Why Verizon Wins Appeal of FCC's Net Regs

Verizon is highly likely to win its appeal of the FCC's December Open Internet order, because the FCC's order is likely to deeply and broadly offend the legal sensibilities of the Appeals Court, just like the FCC offended the DC Appeals Court's sensibilities when it punished Comcast for violating a regulation that did not exist.

 

  • The Court responded to that FCC injustice last April by ruling in its Comcast vs. the FCC decision that the FCC had no authority to regulate broadband or the Internet.

 

To understand the most likely outcome here, it is critical to cut through the FCC's claims, assertions, and arguments, and focus on the big picture context of what the FCC is actually doing in this Open Internet Order, i.e. what is the effect of the FCC's decision and process on the rule of law. That is what matters most to the Court.

Why Google-ITA is like Microsoft-Intuit 1995

A helpful way to understand and put in perspective Google's proposed purchase of ITA Software, the dominant provider of flight search technology, is to identify Google-ITA's best historical and logical analog. That would be Microsoft's 1995 proposed purchase of Intuit-Quicken, the then dominant provider of financial software technology. That transaction was blocked by the DOJ as anti-competitive and was a key precursor decision to the DOJ's ultimate decision to sue Microsoft in 1998 for monopolization under the Sherman Act.

The reason so many people ask: "Is Google the next Microsoft?" is because the analogy is so apt.

First, in over thirty years, Microsoft is the only major company other than Google to establish a national monopoly via technology, generate broad serious antitrust complaints, and attract a Sherman Act anti-monopolization case from the DOJ.

Second, Google-ITA is very similar to Microsoft-Intuit as both attempted to leverage their horizontal industry dominance vertically into a non-tech market vertical of the economy, i.e. Microsoft into personal finance software and Google into travel search software.

 

Why FCC's Net Regs Need Administration/Congressional Regulatory Review

To promote "America's free market," President Obama today ordered a government-wide review of regulations that "make our economy less competitive," in order to take us "toward a 21st century regulatory system."

Here is the case for why the FCC's December Open Internet order deserves to be atop of the Administration's regulations to review for abolition.

 

 

First, the FCC's new Internet regulations violate the President's goal of a "21st century regulatory system" by applying "outdated" 19th century common carrier regulatory thinking and approaches to the previously un-regulated, and flourishing 21st century Internet. (Para 68)

Second, the FCC rules violate the President's goal of avoiding "excessive, inconsistent, and redundant regulation."

 

Google Censoring its Critics: IBD article "When Analysts Look Over Their Shoulders"

For an "unusual behind-the-scenes" look at how Google, by far the world's-leading source of information, proactively seeks to censor information critical of Google from becoming more "accessible and useful" to the world, please read this Investor's Business Daily,"Managing for Success" feature article by Brian Deagon, entitled: "When Analysts Look Over Their Shoulders."

If this is Google's "typical" treatment of its critics, what else is Google doing "behind-the-scenes" to people with information that Google disagrees with or that Google does not want to be "accessible and useful" to the world?"

Here is the Text of FCC Open Internet Order

FYI: To read the actual text of the just-released FCC Open Internet Order approved December 21st -- click here.

Given the document is 194 pages (126 pages for the order and 68 pages in Commissioners' statements), this Order is no "light touch."

There will certainly be a lot here to digest... and to cause indigestion...

 

 

 

FCC Defines Broadband Service as "BIAS"-ed

In our acronym-driven society, the FCC in its News Release on its Open Internet Order, does fairness and broadband providers a great disservice in creating a new definition for broadband service as "Broadband Internet Access Service" -- or the acronym "BIAS."

Given that the FCC has not proven its allegation with facts or analysis that broadband providers operate in a non-neutral or discriminatory way after eight years of looking for it, it is particularly unfair, discriminatory, and prejudicial for the adjudicative FCC to literally define the service that it is alleging to be non-neutral as "BIAS."

With all the other potential permutations of words to define broadband service in a new way in order to impose net neutrality rules, it is an unfortunate and unlikely coincidental acronym.

Would it not raise the question that a judge was not impartial, if the judge created a term to classify a group of defendants that had the acronym "GUILTY?" or SCOFFLAW?

Does it not raise the question that the FCC is not an impartial arbiter of net neutrality disputes, if the FCC effectively re-classified broadband service as inherently "BIAS"-ed?

Does it not create the appearance that the FCC has made up its mind in pre-judging that a broadband provider's service offering is "BIAS"-ed and inherently guilty-until-proven-innocent of alleged violations of net neutrality and openness?

 

FCC Open Internet Decision Take-aways

The FCC's 3-2 vote on its Open Internet order produces several  big takeaways, despite there being no actual order to review.

Take-aways:

First, the controversy over net neutrality isn't going away; it is on path to get more controversial.

The FCC signaled this was only the beginning of a broader FCC net neutrality rule making process.

 

NetCompetition.org Statement on FCC Open Internet Order

FOR IMMEDIATE RELEASE

December, 21 2010

Contact: Scott Cleland

703-217-2407

FCC Unilaterally Trying to Change the Internet from Competition-Driven to Regulation-Driven

WASHINGTON – Scott Cleland, Chairman of Netcompetition.org, released the following statement regarding the FCC’s December 21st Open Internet order.

FCC Internet Price Regulation & Micro-management?

If David Hatch's National Journal "exclusive" report is accurate, that the FCC's proposed Open Internet order is being changed to become much more regulatory in: "addressing concerns about wireless carriers, limiting Internet toll lanes, and adding protections for a new online pricing model" -- the FCC would be hurtling itself headlong down the very slippery slope of highly-destructive FCC Internet price regulation and micro-management.

The huge folly of this trajectory is that its hard enough trying to write an enforcement solution to a non-existent problem, it is mind-numbingly difficult to imagine that the FCC can economically price regulate and micro-manage the international Internet ecosystem.

If this is the direction the FCC is headed, it is the ultimate in regulatory hubris. Not only does the FCC have no legitimate justification, rationale, authority, or consensus to micro-manage the Internet with unprecedented price regulation, the FCC has no proven regulatory competence, business expertise, or analysis on how to achieve this equivalent of doing brain surgery in mittens on a roller coaster in the dark.