to claim up and down that, even if ISPs are a combination of telecommunication service and information service, the FCC's reversal is arbitrary and capricious. That's a high bar, though: Basically, the ISPs would have to prove that the FCC acted on a whim with no thought at all. That's contrary to what happened during this rulemaking process, in which the FCC received over 4 million comments to the proposed change. It also issued a reasoned opinion explaining why it was seeking Title II regulatory authority.

Net neutrality will take a few more years and more attorneys fees before it becomes the law, but it's going to happen. Your bytes will be held hostage no more.

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