Comcast ruling is a shift from neutral into reverse

So a federal appeals court has now ruled that the FCC does not have the authority to represent the public’s interests in the provision and management of Internet access. Comcast, the object of the FCC’s attempt at regulation (see “FCC to Comcast: Go forth and sin no more“), and its fellow giant ISPs are toasting the decision, as are those who have an absolute faith in the ability of market forces, if left alone, to solve any problem. And that would be nice, if only there weren’t so many examples to the contrary.

The ultimate responsibility of a business is to follow the Prime Directive: maximize profit and shareholder value. A lot of times, that priority happily happens to coincide with our interests, when companies try to figure out what we need, compete to fill that need, and create jobs and wealth in the process. In theory, the Prime Directive keeps companies from acting against the public interest because it would cost them customers. In practice … well, that’s why we have regulatory agencies — because when push comes to shove, the Prime Directive trumps the broader public interest every time. And that’s why it’s untenable in the long run to have the nation’s communications regulators unable to have any say in the nation’s most dynamic and empowering communications medium.

When it comes to Internet access, the market’s system of checks and balances is out of whack. The industry is dominated by a few big companies, exempt from great masses of communications regulations, with their own financial interests in content as well as access, and sitting at the choke points of what is now an essential utility. Under the Prime Directive, if they can make more money by offering preferred treatment to their partners or by subverting the delivery of other traffic, who’s to stop them. Normally, the fear of losing customers would accomplish this, but in much of the country, there’s little choice when it comes to broadband providers and service is too important to do without. And while watchdog groups can expose bad behavior, they have no teeth. So if customers, competition and public scrutiny can’t keep the big ISPs honest, that leaves the responsibility with the government.

Of course, whether our lawmakers have the fortitude to properly represent our interests in face of such powerful lobbies is an open question, but should they choose or be persuaded to do so, those who are toasting Tuesday’s ruling could find themselves wishing for the good old days. As things stood, the FCC was telling ISPs to follow two reasonably straightforward rules: go ahead and manage traffic, as long as your practices are even-handed and non-discriminatory, and be open with customers about what you’re doing. Now, pending an appeal of this ruling, several other possibilities present themselves, all fraught with uncertainty. Congress could specifically authorize the FCC to regulate the Net access market and enforce net neutrality. Or Congress could take a crack at crafting a net neutrality law itself, which given the legislative process is not a comforting prospect. Or, the FCC on a simple majority vote could reclassify broadband providers as common carriers, making them subject to a whole raft of regulations over issues like rate setting and universal service obligations. Talking about the ISPs, telecom analyst Rebecca Arbogast said, “They may have won the battle only to face a larger war.”

It would be a lovely world if none of this were necessary, if corporations just naturally considered the public’s interests as well as their own, and the government didn’t need to wave a stick to prevent abuses — but it’s not this world.


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    Very well said…it is an unachievable ideal that the invisible hand of Adam Smith will direct commerce for the good of all, and Republicans who want unlimited freedom to take money without responsibility know this full well.

  • Fred Dunn

    I have to protest your questioning whether our Government has the fortitude to go up against the Telecommunications giants that control our net neutrality.

    We have the best Government money can buy!

  • n00b

    I’m surprised you didn’t mention the Windstream fiasco last week where they were hijacking all the browser chrome searches in Firefox and sending them to their “DNS not found” error page full of sponsored listings. I’d say “oops” but it was obviously intentional on their part…

  • Joey Carroll

    Typical socialist attitude. There’s a BIG government solution for everything.

    Sorry, but I don’t want some Obama jock sniffing a$$hole having ANYTHING to do with regulating the net.

  • Lou Mazz

    I’m not a Comcast apologist, but agree with the decision. Before this saga is done, every packet on the Internet will have to be accounted for and paid for by either a producer or a consumer. Otherwise, we can expect consumers and producers to continue to increase their activity while the owners of the infrastructure struggle to keep up. This enables an artificial debate on “neutrality” when the real issue is supply and demand economics. Confusing the issue is the wired/wireless distinction. Wireless spectrum is a public resource that will ultimately be treated differently than privately-funded wired/fiber infrastructure.

  • Pete B

    I am fine with the court’s decision. What the author fails to realize is that the only thing worse than corporate greed is government’s insatiable hunger for power and corruption. As long as there aren’t antitrust violations, consumers are still much more likely to affect positive change than government. Technology will continue to improve and new sources of communication will provide competition where it might be thin now.

  • Ed Perry

    Slavish evangelism for either “side” of the net neutrality discussion fails to recognize the many technical and marketing issues that affect current implementations of delivery services and the various network infrastructures. Unfortunately the situation remains much more complex, at least for the time being, than the simplistic picture painted by either advocacy. And it’s unlikely to improve so much as it is to become even worse in many areas before longer term solutions are put into play. This is due not only to user demographics (rising populations in already heavily congested areas) and ever more “rich” (traffic-intensive) applications (e.g., VoD and interactive gaming), but the asymptopic limitations currently being reached by various multi-wavelength loading schemas (including ultra-dense QAM). In the meantime, of course, issues related to QoS and the various TYPES of traffic must also be addressed (consider, for example, the “social value” trade-offs between critical VoIP safety communications and some movie collector’s desire to own every zombie movie ever made).

  • Paul

    Comcast socks. Get another carrier. Make them pay twice for those high-priced (highly effective) lawyers.

  • Grandpa

    Lou Mazz: An interesting comment. I hope you are right. Usually, in the United States, the absolute power this gives a company like Comcast leads to absolute money. Look for a new richest man in the world real soon. Look for even slower internet access at even higher costs also.

    The pity is, even with this bad decision, it doesn’t have to be this way. Our government can simply pass laws to change it. Laws that will pass court muster, and regulate this monopoly.

    Interesting isn’t it that the country that invented the internet has one of the slowest internet access speeds. Kind of like the country that invented the computer not making computers. Thank God for the high morals of the Republicans.

  • RedRat

    Internet service providers should be just that! they provide the wires to your house to deliver bits and bytes. Same goes for cableTV systems, they provide the pipe to your door and deliver TV content. Same goes for a phone company, they provide the wires or wireless airwaves so you can talk. What this ruling does, it allows companies like Comcast to determine exactly who and what you should get as content. Maybe they might just decide that you don’t need to see ABC, CBS, or Fox. Same goes for certain cable channels that are not owned by Comcast, e.g., Comedy Central. They might not outright cut these out but they could throttle back on the bandwidth and make your viewing of non-Comcast programs annoying or bothersome, e.g., pixelating, poor sound quality, not permit HD broadcasts, etc. All of this they could do since they now will be permitted to determine who, what, and how you view your TV. Since Comcast also provides phone service, you might just find that your Skype service to be very erratic.

    In the end, the service provider should have no vested interest in the content only the ability to deliver bits and bytes.

  • stuart

    Separate the medium from the message, eh Rat?

    Add some semblance of enforcing the antitrust laws and that probably will do the trick.

  • Cliff Reader

    When the craze for deregulation began in the 1980s, it was accompanied by a significant relaxation in anti-trust enforcement. Those two do not have to go together, and should not go together – rather, anti-trust enforcement should be more vigilant when regulation goes down, as a counter to abuse.

    A better solution to this problem would be to subject the local monopolies of communications providers to rigorous anti-trust review. It could lead to a break up of vertical integration, in which connection, service, and content cannot be owned by a single corporate entity.