Legalmatter

By: Brian J. Meli

A lot of ink was spilled last week over the U.S. District Court in Washington D.C. striking down the FCC’s Open Internet rules, better known by their catchier nom de plume: “net neutrality.” While there’s been no lack of coverage on the ruling, or prognostication on what it may mean for the future of the Internet, I’m inclined to add my own voice to the chorus; if for no other reason than to provide what I see as some needed perspective on the topic. If, in the process, I talk some of the digital doomsdayers back from the ledge a few steps, so be it.

I think it’s helpful first to take a quick look back at how we got to this point, and ask ourselves why we’re even talking about net neutrality in the first place. Why is it something we’re so afraid to lose? And if it’s so important, why have we been taking it for granted until now?

The net-net of net neutrality

What net neutrality is and why you should care: technically speaking, it’s the regulatory principle embodied by the FCC’s Open Internet Order, which mandates that all internet traffic must be treated equally by internet service providers (ISPs)—a.k.a. the gate keepers of all things online—in an effort to ensure open competition and competitive fair play online. (If this sounds like a job more suited to Federal Trade Commission oversight, more on that in a moment).

The rules were struck down largely because the court found the FCC lacked the authority to regulate broadband providers due to their classification as information service providers, rather than telecommunications service providers. This is irony at its best, since it was the FCC itself that developed this classification system back in 1996. If you’re interested in delving deeper into the subtleties of the distinction, the ruling can be found here in its entirety.

By striking down the Open Internet rules, the fear among digital content consumers and producers alike is that the Verizons, Comcasts and AT&Ts of the world will enter into exclusivity or preferred partnership deals with the Googles, the Apples and the Netlfix of the world, limiting consumer options and making it harder for Internet startups to compete with the big boys. The potential parade of miserables range from reduced upstream/downstream speeds for non-preferred sites, to subscribers being charged extra fees for the right to access non-sponsored providers. If you’ve ever ordered a Coke at a fast food restaurant and been asked if Pepsi’s ok, or paid more for visiting an out-of-network primary care physician, you get the idea.

The ultimate nightmare scenario involves unchecked ISPs blocking certain sites altogether for refusing to pony up the necessary sponsorship fees. Or—following that line of thinking to its logical extreme—blocking them for more nefarious reasons. Granted, it’s not entirely far-fetched. Net neutrality is part of the lexicon in the first place because of sanctions the FCC levied on Comcast for blocking the peer-to-peer file-sharing site BitTorrent. The cable company argued that BitTorrent was syphoning too much bandwidth, slowing the access speeds of it customers, and it prevailed, but the larger question of how far ISPs can go to manipulate network traffic rages on.

For all the uproar over the dawn of a new, lawless Internet however, the fact is that net neutrality is a very new concept. The Open Internet rules, published here in all their glory, have only been in effect for the last three years, which means the Internet has been net non-neutral for about twenty-five; or approximately 80% of the time that you and I have been using it. Sure, most of that time the web was a shell of what it is today, but the fact is we’ve been living in a net non-neutral world far longer than in a neutral one.

What many net neutrality advocates sounding the panic alarm appear to be missing is that the district court’s ruling, while certainly a setback for the FCC and likely the beginning of the end of its Open Internet rules in their current form, is not a death knell for the concept of net neutrality.

The chairman of the FCC has gone on record stating that the agency will consider “all available options” to ensure neutrality on the Internet. Among those options (besides the most obvious one of appealing the ruling) is to simply reclassify the Internet as a telecom service, which to anyone who’s ever paid their Internet and phone bill together, seems like a no-brainer. Another is to simply revise the rules to make them less restrictive. The district court didn’t say the FCC couldn’t regulate ISPs at all, or even pass rules to encourage net neutrality; only that the Open Internet rules as they currently exist overreach the agency’s authority. Barring that, there is always the possibility of congressional action. The current climate of partisan gridlock aside, it’s an issue very much on the radar of lawmakers.   

So if you’re clutching your laptop a little tighter as you consider the disquieting prospect of a post-apoclayptic future in which the Internet is a digital feudal system ruled by 21st century robber barons, you can loosen up a little. Could last week’s ruling lead to price increases for Mr. and Mrs. Joe Websurfer? Or alter the speeds of the e-commerce site you’re running out of your spare bedroom? Sure. The business models for monetizing web traffic and distributing digital content are in a constant state of flux, and there’s no telling what those models will look like in the next year, let alone over the next five to ten. But it’s just as possible that the opposite could be true. Prices could fall and access and innovation could increase due to the more efficient use of bandwidth and cost-effective delivery of content. The history of the Internet’s evolution is filled with examples of legal rulings that have unexpected and far-reaching implications.

Is neutrality the answer?

If nothing else, the topic of net neutrality is polarizing, with most people finding themselves squarely on one side or the other. But as with any overly contentious debate, it’s never a bad idea to stop and ask if its really necessary to have. By that I mean, is net neutrality truly the ideal we should be aspiring to? Or is there a better way to preserve Internet fairness in this age of do-everything online?

Neutrality implies disinterest, passivity and either an inability or an unwillingness to take a position. Are these really the qualities we want in our Internet? They’re certainly not qualities shared by the overwhelming majority of people using the Internet for work, play, or as a medium for individual expression. Is the goal therefore of maintaining an Internet where the ideal is the absence of self-interest truly a workable proposition?

According to FCC.gov, the agency’s intent is to ensure that “every American has access to open and robust high-speed Internet service” and that “no broadband provider unreasonably discriminate in transmitting lawful network traffic.” I have no arguments about the worthiness of that statement. But if equal treatment and non-discrimination is the goal, then perhaps ‘net equality’ is a better concept to rally the Internet’s citizens around. Equal Internet rights for every man, woman, child and legal entity booting up and plugging in.

Semantics aside, the differences between neutrality and equality are significant. Anyone who’s sat through high-school civics knows that the concept of equal rights offers the promise of equal opportunity, but not necessarily equal outcomes. In the online world you could say that means equal opportunity for eyeballs. And in a climate of net equality no IP address could be favored over any other based on who owns it, its country of origin, the type of content it carries, or the amount of bandwidth it requires. All citizens of the Internet would be given the same equal chance to connect their message to their audience.

The only thing that would separate online success from failure would be the Internet itself. The greatest beneficiaries of the Internet’s most valuable assets (in fact, the very things that makes it a viable medium in the first place), it’s users, would determine the winners and losers based on which sites they most frequented. This shouldn’t sound revolutionary because it’s not, unless you regard the concepts of scarcity and supply and demand as novel. Just as media dollars gravitate to content providers who offer the most readers, viewers or subscribers, the Internet would allocate its scarce resources based on user demand, ensuring those resources are put to their most productive use. What could be fairer than that?

If a content provider is willing to invest in a strategic alliance or a partnership with an ISP in order to increase it’s user base and/or gain a competitive advantage, there’s nothing inherently wrong with that; unless of course it limits consumer choice to a degree that constitutes anti-competitive behavior. And who decides that? (Hint: not the FCC) That job would fall to the folks whose job it is to prosecute such illegal activity. The FTC, the DOJ and states attorney generals would serve as the arbiters of anti-competitiveness on the Internet, the same way they do off of it. If, say, Verizon and Amazon entered into an agreement to prevent online shopping startups from using Verizon’s network, then you likely have a clear cut case of collusion, and we have anti-trust laws in place to deal with that.

If the FCC wants to flex its regulatory muscle constructively, it can pass rules mandating minimum speed standards, below which no website may drop, no matter how little traffic it’s getting. The FCC is perfectly suited for enforcing a minimum service standard, and it’s the type of rule that would likely survive judicial scrutiny.

An Internet without equal 

The Internet is a unique place in that it’s the only form of mass media that even approaches the concept of message equality. When it comes to all voices, large and small, having an equal opportunity to be heard, it simply has no equal. Television doesn’t come close. Quick, name your favorite public access TV show (Wayne’s World doesn’t count). If you’re producing your own original programming these days you’re featuring it on YouTube, end of story. Print media? (if there is such a thing anymore). Good luck getting equal prominence with the likes of Krugman, Woodward, and Dowd. A blog is probably the better bet. Want to broadcast your own radio show? No problem. All you have to do is reserve some public airtime and start broadcasting your message to every listener working the third shift within a thirty mile radius of your antennae. Or you could create a podcast and have instant access to 2 billion people around the world.

You get the point. The Internet is already the great communications equalizer. It’s leveled the playing field like nothing that’s come before. None of this is news to anyone. The net neutrality debate is just forcing us to start thinking about it that way again.

Another concept that certainly isn’t new is the Internet as a superhighway. And many of those who decry last week’s court ruling claim it will turn that highway into a digital toll road. That’s a fair criticism. But are tolls an unavoidable consequence of a highway whose traffic has more than quintupled since 2000, and which according to the National Science Foundation will have 5 billion travelers by 2020? Today’s Internet, by comparison, will look quaint.

As simple as it may be to think about the Internet as a highway, it is not a digital public works project. It isn’t owned or operated by a sovereign state—ours or anyone else’s. If that were the case the idea of tolls might be more palatable; perhaps viewed as the equivalent of an infrastructure tax subsidy.

This is what makes the net neutrality argument such a difficult one. The Internet isn’t property in the traditional sense—private or public. No one owns it, and yet it belongs to everyone. You could say the Internet is a bit like a capital market, in that it is the sum total of its participants. If you’re an investor, you are the market. If you have a website, use social media, or stream TV shows, you are the Internet. And like the Internet, markets have gatekeepers. You can’t pick up the phone and dial 1-800-NYSE to buy a hundred shares of Apple. You must go through a broker. But if your stockbroker doesn’t offer certain investment vehicles, or allow you to make certain trades, you find another one. The same is true of Internet brokers. It’s a valid concern that there are so few ISPs to choose from today, but consumer demand will motivate ISPs to deliver the product and service offerings their customers want. And if they don’t, it will spawn innovation that will either replace or circumvent them. Nothing is safe from the equalizing forces of the Internet, not even the companies that grant us access to it. 

The point is the Internet has always been about equality, and likely always will be, whether the FCC has rules that say it’s so or not. Access equality is what the FCC is fighting to maintain, and what users are so afraid of losing. And that’s a worthwhile goal, no matter what you think of the Open Internet rules. Ordinary people want, at least in theory, the same opportunities to invest in the Internet that the institutions get. They want the same chance to have their voices heard as the Huffington Post and WSJ.com (I want this article to get the same amount of views as CNET’s). They want the same ability to distribute their products and services that Amazon and Netflix enjoy. They don’t expect to achieve equal success, but they want to know it’s possible. They deserve that. Fortunately, I don’t think last week’s court decision will do anything to dampen that possibility. 

The content of this blog is intended for informational purposes only. The information provided in this blog is not intended to and does not constitute legal advice, and your use of this blog does not create an attorney-client relationship between you and The Law Firm of Brian J. Meli. Under the rules of certain jurisdictions, the material included in this blog may constitute attorney advertising. Prior results do not guarantee a similar outcome. Every case is different and the results obtained in your case may be different.