Net Neutrality Gets Its Day In Court, But Does It Matter Anymore?

September 9th, 2013 by · 3 Comments

Remember when the FCC laid down the law on net neutrality, and many said that as weak as it was it still likely wouldn’t survive a court challenge? Well that challenge took its usual scenic route through the legal system but has now arrived at long last. 

Verizon’s lawsuit against the FCC’s net neutrality rules finally goes before a panel of judges today, claiming the agency overstepped its authority. Yet despite the near total lack of agreement between the two sides on the issue, the regulations the FCC laid down have done a remarkable job of keeping the peace in the short term.

However, the current implementation of net neutrality mostly just kicked the can a bit further down the road. The hope was that a more permanent solution would emerge and gain a consensus, or for the cynical it was that the problem would at least land on someone elses desk.  Obama is still in charge of course, but note that the FCC Chairman’s desk does indeed have a new name on it.

But the world of technology evolves more rapidly than regulation, and so today’s world of data is a brand new ballgame. Much of today’s high profile data traffic is delivered over the wireless last mile, which wasn’t even included in net neutrality regs. Yet the fears of both sides (‘our business model will collapse’ versus ‘the death of freedom itself’) haven’t come to fruition there.

I think it is likely that Verizon will gain at least a partial victory here, which will be appealed of course, eventually leading to another big regulatory brawl between the last mile operators and public interest groups. But operationally, perhaps we are beyond the point where either can roll back the clock. Public expectations have been set when it comes to actually restricting data, and pricing plans have evolved to include at least some linkage between traffic and revenue.

Additionally, despite all the consolidation wireless is a more competitive world than wireline, and looks to get more competitive in the years to come. The more of the internet’s traffic that goes over wireless data networks, the less likely it seems that on the wireline side we’re going to need so many special rules to prevent abuse.

Categories: Government Regulations · Internet Traffic

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3 Comments So Far


  • COST CAUSATION LOVER says:

    Rob, I completely disagree that this battle is so 2011 and no longer relevant.

    You make a strange connection between surging mobile internet use and net neutrality irrelevance as if to suggest that the growth in mobile internet means
    non-mobile (fixed line) internet and data traffic volume is declining and, therefore, regulators are solving yesterday’s problem.

    Fixed line internet traffic has not declined, it has merely grown at a slower rate than mobile. Of course, fixed line data traffic is growing off a much larger per capita usage base than mobile.

    Most importantly, on the mobile front VZ and ATT have taken a cost causation posture on mobile data with their pricing plans that charge end users by the Gbit. Even T-mobile’s data plans, for all its rebel cries, has usage sensitive plans. Of the NA major mobiles only Sprint truly offers an unlimited data package.

    But on the fixed line front, usage sensitive rates have not been tried successfully in any meaningful way. This net neutrality battle is far from over. The more successful, for example, Netflix, Youtube and AppleTV become the more intense the battle will be.

    Today, netflix competes more effectively against Comcast’s suite of products for customer wallet share than ever before.

    Comcast, ATT and Verizon previously believed that content providers like youtube, netflix and others were free riding. Exactly what has changed? Nothing.

    ATT, VZ and Comcast, the eyeball owning network operators (EONOs), would like nothing more than the creation of a content access structure, just like the old switched access (voice) structure. This insulates the EONOs from new entrants by permitting them to keep end user rates down while collecting fees from content providers.

    This fight is hardly over, it’s merely a respite for the big fight that will almost certainly take place.

  • Rob,

    I have to take issue with your statement, “wireless is a more competitive world than wireline, and looks to get more competitive in the years to come.”

    AT&T and VZN have almost 70% of the market, how is that competitive? If you’re like me and need “real” coverage when you travel around the US and world then there are only those two choices. I agree that hopefully Sprint and T-Mobile will improve things but as up today it is basically a duoapoly.

    All this noise about “competition” and “scarcity” about spectrum is all designed to sway public opinion and let these guys continue to gorge consumers. We pay significantly more than comparable service in Asia or Europe.

    This is about VZN/AT&T, and the cable guys, figuring out how they can force Google and Netflix to pay them to send traffic to their eyeballs even though us eyeballs already pay for the privilege.

  • COST CAUSATION LOVER says:

    Appeals court ruling on Net Neutrality.

    Brutal blow to the net neutrality crew (i.e., the content providers)…If you listen real closely you can hear the wooshing of air out of NFLX flying bubble. When this news is digested, watch that baby drop.

    As noted in many posts including the one above on Sept 9, 2013, this battle is far from over.

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