The Court's Own Words: Life Without Title II Has Online Discrimination, Paid Prioritization, Exclusive Deals, And Maybe Blocking

from the it's-not-like-it's-secret dept

To hear Tom Wheeler and most of the big broadband players explain the net neutrality situation, the appeals court decision back in February laid out a "roadmap" for the FCC to continue to use Section 706 for its open internet rules. But that's not actually true. It's a clear misrepresentation of what the court actually said.

The language of the Verizon decision by the DC Circuit court is pretty clear: unless the FCC rests its rules in Title II of the Communications Act, the FCC must permit the carriers to engage in discrimination, charge access fees, cut exclusive deals, and perhaps block websites. Despite this, the FCC is proposing to use Section 706 (again), rather than Title II, and the court already ruled that Section 706 does not authorize network neutrality in January.

To begin, without Title II, the FCC cannot treat broadband providers as "common carriers."
We think it obvious that the Commission would violate the Communications Act were it to regulate broadband providers as common carriers. Given the Commission's still-binding decision to classify broadband providers not as providers of “telecommunications services” [under Title II] but instead as providers of “information services,” … such treatment would run afoul of section 153(51): “A telecommunications carrier shall be treated as a common carrier under this [Act] only to the extent that it is engaged in providing telecommunications services.”
So, what does it mean to regulate broadband providers as common carriers? It means to impose any rule against discrimination or requiring providers to charge similar prices to similarly situated parties.
“[I]f a carrier is forced to offer service indiscriminately and on general terms, then that carrier is being relegated to common carrier status.” … Given these principles, we concluded that [a specific earlier rule concerning data roaming] imposed no per se common carriage requirements because it left “substantial room for individualized bargaining and discrimination in terms.”
If the FCC must permit "substantial room for … discrimination in terms" without Title II, then it cannot ban unreasonable discrimination.

The Court also said that the FCC cannot ban paid prioritization under Section 706. That’s because, under any provisions other than Title II, the FCC cannot require the broadband providers to effectively charge websites the same price of zero not to be blocked.
[W]ith respect to broadband providers’ potential negotiations with edge providers, the [2010] Order ominously declares: “it is unlikely that pay for priority would satisfy the ‘no unreasonable discrimination’ standard.” … If the Commission will likely bar broadband providers from charging edge providers for using their service, thus forcing them to sell this service to all who ask at a price of $0, we see no room at all for “individualized bargaining.”
Remember, "substantial" room, not "no room at all," is required when imposed on a carrier not subject to Title II. Therefore, under Section 706, without Title II, the FCC cannot ban access fees imposed by cable and phone companies.

Moreover, Section 706 also requires exclusive deals.
For example, Verizon might … charge an edge provider like Netflix for high-speed, priority access while limiting all other edge providers to a more standard service. In theory, moreover, not only could Verizon negotiate separate agreements with each individual edge provider regarding the level of service provided, but it could also charge similarly-situated edge providers completely different prices for the same service. The FCC might not even be able to ban blocking under Section 706.
The Verizon decision said: "Whether the [2010] Order's anti-blocking rules, applicable to both fixed and mobile broadband providers, likewise establish per se common carrier obligations is somewhat less clear [than the anti-discrimination rule]." But it still struck down the anti-blocking rule. The decision merely stated that the FCC may have tried to defend the anti-blocking rule on other grounds, but said "whatever the merits of that view," it did not need to address it. So the anti-blocking rule may not be permissible under Section 706. The FCC called this discussion a "roadmap," when in reality it is not even what lawyers call "dicta," because the court did not have to consider the argument, and passed no judgment on it.

Yes, the court already said you can't do network neutrality under Section 706 and need Title II.

Why is the FCC still trying?

Tim Wu noticed similar facts unfolding in 2010, under the previous FCC Chairman Genachowski:
Genachowski grounded the rules in what is called—in legal jargon—the agency’s “auxiliary authority.” If the F.C.C. were a battleship, this would be the equivalent of quieting the seventeen-inch-inch guns and relying on the fire hoses.

What could possibly have convinced the agency to pursue a legal strategy that any law student could see was dubious? As in any big mistake, there were compounding errors. Members of Congress threatened to strip the F.C.C. of some of its powers if it enacted the rules with the full weight of its legal authority. (Indeed, Congress tried and failed to overturn the Open Internet Order.) A.T. & T. warned that it would cancel its ongoing effort to become a cable company, threatening to tar the agency with job losses. One senior F.C.C. staffer told me that it would have unduly affected the stock prices of the telecom firms. The agency also had a Kool-Aid-drinking problem; it started to believe its own legal arguments, however weak. Altogether, it was a cowardly reaction to empty political threats.
If the current FCC doesn't change course and pursue Title II, Wu could write the same paragraphs a few years from now about the current Chairman, Wheeler.

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  • identicon
    Anonymous Coward, 12 Sep 2014 @ 11:45am

    Wheeler won't care his bank accounts will be packed with pay offs .

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Sep 2014 @ 12:52pm

    Carful balance...

    It's sort of tough to look like you are working in the best interest of the public while getting paid off from multiple directions/ways by corporations.

    Give the guy break will ya?

    reply to this | link to this | view in chronology ]

  • identicon
    Baron von Robber, 12 Sep 2014 @ 12:55pm

    Wheeler will win Best Dingo in Show.

    reply to this | link to this | view in chronology ]

  • identicon
    Andyroo, 13 Sep 2014 @ 1:12am

    Come on this iis crazy...

    Isp's are nothing more than a supplier of internet access at a speed they advertise , nothing more nothing less.

    If for any reason they cannot supply me with access to netflix or any other video service then they must stop selling internet access until they have upgraded their service to provide me with the speed I need to access any video sites..

    reply to this | link to this | view in chronology ]

  • icon
    fgoodwin (profile), 13 Sep 2014 @ 8:11am

    Title II does not ban discrimination

    That's why businesses pay more for a local telephone line than residential customers, even though both get exactly the same service. City customers pay more than rural customers, in order to provide a subsidy.

    Intrastate LD rates are higher than interstate LD rates. Yet all these services are regulated under Title II. Anyone who says you won't be able to discriminate under Title II does not know what they're talking about.

    reply to this | link to this | view in chronology ]

  • icon
    GEMont (profile), 13 Sep 2014 @ 5:15pm

    Wheeler the Dealer. Nothing up my sleeve....

    Yup, it definitely looks like the Most Corrupt and Deceptive Administration In American History has picked the right man for the job once again.

    Regardless of all the noise Wheeler has made about reigning in the industry, he has always stopped short of actually doing anything, and consistently declined to take the one road that might succeed in protecting Net Neutrality from the vultures.

    Instead, he is either playing to the audience and pretending up till the last minute that he is on the public's side before throwing in the towel and letting the dinosaurs win the day, or he's just extorting the industry in the hopes of a greater under-the-table payoff, or a position on their Board of Directors when he retires from the FCC - a month or so after he lets them take over the web.

    Same old same old.

    Move along now. Nothing to see here, folks.

    reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 14 Sep 2014 @ 8:07am

    It's a wonderful story, but it's full of "might" "maybe" and "could"... perfect scare tactic material.

    let's make it simple: There is no sane reason why an ISP would want to fully block access to websites or attempt to charge extra for them. They would be driven out of the market place in minutes. The moment it happens, a competitor will come along, feed off that negative feeling, and boom, the deed is done.

    The only reason most cable / ISPs have a hold of the market is because they aren't fucking it up enough for someone else to take the risk to knock them down. Start blocking websites or have the mythical "$9.99 a month for cnn.com" stuff, and their days will be very short indeed.

    So the court (and the author) can suppose, suggest, hint, and go on and on... but practical business says "sorry, you are wrong"

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Sep 2014 @ 9:49am

      Re:

      let's make it simple: There is no sane reason why an ISP would want to fully block access to websites or attempt to charge extra for them. They would be driven out of the market place in minutes. The moment it happens, a competitor will come along, feed off that negative feeling, and boom, the deed is done.

      When they are also cable TV providers, they have a good reason to block competition to their other business, or increase the costs of Internet use to compensate for its loss, (that is charge much more that is reasonably for Internet services).
      As to a competitor coming in if the try to block websites, or increase the cost to access some websites, in many places they have a local monopoly, and no competitor can come into the market.

      reply to this | link to this | view in chronology ]

      • icon
        GEMont (profile), 15 Sep 2014 @ 2:57am

        Re: Re:

        Monopolies - once upon a time they were illegal, and for a very, very good reason.

        Does anyone remember why Monopolies were once Illegal?

        Does anyone know why Monopolies are no longer Illegal?

        Wasn't it the Bible that mentions something about when the Merchant Becomes King, the shit hits the fan......

        reply to this | link to this | view in chronology ]

  • icon
    TwelveBaud (profile), 15 Sep 2014 @ 9:05am

    It's a shame the author of this article only discussed the court's opinion starting on Page 45, which explains the one little problem with the FCC's technique, and completely ignores everything else Judge Silberman mentioned before that, as well as Judge Tatel's entire concurrence/dissent. I know the message Mr. Ammori wants to push is "reclassification is the only way," but why should all the positive affirmations in these opinions be set aside and memory-holed? Isn't "the Open Internet Order is justified and good despite Verizon's objections" worth preserving?

    reply to this | link to this | view in chronology ]

  • icon
    TwelveBaud (profile), 15 Sep 2014 @ 9:09am

    (Correction to my earlier comment: Tatel wrote the opinion of the court, Silberman wrote the concurrence/dissent.)

    reply to this | link to this | view in chronology ]


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