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Network Neutrality, Victory or Disappointment? | Part 2

This decision looks likely to set the pattern for ISP regulation in the U.S. for some time to come

In my last blog, I discussed the debate surrounding the true definition of open and unfettered Internet, and the different interpretations various groups and individuals have on the matter. In this posting, we continue the discussion.

The U.S. government has not enacted legislation to actually define and require Internet openness or to specify what level of non-openness is acceptable, if any. So openness is a concept without legal definition or backing, which means that individual opinions vary on what constitutes fettering and what doesn't. And attempts by the FCC to fill this gap with the Open Internet Order triggered this court action.

The debate, as constructed just now, offers two alternatives: Do ISPs have the right to manage Internet traffic preferentially, thus by most definitions fettering that traffic? Or do governments have the right to prevent ISPs from managing Internet traffic preferentially, thus clearly fettering the Internet by engaging in regulation of its players?

The FCC in the past has held the view that regulating the ISPs to prevent fettering is a lesser evil than allowing the ISPs to manage their traffic.

The recent U.S. federal court decision agreed with the ISPs that the FCC should not regulate ISP activity. Note that this decision is not based on the pros and cons of openness, but on the limits to the authority of the FCC. The court stated, "Our task as a reviewing court is not to assess the wisdom of the Open Internet Order regulations, but rather to determine whether the Commission has demonstrated that the regulations fall within the scope of its statutory grant of authority."

Whatever the reason, it seems that ISPs are now free to offer preferential quality of service to edge providers and edge providers are free to pay them money for the privilege.

What can happen next? Taking this to the U.S. Supreme Court is something that pro-neutrality advocates must be considering, but since the issue is not about neutrality, but rather FCC jurisdiction, the chances of success are likely to be slim.

What about a move to change the scope of FCC jurisdiction? This could be achieved by legislation that specifically defines Internet openness, makes it a legal requirement and empowers the FCC to oversee it. Not much chance of that happening anytime soon.

Alternatively, the FCC could make the case that Internet access should be defined as a common carrier service, which would make it subject to the same kind of oversight as traditional phone services. Judge Silberman in his (partially) dissenting opinion fears this possible consequence, while the New York Times encourages the FCC to go for it. Why the difference? Apparently Silberman dislikes government regulation more than he dislikes corporate manipulation of Internet traffic, while the New York Times just happens to take the contrary view. The divisions continue, and it seems that extending the jurisdiction of this FCC ruling in this way is not much more likely than new legislation.

Altogether, this decision looks likely to set the pattern for ISP regulation in the U.S. for some time to come, and we should start thinking about the implications it will have on the future. If we look closely, we may find that for the winners in this case, it may turn out not to be such a big deal after all, and those who view this as an unmitigated disaster may be relieved that it's not as bad as they feared.

If this decision stands, as seems likely, there are a number of possible repercussions to consider. In what ways will the ISP competitive landscape be transformed? How will edge providers respond? How does the role of applications change in a world in which fettering is normal, and how will that impact the software companies? Will there be a knock-on effect on the venerable institution of inter-ISP peering charges? And what will be the impact on the billing needs of all these players in a world made much more complex?

Leave a comment to let us know where you think these new developments will lead us.

More Stories By Esmeralda Swartz

Esmeralda Swartz is CMO of MetraTech, now part of Ericsson. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda is responsible for go-to-market strategy and execution, product marketing, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of OSS software, now part of Extreme Networks (Nasdaq:EXTR). At Avici Systems (Nasdaq:AVCI), Esmeralda was Vice President of Marketing for the networking pioneer from startup through its successful IPO. Early in her career, she was a Director at IDC, where she led the network consulting practice and worked with startup and leading software and hardware companies, and Wall Street clients on product and market strategies. Esmeralda holds a Bachelor of Science with a concentration in Marketing and International Business from Northeastern University.

You can view her other blogs at www.metratech.com/blog.

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