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Legal Reality: Net Neutrality Turnaround

Legal Reality: Net Neutrality Turnaround

April 9, 2015
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" FCC Commissioner Tom Wheeler’s bold move was hailed by proponents of net neutrality and this advocate of freedom of expression. "

The net neutrality war is still far from over despite the Federal Communications Commission’s historic vote on Feb. 26 that approved a policy for an open Internet. Earlier last month, on Feb. 4, FCC Chairman Tom Wheeler announced new proposed regulations directed to reinstate net neutrality under the FCC’s authority to regulate telecommunications companies like Verizon, Comcast and AT&T as public utilities.

This was a major shift in his position from only a few months ago. And it is exactly what myself and others have advocated for years as a necessary and long overdue step to maximize the chances that net neutrality will not again be judicially terminated as it was last year.

For those not familiar with the concept of net neutrality, it is the principle that all types of data, regardless of type, source or destination, should be transported and delivered even handedly by broadband providers. In essence, net neutrality means broadband providers may not favor any particular bandwidth user or type of content by increasing or decreasing data transmission speeds for particular Internet-based services or companies. Net neutrality was ended last year by a federal judge in a case brought by Verizon Inc.

As a result, the requirement of even handed data transportation, which had been in place since the earliest days of the World Wide Web, disappeared, literally with a stroke of a pen.

Termination of net neutrality has been, in my opinion, a very troubling development that potentially endangers freedom of expression while concentrating the power to control communication into a handful of mega-corporations.

Simply put, the requirement that all traffic in a bandwidth provider’s pipes be treated the same way, regardless of who or what was generating the traffic, or how much traffic was involved, has provided a level playing field of unprecedented size, scope and intrinsic competitive fairness.

Net neutrality is one of the fundamental reasons why the Internet age has seen a gargantuan explosion of communication, artistic and political expression, business models and corresponding products and services that have transformed the day-to-day lives of most Americans.

The loss of net neutrality correspondingly risks the loss of equal access to what is rapidly becoming a unitarily converging medium of human communication. Putting it another way, with the diminishing impact of hard copy publications, and the migration of telephone communications to voice over IP, almost every form of communication other than those involving physical face to face meetings will soon directly involve the use of the Internet.

Because of our dependence on communication technology, putting that much control over what we see, hear and express into the hands of so few will present incalculable risks to freedom on a scale never before encountered by any human culture.

In one of my previous articles on the subject net neutrality published last year (“Legal Reality: Net neutrality Update”), I reported on the FCC’s published proposal that gutted its former net neutrality regulations by allowing broadband providers to negotiate individual agreements with edge providers, such as Netflix, for priority transmission and delivery of content. While the FCC indicated that it plans to scrutinize such individual agreements on a case-by-case basis and to prohibit practices it terms not to be “commercially reasonable,” I stated that there is no indication regarding what the commission will ultimately determine to be “commercially reasonable.”

Fortunately, a recent comment by Wheeler indicates that has come to realize the problems associated with regulation based on a “commercially reasonable” standard:

“Originally, I believed that the FCC could assure internet openness through a determination of “commercial reasonableness” under Section 706 of the Telecommunications Act of 1996. While a recent court decision seemed to draw a roadmap for using this approach, I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers.”

Wheeler’s statement above is in support of a new net neutrality proposal that he unveiled in an op-ed piece published in Wired on Feb. 4. The proposal was voted on, 3-2, by the full commission on Feb 26.

Now, with its approval, the new rules will effectively correct what myself and others have publicly characterized as a colossal blunder by the FCC in classifying telcos like Verizon, and Comcast as providers of “information services” (like Google and Yahoo) and not as providers of “telecommunication services” (like other providers of telephone services). It was the FCC’s classification of Verizon as an ISP that was at the heart of the court decision striking down net neutrality last year.

In that ruling the court focused on the fact that Congress empowered the FCC to broadly regulate telecommunication services as “common carriers” but that power does not extend to providers of information services.

In a previous article I called on the FCC to own up to its mistake and simply reclassify broadband providers as telecommunication service providers to establish the FCC’s clear authority to impose net neutrality rules on them. Even the court that struck down net neutrality implicitly invited the FCC to change the basis of its regulation of telcos like Verizon from providers of information services to providers of telecommunication services.

Well, in a stunning about face, Wheeler completely jettisoned his previous position preserving the view of telcos as information providers. He proposed that such companies be regulated by the FCC as telecommunication services providers.

The rules now accept the court’s invitation by declaring, what I believe should have been obvious from the beginning: the Internet is public utility.

In Sum the New Rules:

  • Ban providers from prioritizing or favoring some lawful Internet traffic, content or services over others in exchange for payment;
  • Ban the blocking of “legal content, applications, services, or nonharmful devices”; and,
  • Ban the “throttling” or impairment or degrading of lawful Internet traffic “on the basis of content, applications, services, or non-harmful devices.”

The new rules will also provide for a process known as “forbearance,” where the FCC will decline to impose certain types of industry regulations on ISPs such as tariffs or rate regulation. ISPs will also not be required to share their infrastructure with competitors. Under the rules, the application of a “just and reasonable” standard will allow the FCC to block actions that violate net neutrality principles.

Wheeler’s bold move was hailed by proponents of net neutrality and this advocate of freedom of expression. But his action alone will not, unfortunately, settle the matter.

The net neutrality war is, I am sorry to say, far from over. Within two days of Wheeler’s early February announcement, both CTIA (whose members include Verizon, AT&T and T-Mobile) and NTCA — The Rural Broadband Association met with the senior legal adviser to one of the FCC commissioners to oppose parts of Wheeler’s plan.

Also within days of Wheeler’s announcement, Sen. Rand Paul (R-Ky.) sent a letter to his supporters warning that “President Obama and the Federal Communications Commission are going to take over the Internet.”

He further blasted the administration’s position on net neutrality at the “Reboot Congress” conference stating that regulating ISPs as utilities “completely will stifle any innovation.”

Additionally, at least one FCC commissioner has already publicly blasted the chairman’s net neutrality plan. Republican Commissioner Ajit Pai, whose staffers met with CTIA on Feb. 3, characterized Wheeler’s plan as “worse than I imagined.”

The rapid and vitriolic response by the telcos and their Republican “representatives” clearly shows that, as expected, even with the FCC’s formal approval, the net neutrality war will still be far from over.

In the words of Winston Churchill describing another conflict to preserve freedom “this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” So in that spirit, I want to again reiterate my previously published opinion that the battle to re-establish net neutrality is a worthy one that needs to be joined by all those that love freedom and understand how it must be vigilantly and actively protected, especially when it comes to freedom of expression.

I also want to again remind all those providing adult entertainment content online that the net neutrality war provides the industry with a unique opportunity. Polls show that the general public overwhelmingly agrees with the notion of an even playing field for Internet access. Polls also show that reinstatement of net neutrality is strongly favored as the means to effectuate fair access to the web when the issue is properly explained.

Because of this, I believe that broad dissemination of the kind of public service announcement about the need to reinstate net neutrality could result in a groundswell of public opinion that could head off congressional action to undo reinstatement by the FCC. If nothing else, even a link on a site to the YouTube video referred to above could be very helpful.

In addition, an effective broad-based campaign on adult websites to restore and preserve net neutrality could go a long way to demonstrate that adult traffic can be effectively politically purposed. I have long believed that because of the popularity of adult content, the online adult industry is a vast reservoir of untapped political power that can be brought to bear to further its interests.

To date, the industry has not been able to demonstrate that it can politically capitalize on the number of its consumers largely because it has not been able to mount a message campaign that would resonate with the general public while at the same time, advance the interests of large numbers of individual entrepreneurs involved. The net neutrality issue provides an unprecedented intersection of industry and public interests.

I strongly suggest that the online adult entertainment business seize this moment and capitalize on the opportunity to demonstrate that it has the ability to have a political impact. Moreover, championing a popular issue also provides an opportunity to elevate the stature of the industry in the public’s eye.

So please, if you haven’t already, get involved to reinstate and preserve net neutrality. Comments to the FCC can be sent to FCC.gov/comments.

If you would like assistance wording a suggested net neutrality message for your website or if you would like a model comment to submit to the FCC or to congressional representatives, please feel free to contact me at the email address below. I would be glad to provide you with either or both. For more information regarding the battle over net neutrality and the importance of the issue to the adult entertainment industry, I also invite you to read my three previous articles published on the XBIZ website ("Legal Reality: Warning! Net Neutrality is Terminated — This is Not a Test", "Legal Reality: Net Neutrality Update", and "Legal Reality: Get Off Your Butt and Email the FCC Now").

This article is not intended to be, nor should it be considered to be, legal advice. If you have a legal question or other matter related to any of the topics discussed in this article, I strongly urge you to contact our office at the number below or seek the counsel of another qualified and experienced entertainment attorney familiar with the legal matters discussed in this article.

Gregory A. Piccionelli is an intellectual property attorney specializing in entertainment matters. He can be reached at Piccionelli & Sarno at (818) 201-3955 or greg@piccionellisarno.com.


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