U.S. Court of Appeals Strikes FCC Open Internet Order: What Does This Mean for the Consumer?

January 24, 2014

On Tuesday, Feb, 10 2014, the U.S. Court of Appeals for the District of Columbia struck down an F.C.C. regulation that mandated net neutrality. The “Open Internet” order prevents Internet service providers (ISPs) from regulating the content of the internet. Rather, ISPs charge an access fee in which the consumer pays for the right to access the Internet. Whether the user is accessing yahoo.com or Netflix.com cannot, theoretically, be controlled by the ISPs. The ISP must provide the same streaming capabilities when the user accesses each site.

By striking the Open Internet order, ISPs now have the legal authority to regulate the Internet the way television networks are regulated.

This theory is the framework that distinguishes the Internet from other media sources, such as cable or satellite television. In the latter, the provider offers to connect the consumer to selected channels and the user is limited to that selection. This process encourages a system controlled by capitalist ventures. For instance, each network (Fox, CNN, ESPN) will place a bid on coverage for an event and then the cable provider will decide if they want to offer that network to the consumer. Have you ever moved across the country and suddenly realized you can’t watch your precious Angels games on television? That is because the cable company has decided not to purchase the network’s coverage of the event. They instead have purchased the same network’s coverage of the (semi) local Atlanta Braves game.
By striking the Open Internet order, ISPs now have the legal authority to regulate the Internet the way television networks are regulated. Want access to a LA Laker’s fanpage? Sorry, but that will cost extra as your package only includes access to Charlotte Bobcat fan pages.
However, this ruling does not have to result in this “closed Internet” scenario. The court struck down the no-blocking and nondiscrimination provisions of the Order, but upheld the transparency provision. The reasoning did not focus on Verizon’s stated right to eventually market the Internet in this matter, but on the FCC’s current classification of ISPs and the ability to regulate this type of classification in this manner.
As of 2002, the FCC classifies cable modem services as “Information Services.”  They do not have the legal authority to impose common carrier obligations on services defined within this classification. However, if the FCC reclassifies the services as “telecommunication services,” then the FCC may then assert the non-discrimination and anti-blocking policies that were struck from the current Open Internet order.
What’s next? The FCC needs to get the ball rolling because ISPs such as Verizon have stated every intention to provide Internet services in a manner that mimics cable/ satellite television services. It’s up to the legal community as well as users to assert the desire to access an “open internet.”