Appeals Judges Seem to Lean Against FCC’s Internet Order - Multichannel

Appeals Judges Seem to Lean Against FCC’s Internet Order

VERIZON CHALLENGED REGULATOR’S POLICY IN D.C. COURT
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WASHINGTON — If the judges’ questioning last week was any indication, at least some portion of the Federal Communications Commission’s Open Internet order could be vacated, with Internet-service providers allowed to charge websites for providing them priority access to broadband subscribers.

Oral argument was held Sept. 9 before a three-judge panel of the U.S. Court of Appeals for the District of Columbia on a challenge to the Open Internet order lodged by telco Verizon Communications. On the panel were judges Judith Rogers, David Tatel and Laurence Silberman.

Only Tatel was on the possibly precedent-setting panel in 2010 that ruled against the FCC in an earlier Internet regulatory action. The 2010 panel ruled the FCC had not adequately justified an order directing Comcast to not interfere with subscribers’ use of peer-to-peer services such as BitTorrent.

NONDISCRIMINATION QUALMS

Cable operators represented by the National Cable & Telecommunications Association said they would not block access to legal content and applications, no matter what the court does. Verizon, though, signaled it was interested in looking into charging edge providers — such as Google, for example — for speedier access to customers, and suggested it should have the ability to charge for that access, period.

While the judges seemed to think the FCC had some role in overseeing Internet access, at least two of the three judges appeared to find major problems with the nondiscrimination portion of the agency’s Open Internet order. That provision effectively prevents Internet providers from charging or providing different levels of service to websites accessed by their customers over the public Internet. The FCC allows for such arrangements over the nonpublic Internet (socalled specialized services).

Tatel, who wrote the court’s opinion in the 2010 decision striking down the FCC’s BitTorrent decision, said the nondiscrimination clause appeared to be the one with the most problems as it related to the agency imposing common- carrier regulations on an information service, which is out of bounds.

Should the FCC lose the case, it could attempt to classify broadband access under Title II common-carrier regulations. That would allow for mandatory access, but would trigger major angst and pushback from cable and phone providers, which see that as the “nuclear option.”

If the FCC loses, look for Congressional Democrats to try and step in to clarify the FCC’s authority. Republicans would be equally exercised if the FCC made a move to classify broadband under Title II.

“It was a very good day for broadband providers in that two of the three judges strongly signaled that the FCC did not have the authority to mandate common-carrier-like anti-discrimination regulation on broadband providers,” Scott Cleland, the chairman of NetCompetition, an e-forum supported by broadband interests, said. “Specifically, Judges Tatel and Silberman appear to agree that the FCC does not have the authority to force broadband providers to provide their service for free to edge companies.”

Cleland was at the hearing, which was filled beyond capacity, including an overflow room for 50 or so other people.

While the usual caveats apply about interpreting what judges say during oral arguments — they sometimes play devil’s advocate — “it sure looks like a reversal,” one public-interest lawyer said. “The nondiscrimination rule is likely to be thrown out.”

That lawyer said the remaining doubt is over whether or not the court also throws out the anti-blocking and transparency rules.

Without anti-discrimination regulations, Internet providers could strike deals to charge websites for speedier access, though they could not charge for access to standard speeds if the no-blocking provision were retained.

“Judge Tatel was reasonably straightforward in saying that he thinks the anti-discrimination rule is a form of common carriage, and wasn’t buying the FCC’s efforts to justify it,” the public-interest lawyer said.

Silberman seemed a likely vote for reversal, the lawyer said, while Rogers seemed most likely to uphold the FCC’s rules. She did not ask many questions during argument.

The judges asked probing questions to both sides and at times seemed to have trouble wrapping their minds around some of the FCC’s reasoning surrounding just exactly what the rules did and did not allow, and why.

REVENUE AT STAKE

Verizon lawyer Helgi Walker made it clear what the stakes were. She said that her client was interested in exploring charging edge providers for priority access to the Internet, but could not do so because of the FCC rules.

Tatel suggested that if the court were to vacate the nondiscrimination provision, but leave the blocking provision intact — permitting the pay-for-prioritization the FCC allows for specialized services that don’t travel on the public Internet — that would provide the flexibility that could resolve some of the problems with the FCC applying common-carrier rules to a non-common-carrier service. “Nondiscrimination seems like classic common carriage to me,” he said.

Walker agreed, but also said the no-blocking provision was a de facto nondiscrimination provision. The provision requires that all edge providers be carried, and at the same price: zero.

A decision from the court could come by the end of the year.

TAKEAWAY

Questions asked during oral arguments indicated that a D.C. appeals panel may be poised to shoot down the FCC’s Open Internet order.

Mocking the Powers That Be

WASHINGTON — As of press time, “The Internet Must Go,” a mockumentary on the network-neutrality issue, had recorded more than 115,000 views on YouTube.

In the vein of Thank You for Smoking’s send-up of the tobacco industry-meets-a “Better Know a District” profile from Comedy Central’s The Colbert Report, the short film (just under a half hour) features Second City alumnus Brian Shortfall portraying a fictional marketer employed by Internet providers to pitch their (pricey) vision of the Internet. The video was produced by filmmaker Gena Konstantinakos.

It was posted to coincide with the oral argument last week in Verizon’s challenge to the FCC’s Open Internet order. It features familiar faces in the network-neutrality fight including, Public Knowledge’s Gigi Sohn and Harold Feld, Columbia University law professor Tim Wu (he who backed the FCC in the 2010 BitTorrent case), Susan Crawford, former adviser to President Obama, and Sen. Al Franken (D-Minn.), a big network-neutrality rule backer who rarely sits for non-mock interviews from journalists.

It makes the case for preserving that order in the face of what its backers concede appears to be the two of three judges’ problems with the antidiscrimination provision in the order.

— John Eggerton

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