Not the End for Net Neutrality

This week’s ruling, by a federal appeals court, against the FCC in its tussle with Comcast Corp. (CMCSA) over the “throttling” of certain traffic over the cableco’s network leaves the Commission, under net-neutrality proponent and chairman Julius Genachowski, little room to maneuver under the current legislative framework. It does not, however, mean “the end of Net neutrality” as so many advocates and commentators have proclaimed. The federal government has other routes to obtain the goal of insuring a “free and open Internet,” which Comcast itself – which was basically caught red-handed slowing the traffic of file-sharing service BitTorrent – says it supports.

“The stakes are simply too big to let an appeals court decision be the final word on how customers are treated in the digital world,” wrote the editors of the San Francisco Chronicle.

As business and regulatory editor Kelly Teal noted in her report on the ruling by the U.S. Court of Appeals for the D.C. Circuit, “The FCC really has four choices at hand: Appeal the finding; stop trying to regulate broadband altogether; come up with new rationale for policing ISPs’ network management and seek court approval of that reasoning; or ask Congress for explicit permission.”

Appealing the finding seems like throwing good money after bad; the appeals court has set a precedent that will be hard to overturn. Giving up on all attempts to regulate broadband would be a throw-up-your-hands step that Genachowski and his boss, President Obama, will probably never take. Asking Congress for more authority to regulate Big Telecom is like asking for a pony for Christmas: nice idea, but it ain’t gonna happen.

“Congress could address this gaping hole in the nation's regulatory structure, but its glacial pace makes that untenable,” wrote the editors of The San Jose Mercury News. “The FCC will have to do it.”

That leaves coming up with a new rationale. In fact, the FCC could vote tomorrow to move ISPs from regulation under Title 1 of the Communications Act, which now covers broadband service, to Title 2 — the more heavily regulated “telecommunications service.” Naturally, the major carriers and cablecos would pour even more lobbying dollars into getting such a move overturned. And it’s not clear that the result would be best for consumers, either; big carriers would surely pass along the costs of any new regulatory burdens, contributions to the universal service fund, and so on, on to their customers.

“This would effectively mean applying to broadband providers the rules designed for landline telephone companies in the 1930s,” wrote the editors of the conservative journal, National Review.

There’s another choice — a “fifth way,” if you will, that would allow consumers to make clear choices about which broadband providers they go with, while keeping the federal government out of the business of telling network providers how to manage their traffic. Requiring transparency of the big carriers – freely available and full information on what speeds consumers are actually getting, how traffic is managed over the network, which content providers (if any) receive preferential treatment, and so on – would allow the market to take over and allow consumers to shift to ISPs with less fettered and more accessible networks. If Comcast wants to throttle BitTorrent (or ABC or CBS, if its proposed merger with NBC goes through), let ‘em — but they’d have to tell consumers, who could then make up their minds to go elsewhere. It’s like nutrition disclosures on soda containers: You can keep drinking sugar- and caffeine-laden Mountain Dew if you want, or you can choose a natural soda like Izze.

In fact, the FCC might not even be the most appropriate agency to seek the right balance here. The Federal Trade Commission is “charged with the responsibility of promoting fair competition among rivals in the marketplace by preventing unfair and deceptive trade practices and restraining the growth of monopolies that tend to lessen free trade.” The phrase “unfair and deceptive trade practices” well sums up Comcast’s entire approach to this issue, to date. Created in 1914, the FTC already has all the authority it needs to require full disclosure by ISPs.

This, of course, presumes that your local grocery sells Izze — or that you have a choice of broadband providers. That is a whole different question, and one that Congress and the FCC clearly have the power to act on. Rather than fighting yesterday’s battle over traffic management, Genachowski should move on the broader war over telecom competition in this country. That’s the only way to insure that the Internet remains a wild and free frontier, rather than a series of locked-down compounds controlled by major carriers.