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Tag: Net Neutrality

  • AT&T, DirecTV Merger Reportedly Nearing Approval

    AT&T, DirecTV Merger Reportedly Nearing Approval

    It appears to be smooth sailing for AT&T in its acquisition of DirecTV, as the merger has reportedly cleared one major hurdle and is about to clear the last.

    Reuters reports that the Department of Justice has already wrapped up its review of the deal. Bloomberg says that the DoJ imposed no conditions on the mega-merger.

    AT&T first agreed to acquire DirecTV for nearly $49 million last May.

    The DoJ’s job in merger reviews is to determine if the deals violate antitrust law – so it looks like AT&T and DirectTV are good on that front. Of course, the DoJ isn’t the only regulatory agency that the companies must assuage. They also have to worry about the Federal Communications Commission and its independent review of whether or not the deal serves the public interest.

    Reuters says that approval is coming very soon – as early as next week. It’s more likely that AT&T had to make concessions with the FCC.

    On June 29th, AT&T said it had had a talk with the FCC, wherein they discussed “the substantial, direct, and verifiable benefits that the AT&T/DIRECTV merger will deliver to tens of millions of consumers.”

    “We also discussed AT&T’s voluntary commitments, described in the record, which will provide the Commission with further assurance that the transaction will serve the public interest and deliver benefits to consumers.”

    Streaming video may play a part in said conditions. Netflix recently raised objections to the merger in its current form, saying that the deal “would result in a combined entity with increased incentive and ability to harm online video distributors and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses.”

    The merger would create the biggest pay-TV company in the country.

    It’s possible that AT&T will have to agree to some stipulations protecting online video companies.

    The AT&T/DirecTV deal won’t create the broadband-controlling monster that the Comcast/Time Warner Cable deal would’ve created. The FCC basically killed that deal, and Net Neutrality was a major concern.

  • Netflix Doesn’t Like the AT&T/DirecTV Merger

    Netflix Doesn’t Like the AT&T/DirecTV Merger

    If AT&T’s proposed merger of DirecTV is approved, it would create the largest pay-TV provider in the country.

    And according to Netflix, the merger in its current form is bad for everyone.

    The streaming company has written a letter to the Federal Communications Commission, urging it to reject the merger “as currently proposed.”

    “The proposed merger would make AT&T the largest MVPD in the country, and potentially lead to its becoming the largest ISP in the country as well. Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats, and will exacerbate the anticompetitive behavior in which AT&T has already engaged. Netflix urges the Commission to reject the merger as currently proposed,” said Netflix counsel Markham Erickson in the letter.

    “If approved by the Commission, this merger would result in a combined entity with increased incentive and ability to harm online video distributors (“OVDs”) and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses. Comcast’s withdrawal of its merger application means that, if approved, AT&T would become the nation’s largest multichannel video programming distributor (“MVPD”). After AT&T’s projected broadband investments, it could become the largest ISP as well. These two dynamics create a powerful incentive for AT&T to protect its investment in DIRECTV’s bundled programming by using its ability to harm OVDs to prevent or delay cord-cutting and cord-shaving.”

    Netflix argues that AT&T has already shows what this looks like.

    “AT&T already has a demonstrated ability to harm OVDs by leveraging its control over interconnection to degrade its own customers’ access to Netflix’s service. AT&T also has shown an interest in using data caps and usage-based pricing methods, which it can apply discriminatorily to advantage its own services. If AT&T is able to slow the development of the
    OVD industry, either by foreclosing access to broadband customers or imposing discriminatory data caps, AT&T would be able to preserve its market advantage by slowing or even reversing the shift toward competitive online video offering and away from bundled video/broadband offerings.”

    So, Netflix isn’t a fan of the merger in its current form – but what would make it happy?

    According to Ars Technica, “Netflix described the conditions it wants imposed upon the merger in a submission last September. In addition to a permanent net neutrality commitment, Netflix asked the FCC to prevent a combined AT&T/DirecTV from charging interconnection fees to Netflix and other content providers. Moreover, ‘the combined entity should be prohibited from excepting its own affiliated services from any data cap applicable to any of its services (whether fixed or mobile), Netflix wrote.”

    The FCC just got done killing Comcast’s proposed Time Warner Cable takeover. Netflix and other streaming services like it played a big part in why the FCC hated that deal.

    “Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services,” said FCC chairman Tom Wheeler of the Comcast/TWC merger.

    AT&T and DirecTV agreed to a $48.5 billion deal last May.

  • Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    By now you’ve probably heard that Comcast has abandoned its push to acquire Time Warner Cable, due to looming concerns that both the Department of Justice’s antitrust division and the Federal Communications Commission were poised to recommend it blocked.

    “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away,” said Comcast CEO Brian Roberts.

    Now, both the DoJ and the FCC have issued official statements on the death of the merger, and they both sign a similar tune. A main concern for both the DoJ and the FCC, apparently, was Netflix (& other streaming services, of course) and Net Neutrality.

    Take a look at FCC Chairman Tom Wheeler’s statement (bolding ours):

    Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services. I am proud of our close working relationship throughout the review process with the Antitrust Division of the Department of Justice. Our collaboration provided both agencies with a deeper understanding of the important issues of innovation and competition that the proposed transaction raised.

    And here’s what Attorney General Eric Holder had to say:

    The companies’ decision to abandon this deal is the best outcome for American consumers. The Antitrust Division of the United States Department of Justice has demonstrated, time and again, that it can and will defend the interests of the American consumer no matter the complexity of the issue or the size of the opponent. This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world. I commend the Antitrust attorneys and investigators whose outstanding work led to this outcome, and I know that the Department of Justice will continue to fight for fair access and free competition in every industry and every market.

    According to the Wall Street Journal, Holder had already authorized the DoJ antitrust officials to file a lawsuit against the deal.

    Netflix was vehemently against the merger from the beginning, as the streaming company was forced to pay Comcast a fee for access.

    Netflix said that the merger would’ve “set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests.”

    It appears the feds agreed.

  • FCC Net Neutrality Rules Released, Blasted By Commissioners

    FCC Net Neutrality Rules Released, Blasted By Commissioners

    The Federal Communications Commission has released its new net neutrality rules after announcing them two weeks ago. The rules followed a call from President Obama in November to reclassify Internet service under Title II of the Telecommunications Act, which would make it a utility. The new rules call for broadband to be considered a telecommunications service, and providers are to be regulated.

    This prompted a wide array of responses from various parties of interest, including a press release written in morse code from Verizon.

    The new release caused the FCC site to crash, and as of the time of this writing, it’s displaying a message that says:

    The normal FCC website is temporarily unavailable due to technical difficulties. We are working to restore the full FCC website back to normal as soon as possible.

    Te PDF, however, is viewable here (via Re/code):

    FCC-15-24A1

    The site seems to be going on and off, so if you keep trying, you might be able to bring it up.

    Since the release of the document, a policy summary of FCC Commissioner Ajit Pai’s “statement dissenting from the FCC’s decision to adopt President Obama’s plan to regulate the Internet” has been released. Here’s what it says:

    For twenty years, there’s been a bipartisan consensus in favor of a free and open Internet—one unfettered by government regulation. So why is the FCC turning its back on Internet freedom? It is flip-flopping for one reason and one reason alone. President Obama told it to do so.

    The Commission’s decision to adopt President Obama’s plan marks a monumental shift toward government control of the Internet. It gives the FCC the power to micromanage virtually every aspect of how the Internet works. It’s an overreach that will let a Washington bureaucracy, and not the American people, decide the future of the online world.

    One facet of that control is rate regulation. For the first time, the FCC will regulate the rates that Internet service providers may charge and will set a price of zero for certain commercial agreements.

    The Commission can also outlaw pro-consumer service plans.If you like your current service plan, you should be able to keep your current service plan. The FCC shouldn’t take it away from you.

    Consumers should expect their broadband bills to go up. The plan explicitly opens the door to billions of dollars in new taxes on broadband. One estimate puts the total at $11 billion a year.

    Consumers’ broadband speeds will be slower. Compare the broadband market in the U.S. to that in Europe, where broadband is generally regulated as a public utility. Today, 82% of Americans have access to 25 Mbps broadband speeds. Only 54% of Europeans do. Moreover, in the U.S., average mobile speeds are 30% faster than they are in Western Europe.

    This plan will reduce competition and drive smaller broadband providers out of business. That’s why the plan is opposed by the country’s smallest private competitors and many municipal broadband providers. Monopoly rules from a monopoly era will move us toward a monopoly.

    The Internet is not broken. We do not need President Obama’s plan to “fix it.”

    The plan in front of us today was not formulated at the FCC through a transparent notice-and-comment rulemaking process. As The Wall Street Journal reports, it was developed through “an unusual, secretive effort inside the White House.” Indeed, White House officials, according to the Journal, functioned as a “parallel version of the FCC.” Their work led to the President’s announcement in November of his plan for Internet regulation, a plan which “blindsided” the FCC and “swept aside . . . months of work by [Chairman] Wheeler toward a compromise.”

    The plan has glaring legal flaws that are sure to keep the Commission mired in litigation for a long, long time.

    A legal summary of Pai’s statement has also been released. Here’s what that one says:

    In adopting President Obama’s plan to regulate the Internet, the FCC violated the procedural requirements of the Administrative Procedure Act (APA).

    The FCC never proposed the rules being adopted, violating the APA’s notice-and-comment requirement. In last year’s Notice, the FCC proposed rules under section 706 of the Telecommunications Act. Every single proposal and every single tentative conclusion in last year’s Notice was tailored to avoid reclassifying broadband as a Title II service. Yet that’s exactly what the FCC does in this Order.

    No one could have anticipated the number or nature of the hoops the Order would jump through to reclassify broadband. Nor could anyone have anticipated the Order’s 49 separate forbearance decisions; its decision to subject interconnection to Title II as a “component” of broadband Internet access service; its decision to amend agency rules regarding mobile broadband; or its adoption of an omnivorous “Internet conduct” standard, the scope of which remains uncertain.

    The FCC cannot rely on President Obama’s YouTube directive to the agency cure these deficiencies. The President’s video was not approved by FCC commissioners, published in the Federal Register, or subject to public comment.

    President Obama’s plan to regulate the Internet also violates the Communications Act.

    Neither the text of the Act nor FCC precedent allows the agency to reclassify broadband Internet access service as a Title II telecommunications service. In 1996, President Clinton and Congress decided that “any” service that “provides access to the Internet” would be an information service. In turn, the FCC has never classified an Internet Service Provider as a telecommunications carrier. Instead, the FCC has determined each and every time since the Clinton Administration’s Stevens Report that Internet access always involves more than meretransmission—and thus is an information service.

    Section 332 of the Communications Act independently bars the FCC from reclassifying mobile broadband Internet access service as a Title II telecommunications service.

    The text, structure, and Congressional intent all make clear that section 706 of the Telecommunications Act does not give the FCC any independent authority.

    The Order invents an entirely new method of forbearance analysis that doesn’t adhere to the forbearance criteria in the Act or the FCC’s precedents.

    Pai appeared on Fox business to talk about this more:

    The FCC has also released a dissenting statement from Commissioner Michael O’Reilly. HIs is seventeen pages long, so I’ll direct you to his tweets, which include a link.

    Some words from FCC Chairman Tom Wheeler:

    So what’s everybody else saying about it all? Here’s a quick glance at Twitter:




  • Did The FCC Get Net Neutrality Right?

    Did The FCC Get Net Neutrality Right?

    As you may have heard, the FCC announced that it has set rules on net neutrality and an open Internet, which it says “will protect free expression and innovation on the Internet and promote investment in the nation’s broadband networks.”

    Do you think they got it right or do there need to be changes? Let us know what you think.

    Back in November, President Obama urged the FCC to reclassify Internet service under Title II of the Telecommunications Act, which would make it a utility, and the FCC has done so. Broadband is considered a telecommunications service, and providers are to be regulated.

    The FCC says in its announcement:

    The FCC has long been committed to protecting and promoting an Internet that nurtures freedom of speech and expression, supports innovation and commerce, and incentivizes expansion and investment by America’s broadband providers. But the agency’s attempts to implement enforceable, sustainable rules to protect the Open Internet have been twice struck down by the courts.

    Today, the Commission—once and for all—enacts strong, sustainable rules, grounded in multiple sources of legal authority, to ensure that Americans reap the economic, social, and civic benefits of an Open Internet today and into the future. These new rules are guided by three principles: America’s broadband networks must be fast, fair and open—principles shared by the overwhelming majority of the nearly 4 million commenters who participated in the FCC’s Open Internet proceeding.

    Absent action by the FCC, Internet openness is at risk, as recognized by the very court that struck down the FCC’s 2010 Open Internet rules last year in Verizon v. FCC.

    Broadband providers have economic incentives that “represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment,” as affirmed by the U.S. Court of Appeals for the District of Columbia. The court upheld the Commission’s finding that Internet openness drives a “virtuous cycle” in which innovations at the edges of the network enhance consumer demand, leading to expanded investments in broadband infrastructure that, in turn, spark new innovations at the edge.

    However, the court observed that nearly 15 years ago, the Commission constrained its ability to protect against threats to the open Internet by a regulatory classification of broadband that precluded use of statutory protections that historically ensured the openness of telephone networks. The Order finds that the nature of broadband Internet access service has not only changed since that initial classification decision, but that broadband providers have even more incentives to interfere with Internet openness today. To respond to this changed landscape, the new Open Internet Order restores the FCC’s legal authority to fully address threats to openness on today’s networks by following a template for sustainability laid out in the D.C. Circuit Opinion itself, including reclassification of broadband Internet access as a telecommunications service under Title II of the Communications Act.

    With a firm legal foundation established, the Order sets three “bright-line” rules of the road for behavior known to harm the Open Internet, adopts an additional, flexible standard to future-proof Internet openness rules, and protects mobile broadband users with the full array of Open Internet rules. It does so while preserving incentives for investment and innovation by broadband providers by affording them an even more tailored version of the light-touch regulatory treatment that fostered tremendous growth in the mobile wireless industry.

    The new rules apply to both fixed and mobile broadband, and prohibit broadband providers from blocking access to legal content, apps, services, or non-harmful devices. They also prohibit providers from impairing or degrading lawful internet traffic on the basis of content, apps, services, or non-harmful devices. Providers may not favor some lawful Internet traffic over other lawful Internet traffic “in exchange for consideration of any kind”. In other words, no fast lanes. ISPs are banned from prioritizing content and services of affiliates.

    You can find the full announcement here (PDF).

    The matter is far from settled. Republicans in Congress have reportedly proposed legislation to throw out the Title II restrictions on providers.

    Here’s what people are saying on Twitter:




    Naturally, plenty of companies are weighing in with their comments. Here are Verizon’s:

    If you click the link for the “translated’ version, you’re taken to a news release dated for 1934 in a font that looks like this:

    You get the idea.

    AT&T Senior Executive Vice President Jim Cicconi said:

    To be sure, one must have principles and a philosophy of government’s proper role. But a democracy cannot function when either side lapses into rigidity. Or worse, when political advantage becomes more important than the nation’s best interest.

    In our little world, and in my decades of interaction with it, I’ve felt, and still feel, that the FCC has tried to stay focused on solving problems and avoided turning issues into dogma. Every chairman in my memory, including the current one, has faced political stampedes of one sort or another. Yet the agency has always tried to find a middle ground and a consensus win. They’ve understood that a win, unlike a fight, is the product of reaching out to both sides, and working in a bipartisan way to find a solution. A win is the product of compromise, thoughtful policy, and a genuine desire to find the answer to a complex set of issues.

    We had such a situation – and a bipartisan win – in the 2010 net neutrality rule. Unfortunately, this was undone by a court decision, facing us with the same situation a second time. Today, an Administration and an FCC that appeared headed toward another bipartisan win on net neutrality were driven instead to a partisan fight. The 3-2 FCC vote, along party lines, for sweeping new regulation of the Internet, is a rejection of the compromise win and an embrace, however reluctant, of the political fight. It’s unfortunate that this single issue, more than any other, has over the course of ten years caused a divisive spirit to spread to an agency that has long sought unanimity on significant long term issues, and generally found it. A 5-0 decision doesn’t leave a lot of room for either side to continue the argument, while a 3-2 decision, particularly on issues of such broad scope, is an invitation to revisiting the decision, over and over and over.

    Full statement here.

    Sprint’s response:

    Sprint has been a leader in supporting an open Internet and commends the FCC for its hard work in arriving at a thoughtful, measured approach on this important issue. We believe balanced net neutrality rules with a light regulatory touch will benefit consumers, while fostering mobile broadband competition, investment and innovation in the United States. We look forward to reviewing the FCC order and continuing to work with policymakers to ensure consumers benefit from an open Internet.

    Here’s the latest from T-Mobile:

    Netflix, which has been a very vocal member of the debate says:

    “The net neutrality debate is about who picks winners and losers online: Internet service providers or consumers. Today, the FCC settled it: Consumers win.

    Today’s order is a meaningful step towards ensuring ISPs cannot shift bad conduct upstream to where they interconnect with content providers like Netflix. Net neutrality rules are only as strong as their weakest link, and it’s incumbent on the FCC to ensure these interconnection points aren’t used to end-run the principles of an open Internet.

    Given the lack of competition among broadband providers, today’s other FCC decision preventing regulations that thwart local investment in new broadband infrastructure also is an important step toward ensuring greater consumer choice. These actions kick off a new era that puts the consumer, not litigious corporate giants, at the center of competition policy.”

    The ACLU says, “This is a victory for free speech, plain and simple. Americans use the internet not just to work and play, but to discuss politics and learn about the world around them. The FCC has a critical role to play in protecting citizens’ ability to see what they want and say what they want online, without interference. Title II provides the firmest possible foundation for such protections. We are still sifting through the full details of the new rules, but the main point is that the internet, the primary place where Americans exercise their right to free expression, remains open to all voices and points of view.”

    Mozilla says, “This is an important victory for the world’s largest public resource, the open Web. Net neutrality is a key aspect of enabling innovation from everywhere, and especially from new players and unexpected places. Net neutrality allows citizens and consumers to access new innovations and judge the merit for themselves. It allows individual citizens to make decisions, without gate-keepers who decide which possibilities can become real. Today’s net neutrality rules help us protect this open and innovative potential of the Internet.”

    The FCC received over 4 million public comments over the past year, which the commission used to help “shape” its rules.

    Do you consider the FCC’s rules to be a win for the Internet? Let us know.

    Image: FCC Chairman Tom Wheeler (Wikimedia Commons)

  • Revleap: Yelp’s Allegations Completely False, Unsubstantiated

    Last week, Yelp said it was “taking a stand against misleading ‘reputation management’ companies,” as it filed a lawsuit against a company called Revleap, which it said is a scam, and puts small businesses at risk because of the Yelp Consumer Alert program in addition to federal and state regulations.

    Yelp said has Revleap had operated under various names like Yelpdirector and Revpley, and “has spammed businesses with unsolicited messages claiming that they can get good reviews to stick and remove bad reviews.”

    The actual suit alleges trademark infringement, trademark dilution, unfair competition, cybersquatting, breach of contract, interference with contractual relations, and false advertising.

    We reached out to Revleap for comment, and the company said Yelp’s claims are “completely false and unsubstantiated.”

    Here’s the full statement we received:

    Since RevLeap’s inception as a platform for businesses to connect with their customers to gather feedback in a new way, we champion the freedom of speech and open internet. “The Open Internet” as described by the FCC calls for 1. Transparency, 2. No Blocking, and 3. No Unreasonable Discrimination.

    RevLeap services are legal in all aspects of the law, and we specialize in only legitimate reviews from real customers. Yelp has filed completely false and unsubstantiated claims against our company. We aim to decrease defamation and increase awareness of free speech for businesses. We level the playing field for everyone who uses the internet or reviews on any site.

    We believe the internet, business owners, and their customers benefit greatly from having an open internet. Any disruption of these principles like the Yelp “Filter” or described on Yelp’s website as “Recommendation Software” preys on businesses using the reviews as leverage as described in thousands of FTC complaints against Yelp from 2008-2014. Yelp’s Yelp Profile has over 10,000 1-Star Reviews from business owners, friends and family of business owners who have been hurt by Yelp and we hope through our services we can restore faith in the internet and reach a point of transparency with Yelp.

    Yelp has been talking about the “open Internet” itself. On Wednesday, the company released a blog post calling for people to express their support for Net Neutrality before the FCC votes on February 26, and saying that Yelp values users and works with other companies and organizations to “support adoption of the strongest Net Neutrality principles to protect the American Public.”

    Here’s an excerpt from that:

    Since Yelp’s inception as a platform to connect people with great local businesses around them, we have supported and relied on the principles of an open and free Internet in order to do business. These principles, which have become enshrined in the term “Net Neutrality,” provide that Internet Service Providers (ISPs) should treat all legal data and content equally, and not discriminate, throttle, or charge different rates depending on the nature of the site, platform or data being transmitted.

    Regarding Revleap, Yelp says business owners often fall for such “scams” and pay “dearly, both with their bank accounts and their online reputations.”

    You can see the full complaint here.

    Image via Yelp

  • Obama’s Net Neutrality Plan Criticized, Is Reportedly Being Considered By FCC

    Obama’s Net Neutrality Plan Criticized, Is Reportedly Being Considered By FCC

    Earlier this week, President Obama urged the FCC to reclassify Internet service under Title II of the Telecommunications Act. He said that ultimately, it’s their decision as they’re an independent agency, but added that four million people publicly commented, asking the agency to “make sure that consumers – not the cable company – gets to decide which sites they use.”

    Where do you stand on the issue? Let us know in the comments.

    The White House laid out a four-point plan for protecting net neutrality:

    In an article called “61% Oppose Federal Regulation of the Internet,” Rasmussen Reports says:

    Americans really like the online service they currently have and strongly oppose so-called “net neutrality” efforts that would allow the federal government to regulate the Internet.

    The latest Rasmussen Reports national telephone survey finds that just 26% of American Adults agree the Federal Communications Commission should regulate the Internet like it does radio and television. Sixty-one percent (61%) disagree and think the Internet should remain open without regulation and censorship. Thirteen percent (13%) are not sure.

    According to that, 19% believe more government regulation is the best way to protect Internet users and 56% think more free market competition is the best protection. 25% are undecided, it says.

    Republican Senator Ted Cruz wrote an opinion piece for The Washington Post on the subject under the title “Ted Cruz: Regulating the Internet threatens entrepreneurial freedom.”

    “The next generation of Internet-connected devices, apps and services will generate trillions of dollars of global economic growth in the years ahead. And Americans are perfectly poised to take maximum advantage — if the government doesn’t take those opportunities away in the form of crushing taxes, rules and regulations,’ wrote Cruz. “Yet the threats from Washington to stifle freedom, entrepreneurship and creativity online have never been greater. Washington politicians want the money, and they want more and more control over our speech.”

    He went on to discuss “four basic principles,” which he said should guide policy makers “in a bipartisan manner, to preserve America’s leadership role in developing the future of the Internet.”

    These include “abandon[ing] the idea of further taxing Internet access and sales,” “dismiss[ing] all plans to give nations hostile to human rights and democracy more influence over Internet policy,” “promoting growth in the technological sector,” and “recognizing that our constitutional rights are digital rights, too”.

    He also referred to the Internet as a haven for entrepreneurial freedom and “The American Dream 2.0”.

    Mark Cuban is also voicing opposition to Obama’s plan. When asked if he’s concerned about the potential for small businesses to be stifled by internet providers, he told Business Insider, “I’m more concerned the government will f— it up.”

    Asked if he was worried internet providers would hurt startups, he told them, “Hell no. Since when have incumbent companies been the mainstays for multiple generations? There will be so much competition from all the enhancements to wireless that incumbent ISPs will have to spent their time fighting cord cutting.”

    Cuban also tweeted additional thoughts at Chris Dixon:

    It’s worth noting that Cuban claims to have voted for Obama in ’08.

    According to a report from The Huffington Post, which contradicts an earlier one from The Washington Post, FCC Chairman Tom Wheeler is open to Obama’s plan, and that he “told a gathering of business representatives and public interest groups that he was taking the president’s comments under advisement and that he would need the groups’ support in the coming fight over net neutrality.”

    Obvoiusly there are a lot of opinions about how net neutrality should be handled. Here’s what others are saying:


    Do you think Obama’s plan is the right or wrong way to go? Share your thoughts in the comments.

    Image via YouTube

  • Cable Companies Shocked At Obama’s Neutrality Stance

    Cable companies are pulling together in response to President Obama’s “stunning” Net Neutrality stance.

    The president recently called for much greater government regulation on the internet as a common “utility”.

    Fred Campbell, former head of wireless communications at the FCC and now executive director of free market tech group Center for Boundless Innovation in Technology, weighed in. He said that applying extremes like Title II to the internet would create “legal uncertainty at home and encourage the efforts of totalitarian regimes abroad to tighten their control over the internet – the 21st Century’s mass media communications system.”

    Ted Cruz raised eyebrows when he posted this to Twitter shortly following the president’s remarks:

    The National Cable and Telecommunications Association, which represents cable companies including Comcast and Time Warner, said it was “stunned” by the president’s remarks.

    “The cable industry strongly supports an open internet, is building an open internet, and strongly believes that over-regulating the fastest growing technology in our history will not advance the cause of internet freedom,” said NCTA president Michael Powell. He is also the former chairman of the Federal Communications Commission (FCC).

    Powell added, “We are stunned the president would abandon the longstanding, bipartisan policy of lightly regulating the internet and [call] for extreme Title II regulation,”

    Lobby group Broadband for America said that Obama’s endorsement “of 1930’s era Title II classification would lead to unprecedented government interference in the internet, and would hurt consumers and innovation.”

    What do you think of Obama’s recent statements? Do you agree with the “stunned” cable companies or Obama himself?

  • Etsy Applauds Obama’s FCC Request On Open Internet

    Etsy Applauds Obama’s FCC Request On Open Internet

    President Obama announced on Monday that he’s asking the FCC to reclassify the Internet under Title II of the Telecommunications Act, which would essentially render it a utility.

    “In plain English, I’m asking them to recognize that for most Americans, the Internet has become an essential part of everyday communication and everyday life,” he said, noting that the FCC is an independent agency, and that ultimately, it’s their decision.

    You can read his whole statement and view video of him talking about it here.

    Many people and companies are commenting on Obama’s move, and Etsy, which gives independent artists a means of selling their work, put out a blog post applauding the President’s “strong stance” on the issue of the open Internet. Etsy’s Althea Erickson writes:

    We applaud the President’s strong stance on this issue, and urge the FCC to take action this year to protect the Internet and the millions of micro-businesses who depend on it to reach consumers.

    This morning, the President said what the Etsy community has been saying for months: there should not be a two-tiered Internet, where big companies pay for fast lanes, leaving the rest of us in the slow lane. We want the Internet to continue to be a level playing field, where businesses succeed based on the value of their products, not the depths of their pockets.

    Etsy has been championing net neutrality since last spring, and has submitted formal comments, met with the FCC’s chairman, and participated in FCC roundtables. According to Erickson, over 30,000 members of the Etsy community contacted the FCC and Congress as part of the #InternetSlowDown campaign.

    There are even numerous items for sale that sellers have made, supporting an open Internet.

    CEO Chad Dickerson had this to say: “I’m thrilled to see President Obama stand with Etsy and our sellers in calling for strong net neutrality rules under Title II. The President has proved that he truly is a champion of the Internet. I urge Chairman Wheeler to follow suit.”

    Etsy is in the process of expanding its presence in the physical world, as it recently began giving its sellers free card-readers to help them expand their Etsy-based businesses.

    Image via Etsy

  • Should The Internet Be Reclassified As Obama Requests?

    Should The Internet Be Reclassified As Obama Requests?

    In an effort to protect an open Internet, President Obama announced that he’s asking the FCC to reclassify Internet service under Title II of the Telecommunications Act.

    “In plain English, I’m asking them to recognize that for most Americans, the Internet has become an essential part of everyday communication and everyday life,” he said, noting that the FCC is an independent agency, and that ultimately, it’s their decision.

    Do you agree with the President? Share your thoughts on the matter in the comments.

    “The public has already commented nearly four million times, asking the FCC to make sure that consumers – not the cable company – gets to decide which sites they use,” the President said.

    In the official statement, the President notes that this should all be extended to mobile broadband as this is increasingly how Americans are accessing the Internet.

    Earlier this year, the FCC said it was working on rules that could end up giving priority to big companies. As you may recall, most people on the Internet weren’t incredibly thrilled.

    More on Title II of the Telecommunications Act here.

    The President’s full statement is as follows:

    An open Internet is essential to the American economy, and increasingly to our very way of life. By lowering the cost of launching a new idea, igniting new political movements, and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known.

    “Net neutrality” has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted. We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas. That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality.

    When I was a candidate for this office, I made clear my commitment to a free and open Internet, and my commitment remains as strong as ever. Four years ago, the FCC tried to implement rules that would protect net neutrality with little to no impact on the telecommunications companies that make important investments in our economy. After the rules were challenged, the court reviewing the rules agreed with the FCC that net neutrality was essential for preserving an environment that encourages new investment in the network, new online services and content, and everything else that makes up the Internet as we now know it. Unfortunately, the court ultimately struck down the rules — not because it disagreed with the need to protect net neutrality, but because it believed the FCC had taken the wrong legal approach.

    The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include:

    No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.

    No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.

    Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.

    No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

    If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital. But combined, these rules mean everything for preserving the Internet’s openness.

    The rules also have to reflect the way people use the Internet today, which increasingly means on a mobile device. I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks.

    To be current, these rules must also build on the lessons of the past. For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business. That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call, or a packet of data.

    So the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.

    Investment in wired and wireless networks has supported jobs and made America the center of a vibrant ecosystem of digital devices, apps, and platforms that fuel growth and expand opportunity. Importantly, network investment remained strong under the previous net neutrality regime, before it was struck down by the court; in fact, the court agreed that protecting net neutrality helps foster more investment and innovation. If the FCC appropriately forbears from the Title II regulations that are not needed to implement the principles above — principles that most ISPs have followed for years — it will help ensure new rules are consistent with incentives for further investment in the infrastructure of the Internet.

    The Internet has been one of the greatest gifts our economy — and our society — has ever known. The FCC was chartered to promote competition, innovation, and investment in our networks. In service of that mission, there is no higher calling than protecting an open, accessible, and free Internet. I thank the Commissioners for having served this cause with distinction and integrity, and I respectfully ask them to adopt the policies I have outlined here, to preserve this technology’s promise for today, and future generations to come.

    FCC Chairman Tom Wheeler has issued a response.

    “The President’s statement is an important and welcome addition to the record of the Open Internet proceeding, ” he began. “Like the President, I beleve that the Internet must remain an open platform for free expression, innovation, and economic growth. We both oppose Internet fast lanes. The Internet must not advantage some to the detriment of others. We cannot allow broadband networks to cut special deals to prioritize Internet traffic and harm consumers, competition and innovation.”

    “The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do,” he said later in the statement. “The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face. For instance, whether in the context of a hybrid or reclassification approach, Title II brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers, as well as legal issues ranging from the ability of Title II to cover mobile services to the concept of applying forbearance on services under Title II.”

    You can read the whole thing at the link above.

    Verizon has released a statement in response to the President’s words: “Verizon supports the open Internet, and we continue to believe that the light-touch regulatory approach in place for the past two decades has been central to the Internet’s success. Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation. That course will likely also face strong legal challenges and would likely not stand up in court. Moreover, this approach would be gratuitous. As all major broadband providers and their trade groups have conceded, the FCC already has sufficient authority under Section 706 to adopt rules that address any practices that threaten harm to consumers or competition, including authority to prohibit ‘paid prioritization.’ For effective, enforceable, legally sustainable net neutrality rules, the Commission should look to Section 706.”

    AT&T said the White House’s announcement, if acted upon by the FCC, would be a “mistake that will do tremendous harm to the Internet and to the U.S. national interests.”

    Comcast said, “To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper. This would be a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates. And such a radical reversal of consistent contrary precedent should be taken up by the Congress.”

    TechCrunch has longer statements from these providers. Then you have organizations like the ACLU and Internet Association weighing in.

    “Today, President Obama is a free speech champion,” the ACLU said. “He deserves an enormous amount of credit for unequivocally calling on the FCC to adopt rules that will finally allow the agency to protect the free and open internet. Preventing ‘fast lanes’ and discrimination against some content producers on the internet is one of the most important free speech issues of the digital age. Large broadband providers should not be allowed to slow or block content from their competitors or because the content may be controversial.”

    “The Internet Association applauds President Obama’s proposal for the adoption of meaningful net neutrality rules that apply to both mobile and fixed broadband,” said the Internet Association. “As we have previously said, the FCC must adopt strong, legally sustainable rules that prevent paid prioritization and protect an open Internet for users. Using Title II authority, along with the right set of enforceable rules, the President’s plan would establish the strong net neutrality protections Internet users require. We welcome the President’s leadership, and encourage the FCC to stand with the Internet’s vast community of users and move quickly to adopt strong net neutrality protections that ensure a free and open Internet.”

    Netflix, which just posted its monthly ISP speed rankings data, has also voiced support for the President.

    Well, you’ve heard a lot from both proponents and opponents of Obama’s request, as well as the FCC itself, which as the President says, ultimately has to make the decision. Where do you land on the debate? Let us know in the comments.

    Image via YouTube

  • Netflix to FCC: Say No to Comcast / Time Warner Cable Merger

    Netflix to FCC: Say No to Comcast / Time Warner Cable Merger

    Netflix, clearly unhappy with the proposed Comcast/Time Warner Cable merger from the outset, has finally made their concerns official with a petition to the Federal Communications Commission. In a just-filed Petition to Deny, Netflix argues that the entity formed by the merger would “have the incentive and ability – through access fees charged at interconnection points and by other means – to harm internet companies.”

    “The proposed merger puts at risk the end-to-end principle that has characterized the internet and been a key driver in the creation of the most important communications platform in history. Unsurprisingly, given their dominance in the cable television marketplace, the proposed merger would give Applicants the ability to turn a consumer’s internet experience into something that more closely resembles cable television. It would set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests,” says Netflix in the petition.

    “The transaction would give Applicant control of a dominant share of the nations’s residential high-speed broadband customers at a time when those customers increasingly engage with more content-rich applications that require high-speed broadband to work properly, such as Internet-delivered video.”

    If the Comcast/Time Warner Cable deal is approved, the resulting entity would control over 60 percent of the country’s broadband households.

    We’ve seen Netflix make the net neutrality argument against this merger before. Upon release of their last quarterly earnings report, Netflix CEO Reed Hastings said,

    “Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”

    Now, that opposition is on governmental record.

    At the time, Comcast was quick to refute Hastings’ claims.

    “There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only ISP in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules,” said SVP, Corporate and Digital Communications Jennifer Khoury. “In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans.”

    Of course, all of this is taking place months after Netflix made a deal with Comcast to ensure high-quality streaming. There is a debate on whether those sort of deals, which Netflix is afraid are only going to increase with a Comcast/TWC merger, are even about net neutrality or simply business as usual – but it’s clear that Netflix wants to frame the potential merger as a strike to net neutrality.

    Image via Netflix

  • Netflix And Comcast Continue To Publicly Bash Each Other

    Netflix And Comcast Continue To Publicly Bash Each Other

    Earlier this week, Netflix said in a letter to shareholders that it opposes Comcast’s proposed merger with Time Warner Cable. They said the Internet faces a long term threat from large ISPs driving up profits for themselves as well as costs for everyone else. In fact, this echoed a blog post the company put out last month called Internet Tolls and “The Case for Strong Net Neutrality”.

    Comcast fired back by releasing a statement saying that Netflix’s opposition to the merger is based on “inaccurate claims and arguments”. It also said that no company has had a stronger commitment to openness of the Internet that Comcast.

    By the way, in case you’ve been off the Internet for a couple days, this happened.

    Netflix has now put out another blog post called “The Case Against ISP Tolls“. This one shows a chart looking at Netflix performance before and since it paid Comcast’s toll to get better quality to its customers. It’s a pretty drastic difference, and the quality still leaves room for a great deal of improvement.

    Ken Florance, vice president of content delivery at Netflix, said in the post:

    In sum, Comcast is not charging Netflix for transit service. It is charging Netflix for access to its subscribers. Comcast also charges its subscribers for access to Internet content providers like Netflix. In this way, Comcast is double dipping by getting both its subscribers and Internet content providers to pay for access to each other.

    It is true that there is competition among the transit providers and CDNs that transport and localize data across networks. But even the most competitive transit market cannot ensure sufficient access to the Comcast network. That’s because, to reach consumers, CDNs and transit providers must ultimately hand the traffic over to a terminating ISP like Comcast, which faces no competition. Put simply, there is one and only one way to reach Comcast’s subscribers at the last mile: Comcast.

    There cannot be an “intensely competitive” market when Comcast alone sets the terms and conditions for access to Comcast subscribers. Comcast can simply refuse to provide capacity to any network at any time, constraining the ability for Comcast users to use the services they want.

    …

    We do a great deal of work at Netflix to provide our users with great video quality whenever they chose to use our service. Comcast already controls access and sets the terms of access to a substantial portion of people who connect to the Internet in the United States. We’re very concerned that a combined Comcast-TWC will place toll taking above consumer interests and will use their combined market power to the detriment of a vibrant and efficient Internet. That’s why Netflix opposes the merger.

    Comcast responded again. Here’s a statement from SVP, Corporate and Digital Communications:

    Netflix’s argument is a House of Cards. But there is no need for us to engage in a point-counterpoint with Netflix to demonstrate the continued distortions and inaccuracies on which it relies. As we and other industry observers have already noted, Netflix’s decision to reroute its Internet traffic was all about improving Netflix’s business model. While it’s understandable for Netflix to try to make all Internet users pay for its costs of doing business (as opposed to just their customers), the company should at least be honest about its cost-shifting strategy.

    Comcast has a multiplicity of other agreements just like the one Netflix approached us to negotiate, and so has every other Internet service provider for the last two decades. And those agreements have not harmed consumers or increased costs for content providers – if anything, they have decreased the costs those providers would have paid to others. As at least one independent commentator has pointed out, it was not Comcast that was creating viewability issues for Netflix customers, it was Netflix’s commercial transit decisions that created these issues. No ISP in the country has been a stronger supporter of the Open Internet than Comcast – and we remain committed both to providing our customers with a free and open Internet and to supporting appropriate FCC rules to ensure that consumers’ access to the Internet is protected in a legally enforceable way.

    Netflix will be raising its prices for new customers soon, which will help offset some of its costs.

    The Comcast/Time Warner merger is being reviewed by the Department of Justice’s antitrust division and the FCC as well as multiple states.

    Images via Wikimedia Commons, Netflix

  • Web Goes Ballistic Over FCC Net Neutrality Rules

    Web Goes Ballistic Over FCC Net Neutrality Rules

    The FCC is set to propose new rules related to net neutrality, and they’re not exactly in favor of it. In fact, according to reports, these rules would enable broadband providers to give preferential treatment to content providers who pay for access to “fast lanes”.

    So, you know, pretty much the opposite of net neutrality.

    Can any good come from this? Let us know what you think in the comments.

    The FCC said it will propose rules that would let content providers like Netflix, Google,Skype, etc. pay ISPs like Comcast (which is in the process of merging with Time Warner Cable) for those fast lanes.

    Netflix has already been having a war of words with Comcast, publicly opposing the merger.

    Netflix said in a letter to shareholders Monday, “If the Comcast and Time Warner Cable merger is approved, the combined company’s footprint will pass over 60 percent of U.S. broadband households, after the proposed divestiture, with most of those homes having Comcast as the only option for truly high-speed broadband (>10Mbps). As DSL fades in favor of cable Internet, Comcast could control high-speed broadband to the majority of American homes. Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”

    Comcast fired back with its own statement, saying, Netflix’s opposition is based on “inaccurate claims and arguments.”

    “There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only ISP in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules,” wrote SVP, Corporate and Digital Communications Jennifer Khoury. “In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans.”

    On the FCC’s new proposal, the Wall Street Journal reports:

    Developed by FCC Chairman Tom Wheeler, the proposal is an effort to prevent broadband Internet providers such as Comcast Corp. CMCSA +0.75% , Verizon Communications Inc., VZ +0.46% and Time Warner Cable TWC +1.04% from blocking or slowing down individual websites served up to the consumer. The idea is that consumers should be able to access whatever content they choose, not the content chosen by the broadband provider.

    But it would also allow providers to give preferential treatment to traffic from some content providers, as long as such arrangements are available on “commercially reasonable” terms for all interested content companies. Whether the terms are commercially reasonable would be decided by the FCC on a case-by-case basis.

    The report says the FCC will circulate its proposal on Thursday, and there will be a vote on whether or not to move forward with it on May 15th.

    Ars Technica shares a statement from an FCC official:

    “The FCC will be seeking comment on adopting Open Internet rules that achieve the goals of the 2010 Open Internet Order in a manner consistent with the D.C. Circuit’s decision in Verizon v. FCC. The NPRM [notice of proposed rulemaking] will propose, consistent with the Court’s analysis, that broadband providers would be required to offer a baseline level of service to their subscribers, along with the ability to enter into individual negotiations with content providers. In all instances, broadband providers would need to act in a commercially reasonable manner subject to review on a case-by-case basis. Exactly what the baseline level of service would be, the construction of a ‘commercially reasonable’ standard, and the manner in which disputes would be resolved, are all among the topics on which the FCC will be seeking comment.”

    …

    “The NPRM proposes to reinstate the same ‘no blocking’ rule adopted in 2010, but using a stronger legal rationale.” Beyond that, “new legal standard of ‘commercial reasonableness’ would be separately applied to the broadband network conduct to protect Internet openness.”

    A lot of people are taking the news to mean that the FCC is killing net neutrality. Wheeler says: “There are reports that the FCC is gutting the Open Internet rule. They are flat out wrong. Tomorrow we will circulate to the Commission a new Open Internet proposal that will restore the concepts of net neutrality consistent with the court’s ruling in January. There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted.”

    Still, most of the reaction we’re seeing is very negative, and isn’t buying what the FCC is selling.

    TechCrunch says the new rules will “brutalize the Internet.”

    GigaOm says, “When it comes to net neutrality, either the FCC thinks we’re idtios, or it just doesn’t care.”

    Longtime tech columnist MG Siegler says of the news, “Ugh ugh ugh ugh ugh ugh ugh ugh ugh. Bullshit.”

    It would seem that what advocates for an open Internet and net neutrality have always feared may come to fruition. Many believe small businesses are in jeopardy.

    More background here and here.

    UPDATE: Wheeler has written a blog post called “Setting the Record Straight on the FCC’s Open Internet Rules,” to address the “misinformation” circulating. Here it is in its entirety:

    There has been a great deal of misinformation that has recently surfaced regarding the draft Open Internet Notice of Proposed Rulemaking that we will today circulate to the Commission.

    The Notice proposes the reinstatement of the Open Internet concepts adopted by the Commission in 2010 and subsequently remanded by the D.C. Circuit. The Notice does not change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule. The Notice does follow the roadmap established by the Court as to how to enforce rules of the road that protect an Open Internet and asks for further comments on the approach.

    It is my intention to conclude this proceeding and have enforceable rules by the end of the year.

    To be very direct, the proposal would establish that behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted.

    Incorrect accounts have reported that the earlier policies of the Commission have been abandoned. Two points are relevant here:

    1. The Court of Appeals made it clear that the FCC could stop harmful conduct if it were found to not be “commercially reasonable.” Acting within the constraints of the Court’s decision, the Notice will propose rules that establish a high bar for what is “commercially reasonable.” In addition, the Notice will seek ideas on other approaches to achieve this important goal consistent with the Court’s decision. The Notice will also observe that the Commission believes it has the authority under Supreme Court precedent to identify behavior that is flatly illegal.

    2. It should be noted that even Title II regulation (which many have sought and which remains a clear alternative) only bans “unjust and unreasonable discrimination.”
    The allegation that it will result in anti-competitive price increases for consumers is also unfounded. That is exactly what the “commercially unreasonable” test will protect against: harm to competition and consumers stemming from abusive market activity.

    To be clear, this is what the Notice will propose:

    1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;

    2. That no legal content may be blocked; and

    3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

    Do you think the direction the FCC is going in is a threat to innovation and small business? Share your thoughts in the comments.

    Image via YouTube

  • Netflix CEO Talks Net Neutrality And Why It’s Paying Comcast

    Netflix CEO Talks Net Neutrality And Why It’s Paying Comcast

    Netflix CEO Reed Hastings wrote a rare post on the company blog to address concerns regarding net neutrality and its recently announced deal with Comcast. He writes:

    The essence of net neutrality is that ISPs such as AT&T and Comcast don’t restrict, influence or otherwise meddle with the choices consumers make. The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient.

    This weak net neutrality isn’t enough to protect an open, competitive Internet; a stronger form of net neutrality is required. Strong net neutrality additionally prevents ISPs from charging a toll for interconnection to services like Netflix, YouTube, or Skype, or intermediaries such as Cogent, Akamai or Level 3, to deliver the services and data requested by ISP residential subscribers. Instead, they must provide sufficient access to their network without charge.

    He goes on to note that some major ISPs (naming Cablevision specifically) are already practicing “strong net neutrality,” but that on other ones, Netflix performance suffers. Here’s a look at Netflix’s most recent ISP Speed Index data. Notice how far down Comcast is compared to Cablevision.

    As Hastings says, when Netflix pays an ISP interconnection fees (as it is doing with Comcast), service gets better for users. He writes:

    If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future. Roughly the same arbitrary tax is demanded from the intermediaries such as Cogent and Level 3, who supply millions of websites with connectivity, leading to a poor consumer experience.

    …

    Netflix believes strong net neutrality is critical, but in the near term we will in cases pay the toll to the powerful ISPs to protect our consumer experience. When we do so, we don’t pay for priority access against competitors, just for interconnection. A few weeks ago, we agreed to pay Comcast and our members are now getting a good experience again. Comcast has been an industry leader in supporting weak net neutrality, and we hope they’ll support strong net neutrality as well.

    It will be interesting to see how Comcast looks on the desk ISP Speed Index report.

    Hastings goes on to say that ISPs sometimes point to data about Netflix members accounting for 30% of peak residential Internet traffic, and want Netflix to share the costs, “But they don’t also offer for Netflix or similar services to share in the ISPs revenue, so cost-sharing makes no sense.”

    He had a lot more to say on the subject, so check out the post, but he concludes by saying that some big ISPs extract a toll “because they can,” and that they should realize that it is in their long-term best interest to support “strong” net neutrality, but that Netflix “will in cases reluctantly pay large ISPs to ensure a high quality member experience.”

    He also says Netflix will “continue to fight for the Internet the world needs and deserves.”

    In a letter to shareholders back in January, the company said it would “vigorously protest” ISPs impeding video streams, and forcing Netflix to pay fees, and that it would encourage its members to “demand the open Internet they are paying their ISP to deliver.”

    Image via Netflix

  • Netflix Makes Deal With Comcast To Ensure High-Quality Streaming

    Comcast and Netflix announced on Sunday that they’ve entered into a multi-year agreement to provide U.S. Comcast customers with a “high-quality Netflix video experience for years to come.”

    What it reportedly comes down to is that Netflix is paying some amount of money for access to Comcast’s network, and it represents a strategy that Netflix could pursue with other providers. According to The Wall Street Journal, citing someone familiar with the matter, Netflix is likely to compensate other big providers.

    “Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic,” the companies explain in the announcement.

    Both companies maintain that Netflix receives no preferential treatment.

    Dan Rayburn at StreamingMedia.com has a rant about how the deal is being portrayed in the media, which has often been through the lens of net neutrality debate, which he says is not right. He writes:

    Commercial interconnect relationships, also referred to as paid peering agreements, have been around since the Internet started, and it’s how the Internet works. Commercial interconnect deals have NOTHING TO DO WITH NET NEUTRALITY. Implying otherwise shows a complete lack of regard in understanding how traffic is and has been exchanged across networks for the past twenty years. The media as a whole should stop trying to insinuate or imply that everything that happens between two networks comes down to Net Neutrality. It doesn’t.

    …

    Today’s news is very simple to understand. Netflix decided it made sense to pay Comcast for every port they use to connect to Comcast’s network, like many other content owners and network providers have done. This is how the Internet works, and it’s not about providing better access for one content owner over another, it simply comes down to Netflix making a business decision that it makes sense for them to deliver their content directly to Comcast, instead of through a third party. Tied into Netflix’s decision is the fact that Comcast guarantees a certain level of quality to Netflix, via their SLA, which could be much better than Netflix was getting from a transit provider. While I don’t know the price Comcast is charging Netflix, I can guarantee you it’s at the fair market price for transit in the market today and Comcast is not overcharging Netflix like some have implied. Many are quick to want to argue that Netflix should not have to pay Comcast anything, but they are missing the point that Netflix is already paying someone who connects with Comcast. It’s not a new cost to them.

    Still, not everyone’s convinced of Rayburn’s argument. Some are skeptical due to the timing, and the lack of disclosure about specific terms of the deal.

    The deal comes after Netflix told shareholders in a letter accompanying its recent earnings report that it would fight ISPs and encourage customers to protest if providers should impede video streams. This is in light of a recent net neutrality ruling in favor of Verizon. Netflix CEO Reed Hastings and CFO David Wells wrote:

    Unfortunately, Verizon successfully challenged the U.S. net neutrality rules. In principle, a domestic ISP now can legally impede the video streams that members request from Netflix, degrading the experience we jointly provide. The motivation could be to get Netflix to pay fees to stop this degradation. Were this draconian scenario to unfold with some ISP, we would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver.

    The most likely case, however, is that ISPs will avoid this consumer-unfriendly path of discrimination. ISPs are generally aware of the broad public support for net neutrality and don’t want to galvanize government action.

    With Comcast having announced the pursuit of an acquisition of Time Warner Cable, this deal will affect all the more Netflix subscribers throughout the country. There are 30 million of them in all. Reports last week indicated that the the Time Warner acquisition has impeded progress of talks between Netflix and Time Warner regarding offering Netflix through TWC’s set-top boxes.

    Netflix and YouTube together account for roughly half of broadband traffic in the U.S.

    Image via YouTube

  • Will The FCC’s New Net Neutrality Rules Protect Consumers And Small Businesses?

    Will The FCC’s New Net Neutrality Rules Protect Consumers And Small Businesses?

    In January, the open Web took a major hit when a court sided with Verizon over the FCC’s net neutrality rules. The defeat meant that Verizon or any other ISP could throttle certain types of traffic in favor of others. While the FCC could appeal the ruling, the Commission is apparently not going that route.

    Reuters is reporting that the FCC will not be appealing the Verizon case instead opting to rewrite the rules. In last month’s ruling, the court said the FCC had the authority to regulate broadband access. FCC Chairman Tom Wheeler will reportedly be using this authority as a jumping point to bring back the non-discrimination rules found in the original net neutrality rules.

    Do you think the FCC is right to not appeal? Should new rules be written? Let us know in the comments.

    Wheeler issued a statement Wednesday detailing how he intends to rewrite these rules. In his statement, he says the court upholding the Commission’s authority to regulate broadband access will be used to accomplish three goals – enforce and enhance the transparency rule, fulfill the “no blocking” goal, and fulfill the goals of the non-discrimination rule. While the court had no problem with the transparency rule, it did smack down the latter two. Wheeler says he will work within the confines of the court’s ruling to ensure that ISPs can not block or discriminate against Internet traffic.

    By looking to the FCC’s current authority, Wheeler could be trying to avoid a potential fight over an easier solution to the net neutrality problem – reclassifying ISPs as common carriers. The FCC only classifies phone service operators as such and has immense authority over them. The court ruled that anything other than common carriers are subject to far less authority and regulation. While the FCC certainly has the authority to reclassify ISPs as common carriers, it may want to avoid the fight that would inevitably ensue.

    As you might expect, not everybody on the FCC is terribly fond of the idea. Commissioner Ajit Pai issued a statement as well saying that net neutrality rules are burdensome regulations that get in the way of process:

    When Congress told us to encourage broadband deployment by removing barriers to infrastructure investment, it also established the policy of the United States to “preserve the vibrant and competitive free market that presently exists for the Internet . . . unfettered by Federal or State regulation.” Whatever the Commission does as it moves forward, it must take that statutory command to heart.

    The Internet was free and open before the FCC adopted net neutrality rules. It remains
    free and open today. Net neutrality has always been a solution in search of a problem.

    What Pai doesn’t take into account is that net neutrality wasn’t much of a concern 10 years ago. As more and more services moved online, however, it became apparent that net neutrality would be a necessity moving forward. With nothing standing between an ISP speeding up its own services while throttling competitors, they aren’t going to support a free and open Web for long.

    While such scenarios have yet to materialize, we got a preview of what it may be like earlier this month when it was revealed that Netflix’ performance on Verizon was degrading. Netflix claims that Verizon was not intentionally throttling its speeds, but the poor performance Verizon users have been experiencing would become the norm if net neutrality rules are not reinstated.

    Not to mention, the proposed merger of Comcast and Time Warner Cable brings net neutrality concerns to the forefront. While Comcast has agreed to adhere to the FCC’s net neutrality rules for the next few years, nothing will stop them from throttling competitors like Netflix in favor of its own services once its agreement with the Commission expires.

    The examples thus far have all focused on Netflix as its generally seen as the standard in video delivery innovation. Not only did it pioneer the idea of streaming television over the Internet, but it’s also producing quality original content like House of Cards and Orange is the New Black.

    It’s hard to remember a time when Netflix was just a small startup, but there are hundreds, if not thousands, of potential startups and small businesses out there that could have the same kind of impact that Netflix has had. Without net neutrality rules to protect them, these small businesses would be at the mercy of the major Internet providers that would throttle their services unless they were willing to pay for the fast lane. Throttling innovation will lead to a stagnant market that can’t compete in an ever growing global economy.

    Net neutrality is more than just a philosophy. It’s a means to protect the consumer and small business from an industry that sometimes seems a little too monopolistic for its own good. While some will call for the FCC to reclassify broadband providers thus subjecting them to more regulation, the FCC seems to be going for a balance that satisfies the need for net neutrality without introducing more regulation than needed.

    Do you have faith in the FCC to protect consumers and small businesses with its new net neutrality rules? Or will be it one-sided in favor of Internet providers? Let us know in the comments.

    Image via Cable Center/YouTube

  • FCC: Any New Net Neutrality Rules Must Be ‘Dynamic’

    FCC: Any New Net Neutrality Rules Must Be ‘Dynamic’

    Earlier this month, the Washington D.C. Court of Appeals struck down the FCC’s net neutrality rules. In short, the court said that FCC didn’t have the authority to regulate ISPs in the same way they regulate common carriers (i.e. phone service providers). Now everybody wants to know where the FCC will go from here, but the Commission is still being rather ambiguous.

    The Hill reports that FCC Chairman Tom Wheeler said on Tuesday that the Commission would be taking a “dynamic” approach to net neutrality. What that means remained unexplained as Wheeler wouldn’t say if the FCC would be introducing new net neutrality laws to replace those that were struck down.

    Despite some ambiguity, Wheeler did say that any new approach to net neutrality would have to take the ever evolving Internet into account. His concern seems to be that any Internet regulations wouldn’t be able to keep up with the lightning fast pace at which the Internet develops. He said just as much by stating that the FCC doesn’t want “to say that somehow we’re smarter than the net.”

    So, where does the FCC go from here? It has two options – it can either reclassify ISPs as common carriers or it can take the wait and see approach. ISPs obviously want it to take the latter as they keep on saying the American public and regulators can trust them not to abuse their newfound freedom. Wheeler feels that way as well, but he isn’t exactly trusting. On the day of the ruling, he said that the FCC will bring down the regulatory hammer “if something appears to go wrong in a material, not a trivial, way.”

    As for those who rely on an open Web to operate, they weren’t particularly pleased with the ruling. Netflix CEO Reed Hastings in particular said that the ruling opened up the possibility for domestic ISPs to “legally impede the video streams that members request from Netflix.” Hastings later threatened to rally the full brunt force of an angry Internet if ISPs try to degrade his service in favor of their own.

    In a perfect world, net neutrality would be a thing that goes unquestioned. Unfortunately, nothing is ever perfect. As we explore this post-net neutrality Internet, ISPs are going to start experimenting with ways to make more money off an already near pure-profit business. If you want an early preview, just take a look at AT&T’s Sponsored Data. If the FCC doesn’t act on any of this, we might just have to go the Netflix route and start a good ol’ fashioned Internet riot.

    Image via Cable Center/YouTube

  • Netflix Says It Will ‘Vigorously Protest’ ISP Abuse If It Has To

    Netflix just released its earnings report for the fourth quarter along with an accompanying letter to shareholders.

    In the letter, CEO Reed Hastings and CFO David Wells talk a little bit about the recent Verizon net neutrality ruling and how it may affect business.

    They call the ruling “unfortunate,” noting that “in principle, a domestic ISP now can legally impede the video streams that members request from Netflix, degrading the experience we jointly provide.”

    “The motivation could be to get Netflix to pay fees to stop this degradation,” the letter continues. “Were this draconian scenario to unfold with some ISP, we would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver.”

    The company doesn’t appear to expect ISPs to immediately screw consumers over.

    “The most likely case, however, is that ISPs will avoid this consumer-unfriendly path of discrimination,” the two say. “ISPs are generally aware of the broad public support for net neutrality and don’t want to galvanize government action. Moreover, ISPs have very profitable broadband businesses they want to expand. Consumers purchase higher bandwidth packages mostly for one reason: high-quality streaming video. ISPs appear to recognize this and many of them are working closely with us and other streaming video services to enable the ISPs subscribers to more consistently get the high-quality streaming video consumers desire.”

    This comes, by the way, as Netflix is pushing 4K ultra HD content – something else the company talked up in its letter, though acknowledging that at this point, the “short-term impact’ is mainly on consumer perception of Netflix being “a leader in Internet TV.”

    “In the long-term, we think Netflix and consumers are best served by strong network neutrality across all networks, including wireless,” the letter says. “To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted. To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed.”

    Image via Netflix

  • Will Net Neutrality’s Death Hurt The Small Online Business?

    On Tuesday, the D.C. District Court of Appeals ruled in favor of Verizon in its fight against the FCC’s Open Internet Order. In other words, net neutrality was killed. It certainly was a blow to Internet freedom activists, but it may be even worse for small online businesses.

    So, what is net neutrality? Columbia Law School professor Tim Wu originally coined the term and defines it best: “The idea is that a maximally useful public information network aspires to treat all content, sites and platforms equally.” In other words, net neutrality calls for ISPs to treat all online traffic the same regardless of its source. For example, Verizon wouldn’t be able to give preferential treatment to its own Redbox Instant streaming service over Netflix by making one faster than the other under net neutrality.

    Do you think the courts were wrong to kill net neutrality? Will it affect the Internet in any significant way? Let us know in the comments.

    We have established that net neutrality is pretty important. So, why did the courts kill it? Well, it’s kind of the FFC’s fault. In 2010, the Commission established the Open Internet Order as a way to regulate ISPs and their behavior. Here are the three rules the FCC set up to govern ISPs courtesy of Wikipedia:

  • Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services
  • No blocking. Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services.
  • No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.

    • That sounds reasonable enough. Why did the court feel the FCC overstepped its bounds then? Well, it all goes back to the Communications Act of 1996 – an updated version of the original Communications Act of 1934. The law gave the FCC the power to designate companies as either common carriers or something more specific, like cable television operator or ISP. If designated as a common carrier, the FCC is able to heavily regulate those companies. If not, its authority isn’t as strong.

    In the case of Verizon and other ISPs, they are not designated as common carriers. Under the law, the FCC doesn’t have the authority to impose the kind of regulations seen in the Open Internet Order on those companies. Here’s what the court had to say on the matter:

    As we explain in this opinion, the Commission has established that section 706 of the Telecommunications Act of 1996 vests it with affirmative authority to enact measures encouraging the deployment of broadband infrastructure. The Commission, we further hold, has reasonably interpreted section 706 to empower it to promulgate rules governing broadband providers’ treatment of Internet traffic, and its justification for the specific rules at issue here—that they will preserve and facilitate the “virtuous circle” of innovation that has driven the explosive growth of the Internet—is reasonable and supported by substantial evidence. That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.

    In other words, the FCC screwed up by not designating ISPs as common carriers. Under the law, it just doesn’t have the authority required to enforce net neutrality. Now, it could change all that by reclassifying ISPs as common carriers but that’s easier said than done. While some hope for the FCC to reclassify ISPs, FCC Chairman Tom Wheeler issued a statement saying that the Commission is going to take a wait and see approach. He says that he doesn’t want to enact any new sweeping regulations at this time, but will if the need arises:

    The principles provide sufficient guidance to set expectations for both producers and consumers. If something appears to go wrong in a material, not a trivial, way, the FCC will be available to use the totality of its authority for adjudication and enforcement. It will look to the Open Internet Order principles and it will examine the facts in light of the principles.

    Do you think the FCC will regulate if push comes to shove? Let us know in the comments.

    So, what does this all mean for small online businesses? We don’t really know yet. If ISPs take this ruling to mean they can do whatever they want, it could be disastrous for small businesses trying to reach consumers. The ISPs will construct digital toll gates that only allow those willing to pay through. While the big guys get a fast pass to consumers, the small business that can’t afford the fees will have to take the slow road. Online consumers are notoriously impatient and any perceived slowdown on your site will have them go to a competitor that can afford the tolls.

    Interestingly enough, ISPs want you to know that they’re not going to do that. Time Warner Cable issued a statement following the ruling that said they would continue to operate their network as they’ve always done:

    “Since pioneering the development of high-speed broadband service in the late 1990s, Time Warner Cable has been committed to providing its customers the best service possible, including unfettered access to the web content and services of their choice. This commitment, which long precedes the FCC rules, will not be affected by today’s court decision.”

    While ISPs may not block or slow down services, they may go in another direction that’s far more insidious. At CES, AT&T announced a new initiative called sponsored data that would allow content providers to pay a fee towards not having their content count towards a consumer’s monthly limit of data. While it’s not outright discrimination, it’s setting up something very similar.

    Let’s run a scenario: You are trying to choose which music streaming service to use. You can either use the big established player or the small, innovative startup. The big established player may not have as many options, but it can pay AT&T to not have its content count towards your monthly data cap. The small startup can’t afford the fees so its data will count towards your data cap. With that in mind, you’re more likely to use the established player despite the startup having the better product.

    Proponents of an open Internet say that net neutrality ensures everybody is on a level playing ground – from the big guys to the small startups. Without it, the ISPs can choose the winners and losers based solely upon who’s willing to pay them more. It’s not good for consumers and it’s not good for the thousands of small online businesses that are increasingly turning to the Internet to sell their product.

    Can we trust ISPs to keep the Internet fair and open? Should net neutrality be enforced? Let us know in the comments.

    Image via Google+ Your Business/YouTube

  • Obama Administration Still Supports Net Neutrality

    Obama Administration Still Supports Net Neutrality

    Open Internet advocates all over the nation today were saddened to learn that D.C. District Court of Appeals sided with Verizon in its fight with the FCC over the Commission’s net neutrality rules. While the FCC can still appeal to the Supreme Court, many are concerned that the Commission won’t even bother. The Obama administration is now strongly hinting that won’t be the case.

    The White House issued a statement today in regards to the appeals court ruling that struck down the net neutrality rules. While the administration would not comment on an appeal, it said that the President “remains committed to an open Internet.”

    Here’s the full statement:

    “President Obama remains committed to an open internet, where consumers are free to choose the websites they want to visit and the online services they want to use, and where online innovators are allowed to compete on a level playing field based on the quality of their products. As we continue to review the ruling, we remain committed to working with the Federal Communications Commission (FCC), Congress, and the private sector to preserve a free and open Internet.”

    Interestingly enough, the Obama administration may have found itself an ally in the most unlikely of companies – Time Warner Cable. It’s kind of ironic that the second most hated ISP in America is fully supportive of an open Internet, or at leas that’s what the company claims in a statement released today:

    “Since pioneering the development of high-speed broadband service in the late 1990s, Time Warner Cable has been committed to providing its customers the best service possible, including unfettered access to the web content and services of their choice. This commitment, which long precedes the FCC rules, will not be affected by today’s court decision.”

    While that may be true, a little bit of wordplay could lead us to a future where Time Warner Cable institutes something like AT&T’s sponsored data. It technically doesn’t run afoul of the FCC’s original net neutrality rules and it would allow them to claim to still support an open Internet. Unfortunately, it would also allow TWC or any other ISP to institute data caps while letting content providers pay to deliver data to consumers without contributing to the cap.

    In short, the open Internet might not be threatened by a lack of net neutrality rules. It’s just going to be exploited until there’s nothing left.

    [h/t: The Hill]
    Image via The White House/flickr

  • Appeals Court Strikes Down FCC’s Net Neutrality Rules

    Appeals Court Strikes Down FCC’s Net Neutrality Rules

    For the past few years, Verizon has been in a bitter battle with the FCC over the Commission’s enforcement of net neutrality rules. The case made its way all the way to the Washington D.C. Court of Appeals where both sides argued for whether or not the Commission could enforce the rules.

    The Washington D.C. Circuit Court of Appeals issued its anticipated ruling today in Verizon v. FCC with Verizon being named the victor in a 2-1 decision. The decision guts the FCC’s Open Internet Order – a set of rules that intended to prevent ISPs from discriminating against certain types of traffic. For example, Verizon wouldn’t be able to give preference to Redbox over Netflix under the FCC’s rules. With those rules gutted, Verizon and other ISPs now have free reign to either slow down transfer speeds for competitors or make those competitors pay for speedy access to customers.

    Wow, that sounds pretty horrible. Why did the appeals court rule in favor of something that seems so anti-consumer? Well, it’s kind of the FCC’s fault. While the ruling holds that the FCC has general authority over how ISPs treat Internet traffic, the courts say that the Commission didn’t provide a compelling enough reason to justify its authority over specific instances.

    Here’s the relevant bit of the decision:

    As we explain in this opinion, the Commission has established that section 706 of the Telecommunications Act of 1996 vests it with affirmative authority to enact measures encouraging the deployment of broadband infrastructure. The Commission, we further hold, has reasonably interpreted section 706 to empower it to promulgate rules governing broadband providers’ treatment of Internet traffic, and its justification for the specific rules at issue here—that they will preserve and facilitate the “virtuous circle” of innovation that has driven the explosive growth of the Internet—is reasonable and supported by substantial evidence. That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.

    So, where does this leave us – the Internet consumers that will be most affected by this? Well, there are two ways this can now go. Either the FCC can appeal to the Supreme Court, or they can just let this fight go. For the former, the Supreme Court would likely either refuse to hear it or rule in favor of Verizon again considering the current makeup of the court.

    As for the latter, it’s not like the rules were stopping ISPs from introducing programs that violates the net neutrality philosophy. During CES last week, AT&T announced Sponsored Data – a new plan that allows content providers to pay for their customers’ data. In essence, AT&T is letting the big guys pay to win while small businesses will be forced to compete at a major disadvantage.

    With the FCC’s net neutrality rules being gutted like this, it’s really only a matter of time before all of the major ISPs introduce something similar to sponsored data. For you to reliably enjoy Netflix on Time Warner Cable, Netflix will now have to pay Time Warner for faster access to your home. This will in turn force Netflix to raise its prices. It would also negatively impact small businesses and startups that rely on streaming to deliver content as they wouldn’t be able to afford the fees. This would negatively impact innovation and competition as only the established players could afford the gatekeeper fees.

    In the end, all of the above is merely speculation until we know how the FCC is going to progress from here. The net neutrality rules were put into place by former FCC Chairman Julius Genachowski. His successor, Tom Wheeler, was a former lobbyist for the telecom industry so the chances of him appealing the decision are slim to none. Still, miracles can happen as Wheeler supported and helped set up an agreement that lets Americans unlock their phones after their contract has expired.

    UPDATE: FCC Chairman Tom Wheeler has issued the following statement in regards to today’s ruling:

    “The D.C. Circuit has correctly held that ‘Section 706 . . . vests [the Commission] with affirmative authority to enact measures encouraging the deployment of broadband infrastructure’ and therefore may ‘promulgate rules governing broadband providers’ treatment of Internet traffic.’ I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment. We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

    [h/t: Ars Technica]
    Image via Wikimedia Commons