Broadband providers or Internet Providers are not considered telecommunication services by law (Supreme Court decision)(1). They are “information services” thus they are not common carriers and different from an old school home phone service.(2) By not being “common carriers” Comcast or Verizon can dodge regulations.(3, 4, 5) Back in the days of dial-up and DSL, unregulated meant not having to share their lines with companies who used a dial tone like Earthlink(6, 7) or MCI (remember those guys). Now it means that Comcast can make a deal giving Netflix priority over all other Internet traffic (8).
What the heck is a common carrier ?
For example, Joe and Al make bags. They are business competitors. In order to distribute these bags to stores the only real way is railroad. Joe and Al each drop 50 bags at the train station to be sent to Ohio. Now here's where it gets tricky. Joe just paid off the railroad guys to take all his 50 bags first and deliver them to Ohio. Al meanwhile doesn't have any such deal but assumes that all 50 of his bags will get to Ohio at the same time as his competitor Joe. When the train pulls up to the station in Ohio all of Joe's bags are there. None of Al's. A week and a half later, a train pulls up to Ohio with 10 of Al's bags. Not fair. So the railroad guys are regulated as a common carrier.
The principle of a “common carrier” was explained during the a Supreme Court hearing with B & O Railroad company in 1892 (yes, the same B&O Railroad from the Monopoly board).(9)
According to the courts, big media and the Federal Communications Commission (FCC), “telecommunications service” providers are common carriers and “information service” providers such as Verizon are “private carriers” and therefore don't have the same regulations.(10, 11, 12)
The FCC laid out its guidelines for net neutrality, the Open Internet Order, banning such deals as Netflix-Comcast, and the court says no way. Comcast is an information service and therefore not a common carrier and therefore it can discriminate on any “edge provider” they want. Netflix is Joe who's bags that all got to the station first, and You Tube is Al with 10 of his bags getting to Ohio a week and a half late and 40 still unaccounted for.
This is what the Court of Appeals meant when it said:
“Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”(13)
One month later, Comcast and Netflix strike a pro-discrimination deal which inevitably allows Netflix priority on the Net. And, the net neutrality people are screaming murder, but their voices are not being heard because the only way is through the Big Media like Comcast-NBCUniversal-Soon-to-be-Time-Warner (14), which is not considered a common carrier.
If Comcast, AT&T and Verizon are not considered common carriers then who is?
This was the question asked by Justice Ginsburg in 2005.(15) The real answer is no one.
What's the deal with Edge Providers?
The appeals court explained the definition of an Edge Provider in their Verizon vs. FCC opinion:
“Edge providers are those who, like Amazon or Google, provide content, services, and applications over the Internet, while end users are those who consume edge providers’ content, services, and applications...when an edge provider such as YouTube transmits some sort of content—say, a video of a cat—to an end user, that content is broken down into packets of information, which are carried by the edge provider’s local access provider to the backbone network, which transmits these packets to the end user’s local access provider, which, in turn, transmits the information to the end user, who then views and hopefully enjoys the cat.”(16)
To date, there are 2,990,636 cat videos on Youtube.com. And, Internet Openness says, “We have a right to put as many cats as we want.” The First Amendment says so, too. People are not stupid. We do many other things on the Internet from academic research, political debate and journalism, etc. to Facebook to porn to music (Good and Bad). Decision makers assume that the general public only understands turning on a machine and watching cats. To obfuscate the decisions which affect public interest with the intention of belittling people is apparently regarded as good business practice.
Comcast, AT&T and Verizon have enough dough to give everyone free and open Internet and there is plenty of bandwidth to go around. Why is this even an issue?
The answer begins and ends with the free market approach. Obviously, these companies have complete control of the Telecommunications industry, regardless of what the courts and the FCC want to call it. The desire for higher earnings is trumped in this case by the opportunity for more control over a collective consciousness that displays itself as The Internet. Lack of bandwidth is not really the issue here. It is an issue of what to do with so much bandwidth and who controls it.
"We want the maximum good per person; but what is good? To one person it is wilderness, to another it is ski lodges for thousands. "
-Garrett Hardin Tragedy of Commons (17)
The industry has tried to take the legislative route to control the Internet by lobbying for bills such as SOPA, PIPA and CISPA, but the public wasn't having it.
Now corporations like Verizon can use their army of lawyers and lobbyists to make deals behind closed doors and battle it out in court bringing federal agencies like the FCC, that are supposed to protect public interest, to their knees. Verizon aims for their “triple-cushion shot.”(18) claiming that the deregulation of the telecommunications industry provides for the “[T]he social and economic fruits of the Internet economy [that] are the result of a virtuous cycle of innovation and growth...driving improvements in the infrastructure which, in turn, support further innovations in services and applications.” It is also the the virtuous cycle of fuckery that has driven the explosive growth of Telecommunications stock and consolidated industry; a virtuous cycle if you're Ted Turner.
Of course the big corporations don't want government regulation of the telecommunications industry, but neither does the public. The SOPA-PIPA bills resulted in a world-wide protest and an Internet blackout in 2010; look at what's happened with the NSA and the Snowden leak.
What's the deal with the FCC? Why do they appear to be promoting net neutrality yet they forgo appeal in a case like Verizon?
The Verizon decision begins with a statement by Judge Tatel:
“For the second time in four years, we are confronted with a Federal Communications Commission effort to compel broadband providers to treat all Internet traffic the same regardless of source—or to require, as it is popularly known, “net neutrality.”(19, 20)
Only two times in four years has the FCC brought this issue to court because they have been busy brokering deals between big media and telecommunications companies like crazy.(21) While the FCC appears to be doing their job in protecting the public interest by promoting “Internet openness,” their main objective is industry growth. The commissioners of the FCC, past and present, have been notorious for conflicts of interest. Executives and lobbyists from the industry have been appointed to their chairs as commissioners, essentially lobbying for businesses instead of regulating them. The FCC calls this a “competition-focused regulatory approach.”(22)
Meredith Attwell Baker is a perfect example. In the early 2000's, Baker served as VP of Williams Mullen Strategies, a lobbying firm.(23) Then in 2010, as FCC commissioner, she was adamantly opposed to the FCC's Open Internet Order. In her dissent she claims:
“The [Open Internet Order] bypasses a market power analysis altogether, and acts on speculative harms alone...Our competition-focused regulatory approach has attracted over half a trillion dollars to build network infrastructure this decade. Billions more have been invested in devices and applications that ride on those networks. Tablets and smartphones will fill stockings this holiday season...The only plausible reason [for net neutrality] left is to deliver on one of the President’s campaign promises.”(24)
Baker's dissenting statement goes on, laying out 13 more pages of arguments which avoid even the possibility of “homogenized, and de-journalized empires that respond more to quarterly reports than to the information needs of citizens.”(25) To conclude her dissent which concludes the 194 page Open Internet Order she writes:
“When we work together, there is so much good we can do. I hope the New Year brings a fresh perspective on our nation’s communications challenges and a renewed focus on working collaboratively together.”(26)
Six months later Baker joined Comcast as Senior Vice President of Government Affairs, NBCUniversal.(27)
A letter written to journalists by Former FCC chairman Michael Copps gives an insight on how the FCC was functioning during his term as commissioner:
“It was disheartening to realize how government—my own agency—was an accomplice in diminishing our news and disfiguring your journalism. It isn’t just the excesses of a Wall Street bazaar run wild; it is also proactive government policy-making.”(28)
Copps goes on to explain that Obama, during his first campaign, “had affirmed that public interest considerations should drive FCC deciscion making.”(29) Back in 2007 as a senator, Barack Obama wrote to the FCC:
“The [FCC] has failed to further the goals of diversity in the media and promote localism, and as a result, it is in no position to justify allowing for increased consolidation of the market.”(30)
Last year Obama appointed Tom Wheeler as FCC commissioner. Obama introduced his nominee as “one of the leaders of a company that helped create thousands of good, high-tech jobs...He’s helped give American consumers more choices and better products...So Tom knows this stuff inside and out.”(31) Nothing in this statement is about net neutrality or “diversity in the media and promot[ing] localism.” Obama's focus has switched to pro-industry: “...we’re setting up legal structures and regulatory structures that facilitate this continued growth and expansion that can create good jobs and continue to grow our economy.”(32)
After the recent Verizon decision, chairman Wheeler offered a brief statement outlining several initiatives “to ensure that the Internet remains a platform for innovation, economic growth, and free expression.”(33) To the dismay of many net neutrality proponents, Wheeler stated that the FCC would not appeal the Verizon decision. In his half-hearted statement he offers the possibility that the FCC “should consider ways to make [the transparency rule] even more effective” by using it to “assess the risks and benefits of embarking on new projects.”(34) In other words, if a new company wants to offer streaming video and Netflix has priority on the Internet, the FCC might advise them not to bother.
So, the short answer is that the FCC's takes the “Internet openness” position in order to promote telecommunications industry growth (ie. information service provider industry growth).
“Internet openness, [The FCC] reasoned, spurs investment and development by edge providers, which leads to increased end-user demand for broadband access, which leads to increased investment in broadband network infrastructure and technologies, which in turn leads to further innovation and development by edge providers.”(35)
All this about growth of industry, what about growth of the content?
Musicians can listen to millions of recordings on Spotify to further their craft, inspiring everyone to make better music. Now, Spotify will have to strike a deal with Comcast which will result in more advertisements and higher cost to subscribers. Anyone who has used Spotify or Pandora knows that if you are listening to a great album or a classical piece containing different movements, a loudness maximized advertisement between tracks completely destroys any hope of inspiration. While Wheeler and company may boast of the Internet as the “greatest engine of free expression,”(36) in most cases commercialized cookie-cutter entertainment prevails and has the effect of dumbing down the public rather than promoting growth. Are we promoting growth, diversity and freedom of expression or will the industry continue to follow the American Idol business model in a “virtuous cycle” of profit for Big Media and telecommunications companies?
1-US Supreme Court - NATIONAL CABLE & TELECOMMUNICATIONS ASSN. V.BRAND X INTERNET SERVICES (04-277) 545 U.S. 967 (2005) (Brand X) "Held: The Commission’s conclusion that broadband cable modem companies are exempt from mandatory common-carrier regulation is a lawful construction of the Communications Act under Chevron and the Administrative Procedure Act. Pp. 8—32."
2-Telecommunications Act of 1996, (Telco 1996) Definitions p. 5 "‘‘(49) TELECOMMUNICATIONS CARRIER.—The term ‘telecommunications carrier’ means any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226). 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, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage."
3-Preserving the Open Internet, Broadband Industry Practices. (Open Internet Order) Rep. no. FCC 10-201. FCC, 23 Dec. 2010 p. 46
4-Telco 1996 Sec. 3 -49
5-Verizon v. Federal Communications Commission. United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT. 15 Jan. 2014. p. 4 “Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”
6-National Cable & Telecommunications Association v. Brand X Internet Services 04-277. Oral Arguments. Supreme Court. 29 Mar. 2005. Supreme Court of the United States. N.p., 29 Mar. 2005. pp.29-51 “...if telecommunications and something else is involved, and that's what you offer, you are not offering a telecommunications service.”
7-Hansell, Saul. "Cable Wins Internet-Access Ruling." New York Times. The New York Times Company, 28 June 2005
8-Netflix. Comcast and Netflix Team Up to Provide Customers Excellent User Experience. Netflix. Netflix, 23 Feb. 2014. “Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Netflix, Inc. (Nasdaq: NFLX) today announced a mutually beneficial interconnection agreement that will provide Comcasts U.S. broadband customers with a high-quality Netflix video experience for years to come … terms of which are not being disclosed.”
9- Interstate Commerce Commission v. Baltimore & Ohio Railroad Co., 145 U.S. 263, 275 (1892) “the principles of the common law applicable to common carriers . . . demanded little more than that they should carry for all persons who applied, in the order in which the goods were delivered at the particular station, and that their charges for transportation should be reasonable.”
10-Brand X 2005
11-Telco 1996 sec. 3-49
12-Verizon 2014 p. 4
13-Verizon 2014 p. 4
14-Copps, Michael J. "From the Desk of a Former FCC Commissioner." Letter to Journalists. Feb. 2014. Columbia Journalism Review. N.p., 13 Feb. 2014 “While still a [FCC] commissioner, I went one day to visit the editorial page editor of a major newspaper. I had noticed an editorial chastising the excesses of big oil companies, and I urged the paper to run a similar critique about the excesses of big media. The response I got was a negative shake of the head and an explanation that the editor had complete freedom to cover any issue—except one. That issue was media ownership. I nearly fell through the floor ...”
15-Brand X 2005, Oral Argument, p. 15 “JUSTICE GINSBURG: What would be left in the common-carrier category?”
16-Verizon 2014 pp. 5-6
17-Hardin, Garrett. "Tragedy of Commons." Science 162.13 (1968): 1243-248
18-Verizon 2014 p. 35
19-Verizon 2014 pp.3-4
20-Hanson, Thomas J. "The Digital Commons – Left Unregulated, Are We Destined for Tragedy?" Editorial. Open Education. Creative Commons, 21 Feb. 2008 “Certainly consumers have to be pleased with the current digital commons. Today, when we sign on to the Internet we are able to access any information we want at the fastest available speed. Essentially we are also able to use any service we want at virtually whatever time we want to access it.... This fact is dubbed Net Neutrality and it forms the underlying basis of a free and open Internet system. The concept of Net Neutrality is deemed by many as the epitome of democracy because it is so consistent with anti-discrimination laws. Internet providers may not speed up the net for one class of citizens nor slow it for some other class. Content cannot be discriminated against based on who is the owner, the sender or the receiver. “
21-Copps: “The FCC that I joined had a different agenda. It had fallen as madly in love with industry consolidation, as had the swashbuckling captains of big media. The agency seldom met an industry transaction it didn’t approve. The Commission’s blessing not only conferred legitimacy on a particular transaction; it encouraged the next deal, and the hundreds after that. So Clear Channel grew from a 1970s startup to a 1,200-station behemoth.”
22-DISSENTING STATEMENT OF COMMISSIONER MEREDITH ATTWELL BAKER Re: Preserving the Open Internet, GN Docket No. 09-191, Broadband Industry Practices, WC Docket No. 07-52
23-"Biography of Former Commissioner Meredith Attwell Baker." FCC, n.d. Web. 01 Mar. 2014. <www.fcc.gov/leadership/meredith-attwell-baker>.
24-Baker Dissent, Open Internet Order 2010 p.180
25-Copps, “Gone are hundreds of once-independent broadcast outlets. In their stead is a truncated list of nationwide, homogenized, and de-journalized empires that respond more to quarterly reports than to the information needs of citizens."
26-Baker Dissent, Open Internet Order 2010 p.194
27-NBCUniversal. Meredith Attwell Baker, FCC Commissioner, to Join Comcast as Senior Vice President of Government Affairs, NBCUniversal. Comcast, 11 May 2011
30-Obama, Barack. "Obama: FCC Policies Must Encourage Media Ownership Diversity." Letter to Kevin Jeffrey Martin. 22 Oct. 2007. Barack Obama - U.S. Senator for Illinois. N.p., 22 Oct. 2007.
31-The White House. Office of the Press Secretary. Remarks by the President on Personnel Announcements. The White House President Barack Obama. Whitehouse.gov, 1 May 2013
32-Obama White House Remarks 2013
33-FCC. Statement by FCC Chairman Tom Wheeler on the FCC's Open Internet Rules. Federal Communications Commision. N.p., 19 Feb. 2014
34-See ref. 31
36-Statement by FCC Chairman Tom Wheeler on the FCC's Open Internet Rules.
Works Cited (Alphabetical):
Comcast. NBCUniversal. Meredith Attwell Baker, FCC Commissioner, to Join Comcast as Senior Vice President of Government Affairs, NBCUniversal. Comcast, 11 May 2011. Web. 25 Feb. 2014. <http://corporate.comcast.com/news-information/news-feed/meredith-attwell-baker-fcc-commissioner-to-join-comcast-as-senior-vice-president-of-government-affairs-nbcuniversal>.
Copps, Michael J. "From the Desk of a Former FCC Commissioner." Letter to Journalists. Feb. 2014. Columbia Journalism Review. N.p., 13 Feb. 2014. Web. 25 Feb. 2014. <http://www.cjr.org/essay/from_the_desk_of_a_former_fcc.php?page=all>.
FCC. Statement by FCC Chairman Tom Wheeler on the FCC's Open Internet Rules. Federal Communications Commision. N.p., 19 Feb. 2014. Web. 25 Feb. 2014. <http://www.fcc.gov/document/statement-fcc-chairman-tom-wheeler-fccs-open-internet-rules>.
Genachowski, Julius, Michael Copps, Mignon Clyburn, Robert McDowell, and Meredith Baker. Preserving the Open Internet, Broadband Industry Practices. Rep. no. FCC 10-201. FCC, 23 Dec. 2010. Web. 25 Feb. 2014. <http://www.fcc.gov/document/preserving-open-internet-broadband-industry-practices-1>.
Hansell, Saul. "Cable Wins Internet-Access Ruling." New York Times. The New York Times Company, 28 June 2005. Web. 27 Feb. 2014. <http://www.nytimes.com/2005/06/28/technology/28broadband.html>.
Hanson, Thomas J. "The Digital Commons – Left Unregulated, Are We Destined for Tragedy?" Editorial. Open Education. Creative Commons, 21 Feb. 2008. Web. 25 Feb. 2014. <http://www.openeducation.net/2008/02/21/the-digital-commons-%E2%80%93-left-unregulated-are-we-destined-for-tragedy/>.
Hardin, Garrett. "Tragedy of Commons." Science 162.13 (1968): 1243-248. Science. Web. 25 Feb. 2014. <https://www.sciencemag.org/content/162/3859/1243.full>.
NATIONAL CABLE & TELECOMMUNICATIONS ASSN. V.BRAND X INTERNET SERVICES (04-277) 545 U.S. 967 (2005). Supreme Court. 27 June 2005. Cornell Law School. Cornell Law School, n.d. Web. 27 Feb. 2014. <http://www.law.cornell.edu/supct/html/04-277.ZS.html>.
National Cable & Telecommunications Association v. Brand X Internet Services 04-277. Oral Arguments. Supreme Court. 29 Mar. 2005. Supreme Court of the United States. N.p., 29 Mar. 2005. Web. 27 Feb. 2014. <http://www.supremecourt.gov/oral_arguments/argument_transcripts/04-277.pdf>.
Netflix. Comcast and Netflix Team Up to Provide Customers Excellent User Experience. Netflix. Netflix, 23 Feb. 2014. Web. 27 Feb. 2014. <https://pr.netflix.com/WebClient/getNewsSummary.do?newsId=992>.
Obama, Barack. "Obama: FCC Policies Must Encourage Media Ownership Diversity." Letter to Kevin Jeffrey Martin. 22 Oct. 2007. Barack Obama - U.S. Senator for Illinois. N.p., 22 Oct. 2007. Web. 25 Feb. 2014. <http://web.archive.org/web/20080123075633/http://obama.senate.gov/press/071022-obama_fcc_polic/>.
"Obama: FCC Policies Must Encourage Media Ownership Diversity." Obama: FCC Policies Must Encourage Media Ownership Diversity. N.p., n.d. Web. 26 Feb. 2014. <http://www.freerepublic.com/focus/f-chat/2188635/posts>.
Verizon v. Federal Communications Commision. United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT. 15 Jan. 2014. United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT. United States Courts, n.d. Web. 25 Feb. 2014. <http://www.cadc.uscourts.gov/internet/opinions.nsf/5DFE38F28E7CAC9185257C610074579E/$file/11-1355-1475317.pdf>.
The White House. Office of the Press Secretary. Remarks by the President on Personnel Announcements. The White House President Barack Obama. Whitehouse.gov, 1 May 2013. Web. 28 Feb. 2014. <http://www.whitehouse.gov/the-press-office/2013/05/01/remarks-president-personnel-announcements>.