Tag Archives: net neutrality

FCC Chair Approves Strong Net Neutrality Rules

On February 4, 2015, Federal Communications Commission Chair Tom Wheeler unveiled his plan to ensure net neutrality in a Wired magazine op-ed.  On February 26, 2015, the FCC voted to approve the strong net neutrality rules.

Wheeler agreed with President Obama’s proposal to regulate Internet traffic as a public utility, but he went a step further. He proposed utilizing the FCC’s Title II powers under the Telecommunications Act to “ban paid prioritization, and the blocking and throttling of lawful content and services (and)… to fully apply-for the first time ever-those bright-line rules to mobile broadband.”

Wheeler’s plan would also “for the first time give the F.C.C. enforcement powers to police practices in the marketplace for the handling of data before it enters the gateway network into people’s homes – the so-called interconnect market. For good measure, he added a ‘future conduct’ standard to cover unforeseen problems.”

Although the FCC’s ruling comes as a victory in maintaining the openness and level playing field in providing Internet services, it remains to be seen whether this ruling will be challenged in court, or whether new legislation will be introduced in an attempt to ‘gut’ the FCC’s ruling.
In a related matter, on February 20, a bi-partisan bill was introduced to the Senate that would permanently ban taxes on high-speed Internet service to American customers. A similar bill passed the House of Representatives last year.

Anna Vradenburgh is a well-respected, business-minded expert in intellectual property issues. As a patent attorney licensed to practice before the United States Patent and Trademark Office, Anna assists clients in patent and trademark prosecution, and represents clients in trademark opposition matters, domain name dispute matters, and patent and trademark litigation. Anna can also assist your company in all manner of intellectual property protection. For more information, visit her website, or contact Anna at (818) 946-2300. This article is for educational purposes only and nothing in this article is intended to be, nor should be considered legal advice.

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Effects of Lack of Net Neutrality Rules

Net neutrality is the aspirational concept that the Internet should be free and open to all of its users.   Advocates for net neutrality believe networks such as Comcast, AT&T and other Internet service providers which offer online access to millions of Americans should be treated as common carriers, the traditional role held by phone companies and railroad companies, which have to provide their services in a nondiscriminatory fashion to all consumers.  But, as indicated in the article, “Circuit Court Strikes Down Net Neutrality Rules” heading this newsletter, the net neutrality rules in place by the FCC must be revisited.

What this ruling might mean for consumers must be viewed in light of two recent deals pursued by Comcast, the leading cable television company in the nation.   Specifically, the deals involve a proposed merger with its closest competitor, Time Warner Cable and a content use arrangement with Netflix potentially providingComcast with the opportunity to access its voluminous video content directly from its servers.  This ostensibly would allow. Comcast users the ability to receive faster downloads from Netflix than non-Comcast customers.  To the extent that Comcast continues to serve a larger share of the country’s Internet users, it can ultimately elect to increase the cost for consumers to obtain higher quality content more quickly.  Consumers who choose to purchase Internet service from less expensive providers may either be unable to access certain content at all, or not be able to access it with speed.

Further, as Comcast owns NBC Universal, some have speculated that it might be able to offer NBC’S content to customers at rates that are lower than many of its competitors.  If so, it would not be surprising if we soon see other content providers attempting to form distribution arrangements that are similarly competitive distribution arrangements.   Currently, the situation remains in flux.  The net result, no pun intended, is that consumers’ content delivery choices may eventually effectively be constricted, perhaps to a two-tier pricing structure where content will be available at an increased cost for faster online delivery.

Even more concerning is the possibility that if net neutrality is not restored, consumers may be faced with the situation that only those that get Internet service from the giant ISPs, like Comcast, will readily have access to premium and more desirable content.  Moreover, if the percentage of consumers receiving Internet access from giant ISPs like Comcast continues to increase, it will likely result in increasing difficulty for providers of less popular content to market their content without a favorable arrangement with one of the large ISPs.   Thus, if net neutrality is not restored, content providers may soon face a distribution environment that discourages video producers, writers and artists without influential connections from producing innovative content because of significant ISP-created barriers reducing the likelihood that such content will ever be viewed.

While it appears to be dead for the moment, the FCC has vowed to take steps to resurrect net neutrality in some form.   Many of the concerns now being loudly expressed by content providers, free speech advocates and some consumer groups may ultimately be unrealized.  Therefore, we will have to wait and see what the FCC ultimately does.

Attorney Anna M. Vradenburgh counsels and represents clients regarding trademark, copyright, patent and other intellectual property issues, providing expert advice regarding intellectual property protection, exploitation and rights enforcement.  To discuss your particular matter with Ms. Vradenburgh, please contact her at the Eclipse Group, located at 6345 Balboa Blvd, Suite 325, Encino, California 91316, by calling (818) 488-8146 or going to her website or her profile on LinkedIn.  This article is not intended to be, nor should it be considered to be, legal advice.
Net Neutrality Rules

Circuit Court Strikes Down Net Neutrality Rules – Perspective

For several years now, an extremely consequential debate concerning net neutrality rules has pitted the freedom to equally access information on the Internet against the right of broadband providers to set prices for, and otherwise control, the bandwidth and Internet connectivity services as they choose.  Net neutrality refers to the notion that the web should be free and open so that users have unimpeded access to any service or application without Internet service providers (ISPs) imposing restrictions or bans on such access.

By statute, the Federal Communications Commission (FCC) is authorized to regulate “all interstate and foreign communications by wire or radio.”  Internet communications, therefore, fall within the jurisdiction of the FCC.   Through the Open Internet Order of 2010, the FCC established net neutrality rules on broadband providers, including disclosure, anti-blocking and anti-discrimination rules, in an effort to prevent companies, which provide access to the Internet, from discriminating against different content providers.  The FCC feared that broadband providers would grant preferential treatment to some influential content providers at the expense of new startups and smaller companies, which would struggle to compete in such an environment wherein established providers have reinforced brand advantages.  In this type of environment, some content might become slower to access, become inaccessible or simply cost more to access.

Pursuant to Title II of the Communications Act of 1934, the FCC is granted broad authorization to regulate “common carriers”, such as telephone companies.  Under this authority, the FCC could vigorously regulate the telephone companies, including mandating that all telephone calls made on its network be allowed, and further, regulating the rates that could be charged.   The rules set forth in 2010 by the FCC seem to reflect the exercise of this broad authority.   However, this broad regulatory power applies specifically to “common carriers.”  In 1996, Congress enacted The Telecommunications Act of 1996, which defines two types of entities: telecommunications carriers, which are classified as common carriers; and information services providers, which do not fall within that category.

In Verizon v. FCC, No. 11-1355 (D.C Cir Ct. App. 2014), Verizon Wireless sued the FCC claiming the regulatory body lacked the authority to regulate how their company offers content to its customers.  Verizon argued that the FCC could not subject it to the same regulations which governed utilities, such as telephone carriers, like AT&T and the Baby Bells in previous decades.  Verizon contended that anti-blocking and anti-discrimination rules, as applied to the telephone companies in years past, should not apply to them as they fall outside the category of “common carriers” because of the FCC’s prior categorization of Verizon and similar bandwidth providers as information service providers and not as telecommunications carriers.

The DC Circuit Court of Appeals agreed with Verizon’s position and ruled that while the FCC did have some authority under Section 706 of The Telecommunications Act of 1996 to regulate traffic on the Internet, the scope of its regulatory power did not extend to the implementation of the anti-blocking and anti-discrimination rules set forward in the FCC’s Open Internet Order of 2010, the directive which implemented the net neutrality approach.  In some respects, the FCC was hoisted on its own petard, or its prior leadership’s petard, with respect to whether these internet companies can be correctly analogized to the telephone companies of decades past.  The DC Circuit Court relied on the FCC’s decision in 2002 that Internet service providers were not a telecommunications carrier, but rather, an information service provider.  This self-classification limits the F.C.C.’s authority, according to the DC Circuit Court of Appeals.

While Verizon did win this particular battle, the DC Circuit Court of Appeals did offer the FCC some room to maneuver.  It noted, making an obvious analogy between the Internet and railroads, that “Railroads have no obligation to allow passengers to carry bombs on board, nor need they allow passengers to stand in the aisles if all seats are taken. It is for this reason that the Communications Act bars common carriers from engaging in “unjust or unreasonable discrimination, not all discrimination.”

The DC Circuit Court’s decision provides the FCC the chance to rewrite regulations that fall within the limited authority they were granted by Congress via the 1996 Telecommunications Act to encourage innovation and growth of the Internet.  In this regard, the FCC can seek to find a middle ground, which permits Internet service companies to allow some content providers to charge customers for special content, while keeping the information and services available on the Internet open to everyone. The question remains what kind of regulation is, using the railroad analogy, just and reasonable.

Further, the FCC can revisit its decision in 2002, which exempted the Internet from greater regulation as if Internet service providers were a utility.  Ostensibly, the FCC could attempt to reclassify broadband service providers as a utility so as to subject them to greater regulation.  From statements made by the current head of the FCC, Tom Wheeler, the Commission intends to first see if it can redraft some net neutrality rules that do not run afoul of the DC Circuit Court’s decision.  He has not, although, foreclosed the possibility of reclassifying these companies as common carriers to essentially enhance the scope of its own regulatory powers.

Accordingly, for content based businesses, such as, for example, Netflix, if the current regulations remain in force, these businesses could be subject to discriminatory treatment by the service providers.  For instance, preferential treatment could be granted to those companies willing to pay higher fees in exchange for allowing their customers faster access to their content.  Or, companies like Netflix, might refuse to pay, and be disadvantaged by slower transmission of content to its customers.  Ultimately, the end consumer could be paying higher fees for some preferred content.

Attorney Anna M. Vradenburgh counsels and represents clients regarding trademark, copyright, patent and other intellectual property issues, providing expert advice regarding intellectual property protection, exploitation and rights enforcement.  To discuss your particular matter with Ms. Vradenburgh, please contact her at the Eclipse Group, located at 6345 Balboa Blvd, Suite 325, Encino, California 91316, by calling (818) 488-8146 or going to her website or her profile on LinkedIn.  This article is not intended to be, nor should it be considered to be, legal advice.
Net Neutrality