Comcast

Economic rationality, competition, and broadband pricing freedom are the big winners, and common carrier-like net neutrality was the big loser, if the Appeals Court panel decides Verizon v. FCC as expected.

Monday’s intense tag-team grilling of the FCC’s lawyer by Judges Tatel and Silberman left most observers thinking the Court will decide it is illegal for the FCC to impose common-carrier-like regulation on broadband providers -- regardless of what else they decide.  

FOR IMMEDIATE RELEASE                                           

September 9, 2013

Contact:  Scott Cleland                                                 

703-217-2407

“A Very Good Day for Broadband Pricing Freedom”

September 9^th looks to be a challenging day for the FCC.

For many good reasons, the FCC will face a skeptical D.C. Circuit Court of Appeals panel Monday in oral arguments for Verizon vs. FCC. The FCC will be defending its Open Internet order which mandated neutrality.

Overall the court will be skeptical because the FCC largely ignored the law, Congress, the facts, and the Constitution. Essentially, the FCC made up an industry problem that does not exist in order to repurpose itself for the Internet age. Simply, the FCC is not asking for slack from the court (i.e. Chevron Deference), it’s basically asking for carte blanche to grant itself unbounded authority going forward.

Verizon enjoys the advantage in this case because it need prevail in only one of its several strong challenges to the FCC’s order, while the FCC must convince the court to completely reject all of Verizon’s arguments.

Specifically, why will this court be skeptical here?

Information may want to be free, but physical networks are costly.

Few proponents of net neutrality appreciate the trillions of dollars of investment it has taken to build and upgrade the Internet’s vast and varied infrastructure that we all enjoy today. Simply, the Internet is not free of cost.

Economical policies have made the Internet universal and have enabled users to access the content, apps, and devices of their choice – what net neutrality is supposedly all about. On the other hand, uneconomical policies that discourage economic growth, return-on-investment, or respect for property can have unintended consequences and can threaten the proverbial goose that lays the golden eggs.      

Net neutrality is in the eye of the beholder.

It’s rapidly devolved into a gotcha game -- where if someone doesn’t like something or someone, they cry “net neutrality violation!” and call for an FCC investigation -- under the FCC’s self-asserted, all-powerful Open Internet order.  

Senators and Representatives are now writing the FCC urging it to investigate CBS.com for an alleged net neutrality violation over a contract dispute over how much Time Warner Cable pays for retransmitting CBS programming. The FCC could have a role in this retransmission dispute under obsolete 1992 law, but not legitimately under the FCC’s Open Internet order.

The fact that U.S. senators and representatives imagine that a billing dispute among companies could be considered a net neutrality violation illustrates how arbitrary and capricious net neutrality politics and the FCC’s Open Internet order have become.

Apparently there is no objective, reasonable or predictable standard of what net neutrality is or what a violation of “it” is. That net neutrality has transmogrified into a political-catch-all for anything affecting consumers is powerful proof of how capriciously this issue has been abused.

Why has net neutrality become so capricious?

Please see my latest Daily Caller Op-ed on proposed A la carte TV Legislation -- here. 

• It is Part 11 of my Defending First Principles Series.

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Defending First Principles Series

Part 1: Debasing Free Speech as No-Cost Speech

They were so wrong. To justify FCC market intervention, U.S. proponents of EU-style, heavy-handed broadband regulation trumpeted the narrative that the U.S. was falling behind the world in broadband.

The pro-regulation chorus of Free Press, Save the Internet, Public Knowledge, Susan Crawford, the Harvard Berkman Center, et al, sung from the same made-up song sheet that American business was failing and Government needed to take control of broadband networks to restore American leadership and prevent private enterprise from discriminating and censoring Americans free speech.

Now we know how tall a tale these pro-regulation pressure groups were willing to spin to advance their interventionist net neutrality agenda.

Facts are pesky things and the facts show that the U.S. is strongly leading the EU in the broadband race. It is so obvious even top EU officials admit the EU “needs to catch up.”

Let’s review the latest facts.

The D.C. Circuit Court of Appeals 3-0 decision to overturn the FCC in Comcast v. FCC/Tennis Channel spells more trouble for the ultimate legality of the FCC’s Open Internet Order. That decision spotlights that three additional D.C. Circuit Appeals Court’s judges do not agree with the FCC’s reading of the law and the facts concerning lawful network discrimination.

On the margin, this new decision should make Verizon more confident and the FCC less confident in the outcome of Verizon v. FCC.

Overall, I believe Verizon remains more likely than not to prevail in its challenge of the FCC net neutrality regulations in the FCC’s Open Internet Order, because Verizon only needs to prevail with one of its many strong arguments while the FCC must win on all of them.

How is this latest D.C. Circuit decision relevant to the FCC Open Internet order case?

What’s the impact on the Verizon appeal of the Open Internet Order of the Supreme Court’s strong reaffirmation of its Chevron deference standard, in Arlington v. FCC?

I believe Verizon is still more likely than not to prevail on the merits of its appeal, because the FCC’s Open Internet Order is so unambiguously far outside the bounds of the FCC’s statutory authority, that Chevron deference is unlikely to apply.

If the SCOTUS had not strongly reaffirmed Chevron deference, the FCC would have faced an even steeper fight in the Open Internet Order. Despite the SCOTUS decision not being particularly helpful in the specific FCC Open Internet case, it undeniably was very FCC-friendly overall. That’s because it affords the FCC more latitude to exploit the many legally-ambiguous seams of communications law to advance its various regulatory agendas in highly-targeted ways.

Please see my latest Daily Caller Op-ed "Wireless Plan Innovation Benefits Consumers & Competition -- here.

• It debunks net neutrality criticism of a reported potential ESPN-wireless pricing experiment.
• It is also Part 15 of my Broadband Internet Pricing Freedom research series.

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Broadband Internet Pricing Freedom Research Series

Part 1:    Netflix' Glass House Temper Tantrum Over Broadband Usage Fees