PublishedSeptember 12, 2012

Open Internet Rights in America Being Tested in Court

Earlier this week, the FCC filed a Court brief in defense of its open Internet rule that has been challenged by Verizon and one small wireless carrier, Metro PCS.   Verizon claims to support the Internet remaining “an unrestricted and open platform, where people can access the lawful content, services and applications of their choice.”   It simply objects to an FCC rule enforcing that same ideal on behalf of the end users and edge providers who must depend on Verizon for that access every day.

Congress created the FCC to be the primary authority over interstate “communication by wire or radio”, which in plain English covers broadband Internet access. Whether or not the FCC currently sub-classifies broadband as telecommunications subject to Title II common carrier regulation or as an information service (subject to less regulation), is an administrative agency call.  Congress could not possibly have addressed broadband access in 1995-early 1996 in the Telecom Act.   It did not yet exist.  However, the statute is general enough to cover it as a form of “communications by wire or radio” before you even reach the more specific mandates on “advanced services”, competition, and radio licensing.

Verizon, on the other hand, would have the FCC, the Court and Congress believe that “broadband” does not actually include telecommunications at all. Rather, they argue it is a wholly new part of the new Internet ecosystem that sprang up only this century from nothing – as the most popular edge providers did, be they websites, applications or search engines.

On the commercial marketing side, however, the Verizon story is a bit different. The “It’s the Network” campaign of several years ago underscores the telecom giant’s appreciation of – and willingness to flaunt – its natural advantage.  Its legacy monopoly of network telecommunications facilities, now upgraded with fiber optics and digital electronics, are unmatched, enviable and even critical to our economy and public welfare. But they are a very different physical and market presence than the cavalcade of competitive information services that flow over the network infrastructure.

Despite the FCC’s non-binding Internet policy statement of 2005 that first established open internet principles in terms of consumer rights, the agency encountered instances of Internet access providers blocking lawful content and discriminating against unaffiliated competing services by throttling or otherwise degrading traffic flows.

Ironically, if Internet access providers like Verizon had not been so successful at M&A and consolidation while also winning deregulation from the FCC, things might be different. There might have been enough surviving broadband access competitors to leave the FCC less concerned about protecting the rights of their end users and edge providers. But broadband access competition has failed beyond duopoly for most American households and small businesses. So now the dominant companies try to distract and confuse policymakers and the media, saying they are actually part of the “Internet ecosystem” that’s so vibrantly competitive.

Smart folks, who have studied the statutes and are paying attention to market realities, know how fundamental the FCC’s open Internet rule is – to the agency’s own statutory mandates, to the smooth functioning of that ecosystem, and to the economic growth in this country.

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