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Court decision, like the FCC, overreaches

Guest Column By , special to Network World
January 14, 2014 06:21 PM ET
John Cox
net neutrality

Network World - I'm not sure why some "net neutrality" advocates are so upset about the D.C. Circuit Court of Appeals decision in Verizon vs FCC. But I'm quite sure that the vast majority of American broadband users are going to keep texting, Skyping, surfing, streaming, tweeting and Facebooking without a qualm for the future.

The two-judge majority gave netneuts the most important thing of all: authority. All three judges agreed that the broadband providers could not, based on existing law (specifically Chapter 706 of the Telecommunications Act of 1996), be regulated as “common carriers.” But the majority went on to elaborate a not-very-well-thought-out rationale by which, apparently, the FCC can retool its Open Internet Order rules and impose them anyway, all on its own. Netneuts should be celebrating: the majority’s reading gives the FCC virtually unlimited power to write almost any rules it wants for the Internet.

That’s not my opinion (although I agree with it). It’s the opinion of the third judge, Senior Circuit Judge Silberman, whose comments near the end of the opinion (in a partial concurrence and partial dissent) are a succinct and lucid critique not only of the FCC’s argument, at once contorted and hollow, but also of the assumptions underlying “net neutrality.”

+ ALSO ON NETWORK WORLD Counterpoint: Net neutrality decision sells consumers out to the ISPs | Appeals court strikes down FCC's net neutrality rules +

The chief problem with the FCC’s order is that there is no such thing as net neutrality. As Silberman concludes: “This regulation essentially provides an economic preference to a politically powerful constituency, a constituency that, as is true of typical rent seekers, wishes protection against market forces. The Commission does not have authority to grant such a favor.”

Exactly so. In being “neutral,” net neutrality in fact grants preference to a favored few, who happen to have very deep pockets. The history of capitalism in America is the history of capitalists trying to avoid real capitalism -- with its “creative destruction” and possibility of, you know, failure --  by conspiring with oh-so-willing politicians to create something like mercantilism: a bunch of rent seekers who rely on favors, and the politicians who grant them.

net neutrality

Silberman agrees that 706 grants positive regulatory authority to the FCC, but “it doesn’t come close to sanctioning the Commission’s [Open Internet] regulation.”

Silberman: The statute directs the Commission to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans…by utilizing…price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment."

The words that actually grant the authority, he says, are “measures that promote competition in the local telecommunications market or other regulating methods that remove barriers to infrastructure investment.”

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