The following is a repost of a column I recently wrote for the Cincinnati USA Regional Chamber
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You’re to think of the recent “net neutrality” ruling as freedom through regulation. The Federal Communications Commission, or FCC, a government regulatory agency regulated and regulators, as you know, will regulate.
Yes. Freedom through regulation is an oxymoron.
The FCC recently ruled 3-2, along political party lines, ISP’s, or Internet service providers, like AT&T, Time Warner, Comcast or Verizon, cannot block Internet traffic, slow it down or charge content companies like Netflix or Hulu for faster access to its customers. All legal content and web traffic must be treated equally.
“The Internet is simply too important to allow broadband providers to be the ones making the rules,” said FCC Chairman Tom Wheeler, appointed to his job by President Barack Obama. The President is a supporter of the FCC’s recent decision.
The ISP’s are generally against net neutrality, arguing large content companies, like Netflix, should pay for the high levels of bandwidth they use. The large content companies, like Amazon or Yahoo, enjoy things just the way they are and support net neutrality.
As with most things, it’s the details where it gets confusing.
With its ruling, the FCC, decided to “fix” something few consider broken, with regulations that take hundreds and hundreds of pages to explain just eight pages of rules! Don’t believe me? CLICK HERE to read it (if you dare).
To make their decision the FCC went back to the Communication Act of 1934 (you read that correctly – 1934) and under the 81-year old law’s Title II, categorizes ISP’s as a “common-carrier” utility, just like the electric, gas or telephone companies you do business with. A common-carrier offers its services to the general public under license or authority provided by a regulatory body, in this case the FCC. The regulatory body has usually been granted ministerial authority by the legislation that created it. The Communications Act of 1934 created the FCC. The regulatory body, or FCC, may create, interpret, and enforce its regulations upon the common-carrier with independence and finality, as long as it acts within the bounds of the enabling legislation.
The ruling allows the FCC to impose a “general conduct” or “catch-all” provision too, giving the FCC the authority over anything it deems unreasonable on the Internet. If you’re a lawyer you know the word “reasonable” in any agreement or law opens its meaning up to debate and litigation.
The FCC ruling gives the agency new found power, as it allows the FCC to regulate not only your ISP provider, but also the Internet services you enjoy. Does this now allow the FCC to police the content you get from websites and determine if it’s “reasonable” or not? Time will be the judge of this.
Apple’s co-founder Steve Wozniak likes the FCC ruling saying the decision goes “a lot further than net neutrality. Title II regulation means oversight of bad behavior.” He said, “Such oversight should not be confused with meddling or controlling.”
Wozniak laments, “The Internet was so beautiful when it first came out. It seems hard to recall those times, given the proliferation of grime that populates it now.”
What about technologies not even thought about yet? Billionaire Mark Cuban, who made his money by selling his Broadcast.com to Yahoo for almost $6 billion in 1999, disagrees with Wozniak and the FCC’s decision saying, “Bottom line is that the future of the Internet is not watching movies. It’s apps we haven’t seen yet, and I prefer not to have the FCC as a consideration in their future. There is no way to account for how future FCC commissioners deal with these issues. They could approach it 180 degrees differently with every commission overhaul.”
The final FCC vote was 3-2, split along party lines. Republican Texas Senator Ted Cruz calls the ruling “Obamacare for the Internet,” saying the “revolutionary power” of the Internet owes its development to the lack of government regulation.
The other side saw Democratic President Obama calling on the FCC to develop “the strongest possible rules” in order to protect consumers from ISP’s and their efforts to control online speeds.
So what does this all mean for you?
Very little in the short term.
- The FCC’s net neutrality decision will be challenged in court; some saying it will eventually go to the U.S. Supreme Court. Part of the FCC’s reasoning in its decision are examples of ISP’s having it “in” for companies like Netflix, in one instance Comcast, which owns NBC Universal, allegedly slowing down Netflix streaming to its customers, even though evidence may show the problems were actually caused by Netflix.
- As challenges are brought to trial, the winners will be lawyers who are laying in wait to cash in on years of legal fees. FCC Commissioner Mike O’Rielly said, “If you’re looking for a lucrative business, you should be a telecom lawyer.”
- And what about your ISP? The new “common-carrier” designation by the FCC means your Internet service is now subject to state and local fees, like the taxes you now pay on your electric or telephone bills. The FCC’s new net neutrality regulations mean you will pay more for your Internet service. Dissenting FCC Commissioner Ajit Pai said, “More new taxes are coming. It’s just a matter of when.” Pai feels Title II regulations explicitly opens the door to billions of dollars in new fees and taxes on broadband by subjecting them to telephone style taxes under the Universal Service Fund. Pai is a former attorney for Verizon.
The lesson here: regulators will always regulate and you will always pay.
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