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Jon Brodkin-January 14, 2014 at 9:20 PM UTC

Today’s court ruling invalidates the anti-blocking and anti-discrimination rules in the Federal Communications Commission’s Open Internet Order. This is not surprising to observers who are aware of an inconvenient fact-the FCC really messed up this matter.

The intentions of the committee are noble. Its order lays down rules of net neutrality, making it illegal for Internet service providers to block services or charge content providers for access to end users. For example, the order will prevent Verizon from providing a faster way to Netflix in exchange for payments from consumers. It can also prevent Verizon or similar companies from blocking phone or video services that compete with its own products.

Verizon challenged the order and won a major victory in today's decision (PDF) of the U.S. Court of Appeals for the District of Columbia Circuit.

The problem with the FCC is that several years before its Open Internet Order in 2010, it classified ISPs as information services rather than telecommunications services, thereby making them not subject to public operator rules. As Ars wrote in 2010, the public transmission part of the U.S. communications law is “stating that public networks such as telephones must be open to all visitors at the same rate and cannot discriminate. Even if the old AT&T runs a private network, the company must Take everyone's phone calls; it is illegal to prevent critics from using the Internet."

If the FCC says that broadband providers are public operators, it would be easier to stipulate the conditions under which they must transmit traffic from content providers to home Internet users. Since the FCC did not follow the public transportation route, but still enacted anti-blocking and anti-discrimination rules, the committee had to do some legal exercises to prove the rationality of the open Internet order.

In the court case, the FCC stated that its rules are not general carrier regulations because “Verizon is free to provide or refuse to sell broadband Internet access services to any end user. Verizon does not need to insist on providing services to anyone indifferently. Verizon (and others) The only thing that broadband Internet access providers cannot do is prevent their end users from accessing legitimate content and charge edge providers to allow end users to access them."

Supporters and opponents of the legislation on the Internet doubt that the three judges panel of the Court of Appeals will think this reasoning is problematic, and it is true.

"[W]e must determine whether the requirements imposed by the Open Internet Order make broadband providers treated by public operators," the judge wrote. "If they do, then given the way the committee chooses to classify broadband providers, these regulations won't hold."

The court wrote: "We did not hesitate to conclude that the anti-discrimination obligations imposed on fixed broadband providers have'relegated [these providers] to the status of ordinary operators,'". "When broadband providers are required to provide services to all marginal providers without'unreasonable discrimination,' this rule itself forces these providers to insist on'serving the public indiscriminately.' The committee is almost entirely dependent on The flawed argument that the broadband provider is not the operator of the edge provider, so the committee hardly responded on this point."

The ruling is 81 pages long and covers various arguments raised by Verizon and the FCC, but it actually comes down to a common transportation issue. For example, the court stated that it does not even need to consider Verizon's claim that the Open Internet Order violated its First Amendment rights, because the FCC's failure in the public transportation argument made this point meaningless.

The court did not cancel all open internet orders. It retains the order rules that require ISPs to disclose information about their network management practices.

The Court of Appeals sent the case back to the Federal Communications Commission "for further litigation consistent with the opinion." The court did not challenge the FCC's power to declare ISPs as public operators. Consumer advocacy organization Public Knowledge urges the FCC to use today’s ruling as an opportunity to classify broadband as a public transportation service or "open Internet protection with immature public operator rules[s]".

Harold Feld, senior vice president of Public Knowledge, admitted to Ars, “This reclassification will be challenged by the court. But the court here is very clear that the FCC makes the classification choice.”

Will the FCC do this? FCC Chairman Julius Genachowski was uncomfortable when the Open Internet Order was issued, possibly due to pressure from members of Congress. The newly sworn-in chairman Tom Wheeler has publicly stated that ISPs should be able to charge marginal providers, which is one of the things the Commission’s "Open Internet Order" is trying to prevent.

"I strongly believe in the market," Wheeler said, as we pointed out in our report last month. "I think we will also see a two-way market, and Netflix might say,'Well, I will pay to make sure you can receive it, and my subscribers can receive the best transmission of this movie.' I think We want these things to develop. We want to observe what happens, we want to make decisions accordingly, but I return to the fact that the market should make these decisions, and the function of the competitive market determines the regulation. degree."

Wheeler pointed out today that the ruling does confirm that the FCC is allowed to “make measures to encourage the deployment of broadband infrastructure” and therefore may “promulgate rules governing the handling of Internet traffic by broadband providers.” He said that the FCC will consider “all available The options, including appeal options, to ensure that the networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate for the benefit of all Americans."

Although the ruling invalidated the FCC’s anti-blocking and anti-discrimination rules, the court did agree with the committee’s opinion that without such rules, “broadband providers may be motivated to discriminate against edge providers. The committee observed that broadband providers— —Usually the same entity that provides phone and TV services to end users — “has an incentive to interfere with the operation of third-party Internet services that compete with the provider’s revenue-generating phone and/or pay-TV services. "

The judge wrote that there was no "reason" in the court records that made us doubt this decision. "As the committee pointed out, Voice over Internet Protocol (VoIP) services such as Vonage are increasingly replacing traditional telephone services, and broadband providers such as AT&T and Time Warner also acknowledge that online video aggregators such as Netflix and Hulu directly compete to own their own "Core video subscription services"... Broadband providers also have strong incentives to accept fees from edge providers in return for excluding competitors or granting them priority access to end users. In fact, Verizon’s lawyers Announced, "But for the [Open Internet Order] rules we will explore these commercial arrangements. '"

AT&T is already implementing new charges for content providers in the wireless market, which are not subject to all regulations on open Internet orders. We can expect such an arrangement to happen in the wired broadband market, unless there is any change.

Today, Verizon welcomed the court’s decision, stating that it “discovered that the FCC could not impose the universal transmission requirements of the last century on the Internet and removed rules that restricted the ability of broadband providers to provide innovative services to their customers.”

"One thing is certain," Verizon continued. “Today’s decision will not change the ability of consumers to access and use the Internet like they do now. The court’s decision will provide more room for innovation, and consumers will have more choices to determine how they access and experience the Internet. Verizon has always and will Continue to work on the open Internet, which provides consumers with competitive choices and unimpeded access to legitimate websites and content when, where, and how they want. According to the court’s decision, this will not change."

Comcast also expressed an opinion, saying that although it "has always supported the Commission's open Internet order", it believes that the FCC can establish balanced rules and "at the same time avoid inappropriate public operator supervision."

Regardless of today's ruling, Comcast is currently subject to the open Internet order rules due to the agreement related to the acquisition of NBCUniversal.

"[We] agreed in the NBC Universal Transaction Order to comply with the open Internet rules for seven years, even if these rules are modified by the court," Comcast said. "We are satisfied with this promise because we do not have-and will not-prevent our customers from accessing legitimate Internet content, applications or services. Comcast customers want an open and vibrant Internet , We are absolutely committed to providing this experience."

Michael Powell, chief executive of the National Cable and Telecommunications Association, said: "The cable industry has always made it clear that it will not — and will not — prevent our customers from accessing legitimate Internet content, applications, or services.” Powell It did not specify whether its members intend to charge marginal providers preferential access fees. NCTA stated in a blog post that the paid game arrangement, which it calls "paid service enhancement", will "help support and sustain the growth of next-generation networks."

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