Net Neutrality: The Aftermath of the Verizon v. FCC Decision

By Peter Bernstein January 17, 2014

It is hard to believe that it was early this week that the D.C. Circuit Court of Appeals struck down the Federal Communications Commission (FCC) Open Internet Order regime, thereby throwing “Net Neutrality” into the proverbial crocked hat. Other than the interest in President Obama’s speech today on his ideas of how to reform government surveillance rules and practices in the wake of the Snowden revelations, there is little else on the minds of tech industry observers.  Rightfully so! The stakes regarding both are so large it is difficult to get one’s arms around them.

As this crazy week comes to a close, it seems only appropriate to reflect on the week that was in the aftermath of the net neutrality decision. Judging from my inbox which filled with emails from all corners of the tech universe opining that the decision is either the greatest thing since the invention of the Internet (if not God’s creation of the world in six days before he rested) to those who feel like this is “Apocalypse Now!”  Just watching the commentary world go by has been fun. In fact, our own site had a nice blog from Peter Radizeski and an article that has occupied the center stage of TechZone360.com’s home page by contributor Ed Weinberg entitled, “Are 'Struck Down' Net Neutrality Laws Good or Bad?

I have also been following with tremendous fascination the comments on several groups that I follow, where FCC guru’s have been battling it out over whether the Judge interpreted the law correctly, what should be done next, and even engaged in some heated debates over whose history is revisionist dating back to Alexander Graham Bell.

With all of that as prolog there was a sentence at the end of a New York Times, Op-Ed piece today. “Back to the Digital Drawing Board,” by noted industry expert and now visiting Harvard Law School professor Susan Crawford, whose work I have followed for years, that got the juices flowing.  TGIF.

High-speed Internet access isn’t a luxury; it is basic infrastructure, like electricity, clean water and a functioning street grid, that is essential for the free market to function. The F.C.C. can show its strength by having the guts to change its mind.

First, let me say that Ms. Crawford did an excellent summation of the issues. Second, for those not familiar with the decision details, the “change your mind” citation is to the FCC reclassifying the contested services as common carriage as a means to get out of the legalistic mess it created and now has to help fix.

Third, as much as I admire Ms. Crawford, she did not go back far enough in her recitation of the history. Yes, in this instance the alleged crime was committed in 2002 under the Michael K. Powell regime at the commission.  However, as I noted in my article, the problem goes much farther back to the Computer Inquiries that first started to percolate at the FCC in the late 1960s before the first one popped at the start of the next decade.  And, therein lays the rub.

Image via Shutterstock

I will put this in lay terms. The FCC in those orders looked at the world and saw that computer networking was going to explode and unlike telecommunications it should not be regulated. The challenge then, which in actuality no longer is relevant (as I will explain) was how to draw a bright line between common carriage, i.e., rated-of-return regulated utility telecom and emerging “Information Services.”  The FCC was rightfully concerned about the need to draw the line because of the fears that the dominant telecom carriers would use access and pricing to discriminate in the market against competitors or those who they felt they would like to compete against at that same time it allowed them to compete unregulated in the value-added/computer networking/information services arenas.

It has taken roughly four decades, and the court finally has cast a bright light on the fact that the drawing of bright lines, in this case “reclassification”, is putting a finger in the dyke. The reality of today’s world is that the public switched telephone network (PSTN) in the U.S. and elsewhere, is on its death bed. For lack of a better term, or at least to use one the average person can understand, the Internet is the communications utility of the future. While voice-over-IP (VoIP) penetration still remains relatively low in the U.S. despite things like triple-plays, TDM is dead and so should be the definition of common carriage.

In short, the effort to totally rewrite the Communications Act of 1934 that is just starting in the Congress, and which I have already deemed a tough sell no matter what they do, is our best hope. Reclassification makes no sense.

There I have said it, and it is worth repeating. My policy wonk friends are going to take issue with me, but reclassification makes no sense. It is a fool’s paradise that based on technologic change would have to be revisited before the proverbial ink was dry.

What the U.S. needs is a national broadband policy that starts fresh rather than continually tries to graft short-term solutions on a set of laws and regulations that are obsolete at best, and only confuse rather than clarify things for those seeking to innovate and invest.

Crawford is correct that access to broadband is not a luxury. I would go further and say that every citizen should have a right, to paraphrase the language in the 1934 Act, to state-of-the-art broadband communications at reasonable rates.

I have made this argument many times in many places over the last four decades, and as my previous article articulates have even a few suggestions on how to move ahead. These happen to include my view that current fixed network providers, cable and telecom, should in the national interest divest their outside plant. The goal would be creation of a one-pipe, not dumb pipe, utility—jurisdictional issues to be settled as this would play out—that everyone could play on.  This is another subject for another day.

Back to the situation at hand, and complicating my remedy above just a bit, is that the difference between now and then is that we are no longer talking about “infrastructure.” Instead we should be dealing with what I have called “Infostructure”—the virtual as well as the physical networks that are the lifeblood of a digital world and key to economic vitality.

The bifurcated attempts to somehow deem one part of that infostructure regulated and the other competitive is at odds with where we are with technology today and certainly where we are going. Real guts would be for the FCC to not go for a quick fix which itself will become a long one because it will be tied up in court proceedings for years, but to work on the problem with a totally fresh perspective, i.e. forget about the past. From everything I have seen observers regardless of their interests and points of view can’t seem to see the forest because of the trees. This is unfortunate, especially since the stakes are very high and heading higher.

The optimist in me hopes this can happen.  The pessimist who started in the industry in the 1970’s and watched radical reform of the already obsolete 1934 Act die and be replaced with the non-reform supposed reforms of 1996, however, certainly has my attention.

Have a nice weekend. 




Edited by Alisen Downey
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