A federal court threw the future of internet regulations and U.S. broadband expansion plans into doubt April 6 with a far-reaching decision that went against the Federal Communications Commission (FCC). The ruling poses a major hurdle for federal policy that school and college administrators hoped would ensure the growth of online education and make high-speed internet affordable for even the smallest school systems and campuses.
The U.S. Court of Appeals for the District of Columbia ruled that the FCC lacks the authority to require broadband providers to give equal treatment to all internet traffic flowing over their networks. That was a big victory for Comcast Corp., the nation’s largest cable company, which had challenged the FCC’s authority to impose such “net neutrality” obligations on broadband providers.
The ruling marks a serious setback for the FCC, which is trying to adopt official net-neutrality regulations. FCC Chairman Julius Genachowski, a Democrat, argues that such rules are needed to prevent phone and cable companies from using their control over internet access to favor some online content and services over others.
Education technology advocates have said that without net-neutrality rules, the price of online learning eventually could prove untenable for students. If broadband providers are left unchallenged, they say, the price of web access could skyrocket in coming years, discouraging students from taking web-based courses and making it impossible for smaller schools to compete in the online-learning market.
“The more time a student spent online, the higher [his or her] internet bill would be,” said Larry Johnson, CEO of the Texas-based New Media Consortium, an international coalition of universities, colleges, libraries, and technology companies. “It would come to a point … where [students] wouldn’t want to do distance learning anymore.”
In interviews with eSchool News over the past year, education decision makers said failure to pass net-neutrality regulations would mean the country’s largest universities could pay telecommunications companies for preferential treatment, while small colleges with smaller bank accounts would be at a distinct disadvantage.
Only 16 percent of the 3,439 community college campuses in the U.S. have access to the kind of high-speed internet service that is available at more than 90 percent of research universities, according to the FCC.
A group of more than 20 open internet and consumer advocacy organizations sent a letter to Genachowski Oct. 21 that said more than 1.6 million Americans have declared their support for net-neutrality laws.
“They do not want the internet to become just another closed network where large media entities pick winners and losers, like broadcasting and cable,” the letter said.
The decision also has serious implications for the massive national broadband plan released by the FCC last month. The FCC needs clear authority to regulate broadband in order to push ahead with some of its key recommendations, including a proposal to expand broadband by tapping the federal fund that subsidizes telephone service in poor and rural communities.
In a statement, the FCC said it remains “firmly committed to promoting an open internet and to policies that will bring the enormous benefits of broadband to all Americans” and “will rest these policies … on a solid legal foundation.”
Markham Erickson, executive director of the Open Internet Coalition—which includes web giants like Google, YouTube, Facebook, and the education technology organization EDUCAUSE—said in an April 6 statement that the court decision means the FCC is “now unable to police the internet against anti-competitive and anti-consumer behavior by broadband providers” and could endanger the agency’s national broadband plan, which has broad support among educators.
“Today’s D.C. Circuit decision … creates a dangerous situation, one where the health and openness of the internet is being held hostage by the behavior of the major telco and cable providers,” Erickson said.
Comcast had no immediate comment.
The court case centered on Comcast’s challenge of a 2008 FCC order banning the company from blocking its broadband subscribers from using an online file-sharing technology known as BitTorrent. The commission, at the time headed by Republican Kevin Martin, based its order on a set of net-neutrality principles it adopted in 2005 to prevent broadband providers from becoming online gatekeepers of content flowing over their lines. Those principles have guided the FCC’s enforcement of communications laws on a case-by-case basis.
But Comcast argued that the FCC order was illegal because the agency was seeking to enforce mere policy principles, which don’t have the force of regulations or law. That is one reason Genachowski is now trying to formalize those rules.
The cable company also had argued that the FCC lacks authority to mandate net neutrality because it had deregulated broadband under the Telecommunications Act of 1996, a decision upheld by the Supreme Court in 2005.
The FCC now defines broadband as a lightly regulated information service. That means it is not subject to the obligations that traditional telecommunications services have to share their networks with competitors and treat all traffic equally. But the agency argues that existing law gives it the authority to set rules for information services, including net-neutrality rules.
This most recent court decision rejected that reasoning, concluding that Congress has not given the FCC “untrammeled freedom” to regulate services without explicit legal authority.
With so much at stake, the FCC now has several options. It could ask Congress to give it explicit authority to regulate broadband. Or, it could appeal the decision to the Supreme Court.
But both of those steps could take too long, because the agency “has too many important things they have to do right away,” said Ben Scott, policy director for the public interest group Free Press. Free Press was among the groups that alerted the FCC to Comcast’s behavior after the Associated Press ran tests and reported that the cable company was interfering with attempts by some subscribers to share files online.
The more likely scenario, Scott believes, is that the agency will simply reclassify broadband as a more heavily regulated telecommunications service. And that, ironically, could be the worst-case outcome from the perspective of the phone and cable companies, he noted.
“Comcast swung an ax at the FCC to protest the BitTorrent order,” Scott said. “And they sliced right through the FCC’s arm and plunged the ax into their own back.”
The battle over the FCC’s legal jurisdiction comes amid a larger policy dispute over the merits of net neutrality. Backed by internet companies such as Google and the online calling service Skype, the FCC says rules are needed to prevent phone and cable companies from prioritizing some traffic or degrading or blocking cheaper internet calling services or online video sites that compete with their core businesses. Indeed, BitTorrent can be used to transfer large files such as online video, which could threaten Comcast’s cable TV business.
Net-neutrality opponents lauded the appeals court’s unanimous decision. Jim Harper, director of information policy studies at the Cato Institute, a conservative think tank in Washington, D.C., called the ruling a “turning point in the debate over whether the federal government should regulate internet access services” and said web policy should be determined by “market processes.”
“The FCC’s ‘net neutrality’ hopes are nothing more than public utility regulation for broadband,” Harper said in a statement. “If they get that authority, your online experience will be a little more like dealing with the water company or the electric company and a little less like using the internet.”
In public meetings beginning last fall, FCC commissioners have laid out the case for government intervention in expanding web access to all Americans. Michael Copps, a Democratic FCC commissioner, said that not every telecommunications company would charge exorbitant fees for web access if net-neutrality rules weren’t passed, but some corporations would take advantage of the lack of regulation.
“I’m not into riverboat gambles that everything will be fine if we just look the other way,” Copps said. “The potential power of this technology is awesome. It can do so much good. Misused, it can fail itself and fail us all.”
Broadband providers such as Comcast, AT&T Inc., and Verizon Communications Inc. argue that after spending billions of dollars on their networks, they should be able to manage their systems to offer premium services and prevent high-bandwidth applications such as BitTorrent from hogging capacity and slowing the network for everyone else.
For its part, the FCC offered no details on its next step other than to stress that it remains committed to the principle of net neutrality.
“Today’s court decision invalidated the prior commission’s approach to preserving an open internet,” the agency’s statement said. “But the court in no way disagreed with the importance of preserving a free and open internet; nor did it close the door to other methods for achieving this important end.”
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