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DC Circuit court rules in Comcast case, leaves the FCC a job to do

Today’s ruling in Comcast v. FCC will certainly change the
terms of debate over network neutrality, but the win for Comcast is
not as far-reaching as headlines make it appear. The DC Circuit court
didn’t say, “You folks at the Federal Communications Commission have
no right to tell any Internet provider what to do without
Congressional approval.” It said, rather, “You folks at the FCC didn’t
make good arguments to prove that your rights extend to stopping
Comcast’s particular behavior.”

Gov 2.0 Expo 2010
I am not a lawyer, but to say what happens next will take less of a
lawyer than a fortune-teller. I wouldn’t presume to say whether the
FCC can fight Comcast again over the BitTorrent issue. But the court
left it open for the FCC to try other actions to enforce rules on
Internet operators. Ultimately, I think the FCC should take a hint
from the court and stop trying to regulate the actions of telephone
and cable companies at the IP layer. The hint is to regulate them at
the level where the FCC has more authority–on the physical level,
where telephone companies are regulated as common carriers and cable
companies have requirements to the public as well.

The court noted (on pages 30 through 34 of its
order
) that the FCC missed out on the chance to make certain
arguments that the court might have looked on more favorably.
Personally and amateurly, I think those arguments would be weak
anyway. For instance, the FCC has the right to regulate activities
that affect rates. VoIP can affect phone rates and video downloads
over the Internet can affect cable charges for movies. So the FCC
could try to find an excuse to regulate the Internet. But I wouldn’t
be the one to make that excuse.

The really significant message to the FCC comes on pages 30 and 32.
The court claims that any previous court rulings that give power to
the FCC to regulate the Internet (notably the famous Brand X decision)
are based on its historical right to regulate common carriers (e.g.,
telephone companies) and broadcasters. Practically speaking, this
gives the FCC a mandate to keep regulating the things that
matter–with an eye to creating a space for a better Internet and
high-speed digital networking (broadband).

Finding the right layer

Comcast v. FCC combines all the elements of a regulatory
thriller. First, the stakes are high: we’re talking about who
controls the information that comes into our homes. Second, Comcast
wasn’t being subtle in handling BitTorrent; its manipulations were
done with a conscious bias, carried out apparently arbitrarily (rather
than being based on corporate policy, it seems that a network
administrator made and implemented a personal decision), and were kept
secret until customers uncovered the behavior. If you had asked for a
case where an Internet provider said, “We can do anything the hell we
want regardless of any political, social, technical, moral, or
financial consequences,” you’d choose something like Comcast’s
impedance of BitTorrent.

And the court did not endorse that point of view. Contrary to many
headlines, the court affirmed that the FCC has the right to
regulate the Internet. Furthermore, the court acknowledged that
Congress gave the FCC the right to promote networking. But the FCC
must also observe limits.

The court went (cursorily in some cases) over the FCC’s options for
regulating Comcast’s behavior, and determined either that there was no
precedent for it or (I’m glossing over lots of technicalities here)
that the FCC had not properly entered those options into the case.

The FCC should still take steps to promote the spread of high-speed
networking, and to ensure that it is affordable by growing numbers of
people. But it must do so by regulating the lines, not what travels
over those lines.

As advocates for greater competition have been pointing out for
several years, the FCC fell down on that public obligation. Many trace
the lapse to the chairmanship of Bush appointee Michael Powell. And
it’s true that he chose to try to get the big telephone and cable
companies to compete with each other (a duopoly situation) instead of
opening more of a space for small Internet providers. I cover this
choice in a 2004
article
. But it’s not fair to say Powell had no interest in
competition, nor is it historically accurate to say this was a major
change in direction for the FCC.

From the beginning, when the 1996 telecom act told the FCC to promote
competition, implementation was flawed. The FCC chose 14 points in the
telephone network where companies had to allow interconnection (so
competitors could come on the network). But it missed at least one
crucial point. The independent Internet providers were already losing
the battle before Powell took over the reins at the FCC.

And the notion of letting two or three big companies duke it out
(mistrusting start-ups to make a difference) is embedded in the 1996
act itself.

Is it too late to make a change? We must hope not. Today’s court
ruling should be a wake-up call; it’s time to get back to regulating
things that the FCC actually can influence.

Comcast’s traffic shaping did not change the networking industry. Nor
did it affect the availability of high-speed networks. It was a clumsy
reaction by a beleaguered company to a phenomenon it didn’t really
understand. Historically, it will prove an oddity, and so will the
spat that network advocates started, catching the FCC in its snares.

The difficulty software layers add

The term “Internet” is used far too loosely. If you apply it to all
seven layers of the ISO networking model, it covers common carrier
lines regulated by the FCC (as well as cable lines, which are subject
to less regulation–but still some). But the FCC has historically
called the Internet a “service” that is separate from those lines.

Software blurs and perhaps even erases such neat distinctions. Comcast
does not have to rewire its network or shut down switches to control
it. All they have to do is configure a firewall. That’s why stunts
like holding back BitTorrent traffic become networking issues and draw
interest from the FCC. But it also cautions against trying to regulate
what Comcast does, because it’s hard to know when to stop. That’s what
opponents of network neutrality say, and you can hear it in the court
ruling.

The fuzzy boundaries between software regulation and real-world
activities bedevils other areas of policy as well. Because
sophisticated real-world processing moves from mechanical devices into
software, it encourages inventors to patent software innovations, a
dilemma I explore in another
article
. And in the 1990s, courts argued over whether encryption
was a process or a form of expression–and decided it was a form of
expression.

Should the FCC wait for Congress to tell it what to do? I don’t think
so. The DC Circuit court blocked one path, but it didn’t tell the FCC
to turn back. It has a job to do, and it just has to find the right
tool for the job.

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  • Benjamin Smedberg

    Or of course, congress could just explicitly clarify whether they wish to give the FCC the power to regulate internet providers in this way.

  • Dave

    It’s the seven layers of the OSI Networking Model.

    Obviously you have never studied for a networking certification or you would have known better.

    http://www.javvin.com/osimodel.html

  • Andy Oram

    Dave: Thanks for the correction. The ISO is the organization that developed the OSI model, so it’s an easy slip to make when someone is writing fast to get out an idea when news is hot. You’re right: I haven’t gotten a networking certification and I don’t plan to apply for networking jobs.

    Benjamin: You also have a reasonable point, and I know that some congresspeople like Senator Al Franken have talked about submitting legislation–but how long would that take and how many barriers would it have to pass, and how successful could laws be at distinguishing the abuses that require regulation from normal activities that networks need?