Everything You Need to Know About Today's Net Neutrality Trial
Entrepreneur's New Year’s Guide
The Internet’s future hangs in the balance today as three federal judges in Washington decide whether to strike down “net neutrality.” This is the popular term for a legal principle, embraced by the Federal Communications Commission this year, that means Internet providers can’t favor some websites over others when delivering content to consumers.
The case’s outcome will affect companies like Netflix and many small websites, and it will also shape how consumers use the web at home and on their phones for years to come. It is probably the most important tech case in the country right now.
Want a better idea of the what the fuss is about? Here’s a plain English guide to the case, which will be heard Friday morning at the DC Circuit Court of Appeals, as well as some guesses as to how it may turn out.
Why is “net neutrality” such a big deal again?
Internet and mobile phone providers think they should be allowed to deliver some websites at faster speeds than others. In practice, this would mean ISPs like Comcast could force Netflix and other video sites to pay special additional charges to ensure their streams are not throttled. Meanwhile, mobile phone companies think they should be allowed to favor certain types of data over others when delivering content to customers’ phones.
Right now, the companies can’t do that because of a landmark FCC ruling in February that classified Internet providers as “common carriers,” meaning they must respect the principle of net neutrality. The FCC’s move was cheered by the tech industry and by consumer groups, who say net neutrality encourages online innovation and ensures big telecom companies don’t abuse their power over broadband. The telecom companies, meanwhile, say the rules are a burden that will discourage them from investing in infrastructure.
What’s happening in court on Friday?
The telecom industry sued the FCC this spring, saying the agency’s net neutrality rules are illegal. Now, the case is all teed up for three judges from the Washington court, who will hear each side’s arguments. The hearing will last between two and three hours, and the judges will allocate a small amount of that time to outside interest groups. Journalists will not be allowed to report live from the hearing, so the first accounts will only trickle out in the afternoon.
What are the legal issues?
The high-stakes affair will largely turn on the meaning of a few simple phrases, especially “telecommunications services.” That’s the phrase used by the FCC to reclassify Internet providers as “common carriers” akin to the phone company. The agency and net neutrality supporters are confident the designation makes sense, but the telecom industry insists that what the Internet providers are offering count as “information services,” which is a separate legal category that comes with fewer restrictions.
Equally important is whether or not the FCC’s new classification should apply in the same way to mobile Internet services (the Internet you get on your phone) as it does to home Internet. This argument turns on another technical argument involving the significance of the phrase “private mobile radio services” and whether it prevents mobile Internet providers like Verizon from being classified as common carriers.
The telecom companies will also be throwing around a few other arguments, including claims the FCC violated their First Amendment rights and didn’t follow the correct notification appearances. But these are unlikely to get much traction. The real bread and butter here turns on the statutory stuff described above.
So who’s going to win?
This is a hard one to call. Recent profiles of the judges in the Washington Post and the Wall Street Journal suggest the outcome will be decided by Judge David Tatel, who has provided the key swing vote in earlier tussles involving the FCC and net neutrality.
Advocates for the telecom industry are quick to point out that Tatel has ruled against the FCC on net neutrality twice before, including in 2014 when the court struck down an earlier set of rules. But according to lawyer and long-time FCC watcher Harold Feld, Tatel’s 2014 ruling strongly suggested the agency could impose net neutrality, so long as it reclassified the companies as common carriers -- which the FCC has done.
Feld, whose consumer rights’ group, Public Knowledge, filed a brief in support of the FCC, says he suspects the agency will prevail on the core question of whether ISPs are “telecommunications services.” But he is less confident on the mobile question. He thinks it’s possible the court could split the baby and say net neutrality applies to home Internet but not to phone providers.
When will the decision come out?
The smart money says it will come out in the first few months of 2016 since it’s a whopper of a case, and it’s unlikely the judges and their clerks want to grind through it over the holidays.
Will this go to the Supreme Court?
Yes, it probably will. The stakes are high enough that whoever loses will want to appeal. Meanwhile, a number of the current Supreme Court justices were not present for the court’s last major ruling on the issue (which came in a 2005 decision known as “Brand X”), meaning they are likely disposed to a grant review so they may weigh in on the issue themselves.
If the FCC loses all or part of the current case, look for the agency to press for a quick appeal. The agency’s five commissioners are political appointees (currently 3 Democrats and 2 Republicans), and Chairman Tom Wheeler will want to get a petition in quickly in the event the White House changes hands next year. If the Supreme Court grants a review, the case would likely be heard in late 2016 or early 2017.
What about Congress and the President?
The FCC chose to pass the net neutrality rules in part due to a nudge from President Obama (with a big assist from comedian John Oliver). In response, Republican members in Congress want to retaliate by slashing the agency’s staff budget via a rider to an upcoming appropriations bill. According to Feld, this remains a real possibility and the fate of the rider is likely to be determined by political horse-trading between the President and the GOP.