The Internet: Unblocking pipes

At first it looked like the FCC did a good thing for the Internet the other day, but after thinking about it for a while, I'm not at all clear that the action was as big a deal as it seemed to be.

A while back VoIP service provider Vonage complained to the FCC that Madison River Communications , a small, rural North Carolina telephone company operating also as an ISP, had inserted filters into its ISP network to block VoIP traffic. This meant that it was impossible for Vonage to offer VoIP service to customers of Madison River's Internet service.

The FCC investigated and discussed the accusations with Madison River, and the ISP quickly agreed to a consent decree. Under the agreement, Madison River pledged not to block VoIP traffic for at least 30 months and to make a "voluntary payment" of $15,000 to the FCC "in consideration for the termination" of the investigation of Vonage's accusations. The decree is backed up by an FCC order. Outgoing FCC Chairman Michael Powell issued a statement that patted the FCC on the back for its quick action.

The consent decree notes that the investigation into Madison River explored its compliance with Section 201(b) of the Communications Act of 1934, as amended . But the decree does not provide any legal finding that Madison River actually had violated the act. In other words, Madison River signed the paper and paid the money to get the FCC off its back, but no court has determined that Madison River did anything illegal.

At first it looked very good that the FCC had stepped in to stop an ISP from blocking the ability of its customers to purchase Internet-based services from whomever they wanted. But a closer reading finds a number of problems that removes most of the joy. The first problem already has been mentioned: There is no legal finding that blocking VoIP is wrong - that means a better-funded provider (and one that was not in the middle of an IPO) might just go ahead and test the precedent.

The second problem is that the resolution is VoIP-specific - the only thing that Madison River agreed not to block is VoIP. Under this consent decree, it can block anything else. This is nothing like the basic open pipes concept that people such as Stanford Professor Larry Lessig have pushed FCC to support .

The third problem is that the decree is of a limited duration. Madison River can start blocking again in 30 months. The fourth problem is that the act that the FCC referred to might not cover ISPs that are not part of a telephone company. Thus, non-telephone-company-based ISPs might be able to block specific applications at will under current laws

Many providers already are doing so under the excuse of blocking spam. Maybe both sides in this case did not want to know if the FCC actually has the authority to force open pipes in all ISPs - Madison River because the answer might be yes and the FCC because the answer easily could be no. It is still better that the FCC got someone to stop blocking in one specific case than having the FCC formally conclude that partially open Internet pipes are OK.

Disclaimer: Figuring out when it's best to actually answer a question is something that I hope is taught at both the Harvard law and business schools, but I did not check, and the above case study is my own.

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