Tech Law

2014: The year the Americans broke the internet. For good.

By Mark Leiser |

February 1, 2014 | 7 min read

A recent decision by a US Appeals court ended the regulation of the internet as we know it. The Federal Communications Commission (FCC) was deemed to have created a framework for ensuring the concept of "net neutrality" out-with the remit for the organisation it created itself. Now, a former FCC chairman has called for a 'nuclear option' to reclassify Internet Service Providers (ISPs) as common carriers.

Doing so would force ISPs to be treated more like public utilities and subject them to FCC regulations over issues such as rate setting and universal service obligations. There has already been a lot of commentary and speculation about what the ruling means for the average user, and I don't want to add to the hyperbole already out there, but I think it is important to clarify a few things.

Net neutrality, or the end of it, has the potential to bring about the end of the internet as we know it. In a practical sense, it opens the doors for companies to manage the traffic across the network as they see most profitable, which means these companies can take measures that not only affect content creators, but end users. The ruling overturns the 20 years of treating the internet as a 'dumb' network that processed packets of information without prioritising them.

The ruling, in effect, means that two publicly traded corporations (and many smaller ones) can reconfigure their traffic-shaping programs to their benefit – not yours. The packets of information travel across the network in a "non-neutral" way. The consequence of the non-neutral treatment of information packets is that ISPs like Verizon and Comcast would be empowered to pick and choose what internet services become successful and which internet services flop.

As a result, the end of net neutrality is not just about a faster Facebook. It is much more than that. As the LA Times said in the aftermath of the US Appeals court decision that the Federal Communications Commission (FCC) could not establish rules promoting net neutrality: bow down to your new internet overlords, Comcast and Verizon.

The traffic management regimes that Comcast and Verizon can deploy can tag the tiny bits of information that travel across the internet based on either what they contain or what application sent them. By installing deep packet inspection, an ISP can both monitor and theoretically monetise by charging the content provider a fee to deliver the content at speed. This not only affects the speed in which content is delivered, but the rights of the end-user to receive content. The ruling effectively gives ISPs the right to manipulate these bits on the internet for their own benefit. This is because there is little economic benefit for owners to allow low value, high volume traffic to travel over their networks.

Current business models place little emphasis on charging users for the content on the internet as there is little market for charging for access. Most content under the current form of the internet, Web 2.0, is user-generated content and it simply wouldn’t be feasible to charge consumers for the content they share and comment on. This is going to create numerous issues for ISPs and consumers. Firstly, there is the issue of transparency. There are very few regulations that require a network owner to tell you when they have blocked or throttled a service. This is really an issue for consumers who are using services not provided by the network provider. For example, Skype and other VOIP services have been degraded and blocked by mobile providers.

Telecommunications lawyer Marvin Ammori made the following chilling observation before the ruling came down: "AT&T, Verizon, and Comcast will be able to deliver some sites and services more quickly and reliably than others for any reason. Whim. Envy. Ignorance. Competition. Vengeance. Whatever. Or, no reason at all."

The next major issue is blocking or throttling “non-partner” services. Take, for example, multi-person gaming. Comcast may partner up with a premium gaming service based in the US. The ruling allows them to discriminate against a gaming service based in Thailand that isn’t a partner by throttling the gaming service, but the aforementioned issues of transparency mean that the end-user doesn’t know what is causing the problem. This could create an anti-competitive market for all sorts of internet industries that rely on the dumb network that allows for a fair and best-effort method of prioritising data across networks.

Because ISPs have what is known as a termination monopoly over the end-user, they can use the same model as found in the Cable TV industry. Smaller content providers have to pay to secure access to the end-user. This is because of the last-mile rule for carriers. The last-mile, or the edge of the network, is where the network has most of its expense because of infrastructure costs and accordingly makes its money, by charging the user for access.

This throws the end-to-end principle into question. It may even signify its death. The early internet went by the idea that the web worked best when data packets were routed with the same priority. Engineers have tinkered with this a bit over the years, but the principle largely remains. The ruling that ISPs are not common carriers (former FCC Chairman Michael Powell, George W Bush appointee) made this much to the chagrin of, well, everyone who wasn’t a telecommunications carrier. The decision, made in 2002 under Powell, reclassified cable modem services as "information services" rather than "telecommunications services", eliminating its own authority to regulate them broadly. It is no surprise then that Michael Powell, General Powell’s son, is now the chief lobbyist for the cable television industry in Washington.

The ruling empowers the cable industry to censor content. It will be a massive threat to internet freedoms. The large multinationals like AT&T, Comcast, and Verizon have just been empowered by the courts to turn the internet into, if they want to, a massive controlled medium like TV and radio. As Professor Christopher Marsden states in his book, Net Neutrality: “ISPs are now allowed a broad measure of independence as to process to achieve the results the government sets out. This is controversial in that it passes powers to control freedom of expression into private hands, often without constitutional protections that govern public authority intervention and censorship.”

Tech Law

More from Tech Law

View all


Industry insights

View all
Add your own content +