Breaking Down Verizon v. FCC

Verizon v. FCC

Ok, I’m calling it… It’s officially a bad week for mobile users in Canada and the USA.

Earlier this week WIND Mobile surprised everyone by pulling out of Canada’s 700MHz spectrum auction a day before it started. As I was gathering my thoughts on that, another bombshell was dropped south of the border: a U.S. Appeals Court invalidated net neutrality rules set by the FCC.

This decision has potentially dire implications for both broadband and wireless Internet users in America, and beyond. But first, we need to understand exactly what happened…


Before even that we need to make sure that we’re all on the same page with some basic concepts. The premise of net neutrality is fairly simple: all data on the Internet should be treated equally, without any discrimination for type, source or user.

Where net neutrality applies specifically to the Internet, the very similar concept of common carriage, insofar as it pertains to telecom in the USA, dates back to the FCC’s Communications Act of 1934.

Critically, while common carriage and net neutrality are similar ideas, they are subject to notably different legislation in the United States.

Just The Facts

What we’re discussing here is The U.S. Court of Appeals ruling on Case  No. 11-1355, Verizon v. FCC.

In 2011 Verizon filed their legal challenge to the FCC’s 2010 Open Internet Order. From this very helpful CNET FAQ, the FCC regulations stipulate that (1) broadband providers, whether fixed-line or wireless, must be open and transparent to their customers, and (2) they are prohibited from blocking lawful content on their networks.

Verizon argued that these rules violated their First Amendment rights, and that the FCC had no authority to impose them in the first place.

The Appeals Court decision actually upholds the FCC’s authority to regulate broadband wireless providers, but at the same time points to a flaw in the agency’s classification of such. From the ruling:

Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.

(This is the quote that most of the big tech blogs are using; I got mine from Gizmodo…)

In other words, a legal loophole means that  Internet providers are no longer accountable to the common carrier legislation that’s been on the books since the 1930s.

Trouble Ahead

Net neutrality certainly isn’t dead, but its future is uncertain. Harbingers of a two-tiered Internet are easy to find: AT&T is currently entertaining the idea of sponsored data on mobile phones, and on the flip-side of the coin Netflix and YouTube could now suffer at the hands of your ISP and/or carrier.

Canada is not far behind… There’s Ben Klass’s complaint to the CRTC about Bell violating Net Neutrality with its mobile TV app. And rumours abound that Rogers is planning a Netflix clone, with a two-tiered Internet offering as its ultimate goal.

Author and Professor Tim Wu warns of an end to the open Internet in his book The Master Switch, an amazing chronicle of how telephone networks, radio, film and television each came to be as a democratizing disruption, only to be bought up and locked down by corporate interests. A similar fate looms over our Internet, unless we speak up and do something about it.

Further Reading

Here are some additional sources I used in preparing this post:

And in the interest of balance, not everybody thinks that the sky is falling:

A Quick Note to Front Page Readers

The comments you’ll see below aren’t necessarily replies to this post; rather than start a new thread I’ve added these words to an existing one — not to be misleading, but to avoid unnecessary duplication. Do yourself a favour and check out the entire thread.