Verizon challenges FCC's net neutrality rules (Update)

Jan 20, 2011 By JOELLE TESSLER , AP Technology Writer
In this photo taken Aug. 21, 2010, a Verizon sign is shown at New Meadowlands Stadium in East Rutherford, N.J. Verizon on Thursday, Jan. 20, 2011 says it has filed a court challenge to new federal regulations that prohibit broadband providers from interfering with Internet traffic flowing over their networks. (AP Photo/Peter Morgan)

Verizon Communications Inc. on Thursday filed a legal challenge to new federal regulations that prohibit broadband providers from interfering with Internet traffic flowing over their networks.

In a filing in federal appeals court in the District of Columbia, Verizon argues that the Federal Communications Commission overstepped its authority in adopting the new "network neutrality" rules last month.

The rules prohibit phone and cable companies from favoring or discriminating against Internet content and services - including online calling services such as Skype and Internet video services such as Netflix, which in many cases compete with services sold by companies like Verizon.

The FCC's three Democrats voted to adopt the rules over the opposition of the agency's two Republicans just before Christmas. Republicans in Congress, who now control the House, have vowed to try to block the rules from taking effect. They argue that they amount to unnecessary regulation that will discourage phone and cable companies from investing in their networks.

Several key House Republicans, including House Commerce Committee Chairman Fred Upton of Michigan, welcomed Verizon's actions Thursday as "a check on an FCC that is acting beyond the authority granted to it by Congress." The court challenge had been widely expected.

In a statement, Verizon said that while it is "committed to preserving an open Internet," it remains "deeply concerned by the FCC's assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself."

The company is taking the case to the same federal court that ruled last year that the FCC had exceeded its legal authority in sanctioning cable giant Comcast Corp. The agency had cited Comcast for discriminating against online file-sharing traffic on its network - violating broad net neutrality principles first established by the agency in 2005. Those principles served as a foundation for the formal rules adopted by the commission last month.

Last year's court ruling forced the FCC to look for a new framework for regulating broadband to ensure the commission would be on solid legal ground in adopting net neutrality and other rules. The agency currently treats broadband as a lightly regulated "information service," as opposed to phone service, which is more heavily regulated as a so-called "common carrier."

At one point, FCC Chairman Julius Genachowski proposed redefining broadband as a telecommunications service subject to common carrier obligations to treat all traffic equally. But he later backed down in the face of fierce opposition from the phone and cable companies, as well as many Congressional Republicans.

And he now argues that the agency has ample authority to mandate net neutrality under the existing regulatory framework for broadband - an assumption that will be tested in the Verizon challenge.

A senior FCC official said Thursday that the agency is confident that its new net neutrality rules are legally sound and is prepared to defend them.

The rules represented an attempt to craft a compromise on an issue that has divided the telecommunications and technology industries. On one side, Internet companies such as Skype, as well as public interest groups, argue that strong rules are needed to prevent broadband providers from becoming online gatekeepers that can dictate where people go and what they do online.

But the big phone and cable companies insist that they need flexibility to manage Internet traffic to keep their networks running smoothly and preventing bandwidth-hogging applications from slowing down their systems. They also maintain that they should be able to charge extra for special services over their broadband lines and earn a healthy return on the billions of dollars they have spent on network upgrades.

New York-based Verizon is the country's fourth-largest fixed-line Internet service provider, with 8.3 million subscribers. It's investing more in home broadband than any other company, since it's upgrading about two-thirds of its local-phone network with optical fiber for ultra-fast Internet access.

The regulations adopted last month try to find a middle ground. The rules require broadband providers to let subscribers access all legal online content, applications and services over their wired networks. But they give providers flexibility to manage data on their systems to deal with network congestion and unwanted traffic, including spam, as long as they publicly disclose how they manage the network.

The new rules do prohibit unreasonable network discrimination - a category that would likely include "paid prioritization," which favors the broadband providers' own traffic or the traffic of business partners that can pay extra - but they do not explicitly bar the practice.

The regulations also prohibit wireless carriers from blocking access to any websites or competing services such as Internet calling applications on mobile devices, and they require carriers to disclose their network management practices, too. But they give wireless companies more flexibility to manage data traffic because wireless systems have less network bandwidth and can become overwhelmed with traffic more easily than wired lines.

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User comments : 26

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ekim
not rated yet Jan 20, 2011
But he later backed down in the face of fierce opposition from the phone and cable companies,

What about the opposition from the Postal System? You would think they would like to see restrictions on E-mail.
trekgeek1
4.6 / 5 (9) Jan 20, 2011
When you pay for a service, your preferred content should not affect the speed of your connection. Those who oppose government regulation that protects your freedom are all too willing to accept regulations from corporations.
snivvy
1.5 / 5 (8) Jan 21, 2011
When you pay for a service and you are not pleased with the service offered you stop paying and go to a provider whose service pleases you. That's what a market economy is based upon. The FCC overstepped it's boundaries and waded into uncharted waters with this latest regulatory attempt. Government - keep your hands off the Internet!
Modernmystic
3.4 / 5 (5) Jan 21, 2011
"broad sweeping authority"....

*snicker*

Yeah you can't screw your customers anymore at THEIR expense and using the infrastructure THEIR tax dollars paid for....

Pwoooor Verwizon...
Modernmystic
3.4 / 5 (5) Jan 21, 2011
But he later backed down in the face of fierce opposition from the phone and cable companies,

What about the opposition from the Postal System? You would think they would like to see restrictions on E-mail.


They're government workers, they're gonna get paid if they do less or more work...
Skeptic_Heretic
4.3 / 5 (6) Jan 21, 2011
When you pay for a service and you are not pleased with the service offered you stop paying and go to a provider whose service pleases you. That's what a market economy is based upon. The FCC overstepped it's boundaries and waded into uncharted waters with this latest regulatory attempt. Government - keep your hands off the Internet!

THe government built the internet. Verizon leases ownership of a block of it. Verizon has little to no claim over content guidelines.
krundoloss
4.1 / 5 (9) Jan 21, 2011
The whole point of Net neutrality is to prevent internet providers from controlling what you do on the internet. Say for example, Verizon had its own video-on-demand service, and then subsequently blocked access to netflix. That is not fair to the consumer! We cant let these providers control content in ways that Prevent Competition and limit consumer choices. "The Market" as it normally functions cannot prevent this, as in many areas there are few ISP's, and customers will likely just "live with" the limitations that the provider enforces. The government MUST take action to prevent this, and I fully support it.
trekgeek1
5 / 5 (7) Jan 21, 2011
When you pay for a service and you are not pleased with the service offered you stop paying and go to a provider whose service pleases you. That's what a market economy is based upon. The FCC overstepped it's boundaries and waded into uncharted waters with this latest regulatory attempt. Government - keep your hands off the Internet!


Unless they all decide to do the same thing. Think about price gouging between gas stations. They may decide that it is in their best interest to team up and block content. What then? Or one becomes too powerful and then decides to block content. They may have a monopoly on service. This is why the government breaks up monopolies. These practices inhibit free market economics and government intervention ensures that capitalism can proceed.
ryggesogn2
1 / 5 (8) Jan 21, 2011
Unless they all decide to do the same thing.

Provide an example of such a successful conspiracy.
Ever hear of OPEC? They try to get its members to limit the amount of oil they sell to control the market. They have not been very successful.
It is the govt that is the prime inhibitor of markets because it IS a monopoly on force.
ryggesogn2
1 / 5 (5) Jan 21, 2011
"one of the most pressing problems our economy faces as it struggles to create jobs. The $1.75 trillion cost of complying with federal regulations - which amounts to $10,500 per employee every year for small businesses - is crippling our economy." {That's why big businesses don't complain too loudly. They can more readily absorb the costs.}
"Almost every businessperson in this country has a nightmare story about spending enormous sums of money to comply with the latest regulatory requirements - often then forced to turn around and do something entirely different when the whims of regulators change." {That's govt progress?}
http:/www.washingtontimes.com/news/2011/jan/21/regulatory-state-needs-more-than-a-trim/
Just what we all need, more regulations.
ekim
3.7 / 5 (3) Jan 22, 2011
Just what we all need, more regulations.

Currently the internet is border-less. However now we have various providers truing to carve it up into their own little kingdoms with their own sets of laws. Net neutrality is regulation against regulation.
ryggesogn2
1 / 5 (5) Jan 22, 2011
Just what we all need, more regulations.

Currently the internet is border-less. However now we have various providers truing to carve it up into their own little kingdoms with their own sets of laws. Net neutrality is regulation against regulation.

Comcast and Verizon are already strongly regulated in your local market.
I have at four choices for internet at my house:
1. Comcast
2. Verizon DSL
3. Satellite (maybe more than one option)
4. Wireless broadband (Verizon, ATT, ...)

Cities restrict cable competition and phone line competitors.
The market IS already quite regulated restricting choices.
If Comcast wants to restrict content sign up with Verizon or broadband.
Since Netflix is causing much of the fuss, let them start their own internet service. Same for Vogage,Skype or Ooma.
Maybe the fallout will result in ala-carte cable tv service.

ekim
5 / 5 (3) Jan 22, 2011
I have at four choices for internet at my house:

Just because the borders overlap in real space doesn't mean they don't exist.
Imagine a country where every state had rules regarding the brand of cars that could be driven on their roads. Driving across the country might become impossible.
ryggesogn2
1 / 5 (5) Jan 22, 2011
Driving across the country might become impossible.

States would soon discover that was not economically beneficial.
CA does this mandating special rules for cars sold in their state. Companies then choose if they want to sell in that market. We now see how well this is working for CA.
Buyers and sellers will sort out 'net neutrality' much faster and more economically than the FCC. But that would once again demonstrate the ineffectiveness of govt regulations.
soulman
2 / 5 (4) Jan 22, 2011
Sorry ekim for the 1, it was meant to be a 5. I thought it was ryg and his nonsense...
ryggesogn2
1 / 5 (4) Jan 22, 2011
Sorry ekim for the 1, it was meant to be a 5. I thought it was ryg and his nonsense...

Defend your support for socialism.
States limit competition in the health insurance business with 50 sets of rules and mandates and people wonder why health care costs are high.
TechnoCore
5 / 5 (5) Jan 23, 2011
@ryggesogn2: You are naive at best. I thought you didn't like rules? And here you are advocating for more of them!

Do you realize that it takes MULTIPLE ISP's to carry packets when you you choose to fetch some content over the internet?

Without net-neutrality there will be a war between ISP's, trying to discriminate each others traffic. Instead of one simple rule, there will be a patch-work of regulations dictated by corporations through the use of corporate layers in their own interest.

You will lose the transparency needed for true capitalistic competition. You will trade away one rule for a lot of confusion and needless friction.

You will almost always be traveling in the slow lane.
ryggesogn2
1 / 5 (6) Jan 23, 2011
Do you realize that it takes MULTIPLE ISP's to carry packets when you you choose to fetch some content over the internet?

Without net-neutrality there will be a war between ISP's, trying to discriminate each others traffic.


Why? Where are the wars now?
Why should high bandwidth users watching movies on-line, who suck up more bits/sec than a Skype caller or someone reading the news be favored by the govt?
Who is going to pay for network upgrades to keep QoS as HD video sucks up more bits/s?
I still suspect 'net neutrality' is another way to suck up government funding for Internet2.
ekim
5 / 5 (2) Jan 23, 2011
Why should high bandwidth users watching movies on-line, who suck up more bits/sec than a Skype caller or someone reading the news be favored by the govt?

No favoritism. No discrimination either.
Thats what the rules are for.
Why wouldn't a cable company discriminate against a video provider?
Why wouldn't a phone company discriminate against Skype?
Charge based on speed and size alone, not content.
ryggesogn2
2 / 5 (4) Jan 23, 2011
Charge based on speed and size alone, not content.

More bits are needed for HD video.
ISPs need to start charging based upon bits received and sent, not a flat rate. Then no need to discriminate.
Skeptic_Heretic
5 / 5 (4) Jan 23, 2011
Why? Where are the wars now?
Well now we know you're painfully ignorant of current events. Have you not seen the financial discussions and impending lawsuits against comcast from netflix?

Did you miss out on the whole file sharing filtering discussion the industry has been having for a decade now?
ruebi
5 / 5 (1) Jan 23, 2011
Cry me a river Verizon. Charge for usage.
ryggesogn2
1 / 5 (5) Jan 23, 2011
lawsuits against comcast from netflix?

"Comcast says the issue is not the type of traffic moving between the two networks, but the volume of traffic. At the heart of the issue is peering, which allows two providers exchanging large volumes of traffic to save money by connecting directly, rather than routing traffic across their paid Internet connections. Peering is often free as long as the amount of traffic exchanged is not out of balance, providing substantial cost savings for bandwidth for high-traffic sites and networks.

Comcast says its traffic exchange with Level 3 is out of balance (presumably because of the Netflix deal) and no longer meets the conditions for no-cost “settlement-free” peering."
http:/www.datacenterknowledge.com/archives/2010/11/29/level-3-vs-comcast-more-than-a-peering-spat/
Skeptic_Heretic
5 / 5 (3) Jan 23, 2011
Do we have to discuss peering again? Have you learned anything since the last time we discussed it?
ryggesogn2
1 / 5 (5) Jan 23, 2011
Do we have to discuss peering again? Have you learned anything since the last time we discussed it?

Govt regulators are so successful creating a booming US economy now, let's have them perform their 'magic' on the internet.
ryggesogn2
1 / 5 (4) Jan 23, 2011
"In the meantime, Level 3′s stance has spun up a vigorous debate about Net Neutrality and the potential for online video traffic to disrupt the peering relationships that keep Internet traffic flowing smoothly.

Peering disputes usually end amid howls of pain from customers who’ve had their Web surfing disrupted by the networks disconnecting. That hasn’t happened in this case. Level 3 has objected to the new fees, but neither party has actually severed their peering. Comcast’s action could reflect an opportunistic move to rework its peering deal with Level 3 – in effect, a bet that Level 3 would pay the fees instead of disrupting the ability of Netflix (and its other customers) to reach one of the largest Internet audiences."
http:/www.datacenterknowledge.com/archives/2010/11/29/level-3-vs-comcast-more-than-a-peering-spat/