By now everyone is aware of the recent decision in Comcast v. FCC. At base, the U.S. Court of Appeals held that the FCC does not have the authority to require all businesses to adhere to network neutrality rules. Regardless of your personal view about network neutrality, I think this decision is good for hosts, and, honestly, the Internet.
Looking at this from the perspective of hosts, it’s a good decision. In its purest sense, network neutrality means that all traffic must be treated the same. This means that one customer’s traffic cannot be favored over another’s. The debate about this issue has been framed from a consumer perspective: what if Comcast enters into a deal with Yahoo and makes Google’s page load slower? This is a very important issue. However, very little consideration is given to network issues from an infrastructure perspective.
Almost every infrastructure provider engages in some sort of network preference or traffic shaping. The back end “pipes” through which the Internet actually flows really wouldn’t work properly if networks weren’t designed to balance flows through them, and control bandwidth rates. This balancing is largely done to simply ensure the integrity of a network. However, it may also be done for economic reasons.
Hosting companies often favor one network over another. Traffic may be sent to a lower cost bandwidth provider over one with a higher cost simply to maximize revenue. Not properly thought through, net neutrality could allow a customer to argue that a host is not entitled to direct traffic in this manner. Indeed, I can certainly see credible arguments made that an infrastructure provider is not entitled to direct customers who are paying less money to a slower, lower quality, bandwidth provider. Rather the infrastructure provider is required to treat all customers the same.
From the perspective of the Internet as a whole, I think it may also be a good decision. In this case, Comcast may have won the battle, but it’s likely to lose the war. It seems pretty clear that public policy strongly favors open access to the Internet. Congress, the FCC and FTC have struggled for years trying to figure out how to recognize this. The decision may finally force Congress to spend some legislative time “thinking” about it. Regardless of your views of government, this is a good idea.
The FCC is a HORRIBLE agency to serve as an Internet regulator. Anyone who has ever negotiated a bandwidth contract should realize what a mess the FCC is. This mess stems from the FCC’s statutory authority and history. The FCC is in essence a “public lands” regulator created to control access to public airwaves and telecom monopolies. It has neither the regulatory authority, nor cultural history, necessary to thoughtfully create regulations for an industry that is essentially private and hellishly competitive.
In addition the FCC is largely in the hands of former telecom monopolies and broadcast behemoths. Any influence on its policies is controlled by a small number of attorneys and lobbyists who have spent the time negotiating the byzantine regulations created by the FCC over the course of its long history, and developing personal relationships with staff members that can only be done with frequent contact.
One need only look to the inability of startup telecom companies to influence FCC policies in the late 1990’s. The ability of small Internet entrepreneurs to influence FCC policy is slim to none. Not because the FCC is not open to this influence, but because exercising this influence requires a coordinated effort and the ability present the story to regulators. Entrepreneurs are too busy running their businesses to take the significant time necessary to create an effective lobbying and influence strategy.
It is the FCC’s lack of statutory authority that will likely cause Congress to act. Based on the Comcast decision, the only way the FCC can act to enforce network neutrality standards would be to classify Internet services in the same category as telecommunication services. This would create a highly regulated environment. I believe it is extremely unlikely that Congress will agree to this, given Member’s significant support for a lightly regulated Internet.
While influencing policy in Congress is difficult, it is significantly easier than influencing policies at Federal agencies. Most small businessmen can make time to go see their Congressmen or Senators when they are visiting their districts. Try scheduling a meeting with an FCC commissioner or staff member without coming to D.C.
Congressional discussion of this issue is also likely to be more “free wheeling.” Because Congress isn’t constrained by narrow grants of statutory authority, hearings will have a much richer exchange of ideas. Any resulting legislation is also likely to have been subject to substantially more public scrutiny than an agency rulemaking.
On balance, I think hosts and other internet infrastructure providers should view the Comcast ruling as a victory. We should all begin to prepare for the repercussions of the decision, and efforts it may take to ensure that network neutrality, in whatever form, does not have unintended effects on the backbone of the Internet.
About David Snead
David Snead is a lawyer whose practice is focused on internet infrastructure providers. In his eleven years in this practice, he has represented clients including multinationals, middle tier hosting companies, and two guys, a server, a T-1 and a huge MasterCard balance.
A long-time WHIR contributor, David Snead is the Web hosting business's best-known legal expert. Through his WHIR blog, he offers a credible legal perspective on both specific actions in the Web hosting business and general developments in legislation.
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