Sometimes the conventional wisdom turns
out to be correct. As we observed
after the oral argument in September, the Court seemed likely to approve
the FCC’s general assertion of authority over broadband providers under one provision of the
Communications Act, while reversing the no blocking and non-discrimination
rules – the actual important part of Network Neutrality – as contradicting
other statutory language. As it turned out, that’s what happened.
The result creates a bizarre set of
contradictions within the Court’s decision. On the one hand, the majority of the court finds that the FCC
properly found that the current openness of the Internet is critically
important to protecting subscribers and fostering innovation (pages 33-44). On
the other hand, the Court found that because the FCC insists on classifying all
broadband service as a Title I “Information Service” rather than as a Title II
“Telecommunications Service,” the Commission is powerless to act on these
findings (pages 45-62). (For those unclear on the distinction between Title I
Information Service and title II Telecommunications Service, you can see this refresher here.)
The FCC now has confirmed “affirmative authority to enact measures encouraging
the deployment of broadband infrastructure” and “to promulgate rules governing
broadband providers’ treatment of Internet traffic,” provided the FCC allows
broadband providers to offer preferential treatment to some and block others.
To illustrate with some examples,
the FCC could, conceivably, decide that AT&T’s current “sponsored data
program” discourages broadband use, hampers innovation or otherwise
frustrates the goals of ensuring rapid deployment of “advanced
telecommunications capabilities to all Americans,” and could order AT&T to
stop or modify the program accordingly. But the FCC cannot set a rule in
advance that would prevent AT&T from experimenting with such deals. The FCC
can require Verizon to negotiate
peering with Cogent or could require broadband providers to offer interconnection
to things like Netflix’s
content delivery network under rules similar
to the data roaming rules the D.C. Circuit approved last summer, but it
cannot require that Verizon complete a call from Magic Jack to a Digital Voice
How Did We Get To This Result That Makes No Sense?
As the Court makes clear, and as
Public Knowledge has consistently warned, this confusing and contradictory
result – at once overly broad and severely limited – is a contradiction of the
FCC’s own making. As the Court recounts in painstaking detail, the FCC used to
sensibly treat the business of moving bits as a Title II telecommunications
service (pages 7-10). Then the FCC changed its mind and classified broadband
access as a Title I “Information Service.” “Despite calls to revisit these
classification orders,” observed the Court, “the Commission has yet to overrule
In other words, the FCC has a
choice (and still does) whether to put broadband in the Title I “Information
Services” box or the Title II “Phone Services/Telecommunications” box. Once you
put something in the “Information Service” box, you cannot treat it as if it
were in the “Phone Services/Telecommunications” box. The FCC can always decide which
box to use, and can always change its mind about whether something
belongs in the Title I box or the Title II box. But it can’t pretend something
in the Title I box is in the Title II box.
While I don’t necessarily agree
that this is the right way (or even the logical way) to read the statute, it
does have a certain consistency of appeal. “FCC,” the Court says, “stop trying
to be so clever and do your job. Either broadband providers are like cable
operators, picking and choosing what content and what applications to offer
users in whatever bundles or under whatever conditions they please; or they are
like phone systems that offer to complete a phone call to anyone at the other
end of the ten-digit phone number. But they can’t be both at the same time.
Make your choice and live with the consequences.”
Net Neutrality As It Exists Right Now.
So what’s the state of the world at
the end of the day yesterday? The FCC’s rules requiring broadband providers to
disclose their network management practices remain intact and in force.
Providers are free to strike whatever deals they want or block whoever they
want – a situation the Court found does indeed endanger the “virtuous cycle of
innovation” that has powered the Internet until now. Unless the FCC
reclassifies broadband access as Title II telecommunications services, however,
the FCC cannot really do anything about it directly.
This doesn’t make the FCC entirely
helpless. But it does mean that the best the FCC can hope for, absent
reclassifying broadband as Title II, is possibly a sort of “Net
Neutrality-lite” that looks remarkably like what we had in 2008 — a complaint
process based on Open Internet principles. As folks may recall, no one
particularly liked that because it created all sorts of uncertainty as to what
conduct would or wouldn’t be allowed and how far the FCC’s authority would
reach. Every new business model becomes the possible subject of a complaint,
and every complaint becomes a crap shoot because the FCC cannot actually impose
But apparently, “certainty” is for
wussies in Telecom-ville. Welcome to the dynamic crazy town of Information
Services Land! Who knows what anyone will do, who it might hurt, or what the
FCC might do in response? Let the wackiness ensue and the good times roll.
Unless, as the Court suggests, the
FCC would like to revisit its classification decision.