The Federal Communication committee has repealed the 2015 Open Internet order. According to Mr. Ajit Pai, the Chairman of FCC, the repeal is beneficial for consumers as it restores the authority to the Federal Trade Commission over internet service providers.

What does this mean?

In 2010 the FCC had passed the 2010 Open Internet rules based on the principals of Non-unreasonable discrimination, No Blocking and Transparency. These orders were challenged in the Verizon Communications V FCC, the D. C Circuit Court held that the FCC had acted beyond their authority. Since broadband services were classified as information services and not telecommunications services, therefore the FCC could not regulate it as common carriers under Title II of the Communications Act of 1934. After the ruling in 2014, the FCC issued the 2015 Open Internet Orders, which classified Broadband Internet Access Services (BIAS) as a telecommunication service. It was defined as any “mass market retail service . .  . that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service” .The rules enhanced the previous principals and was based on No blocking, No throttling and No paid Prioritization. Which basically meant that service providers would not be able to block or impair traffic to legal content, applications or services neither could they give preferential treatment towards affiliated services or applications. For consumer as well as service providers this meant that there could not be any unreasonable interference in the services accepted or provided. In short these rules were to ensure Network Neutrality.

However, now that the Net neutrality rules are revoked, service providers are free to provide services in bundles and use internet fast lanes for the affluent. A broadband service provider selling its own video on demand may have incentives to degrade service quality of a company selling similar online services. Though such behavior would violate antitrust laws however in terms of net neutrality the antitrust proceedings might be too slow to police such discrimination.

The Difference in Outlook

The European Union’s primary focus is on the competitions between Internet Service providers, providing DSl services through Infrastructure service provider’s wires. Therefore the competitions is among infrastructure owner allowing competing ISPs to offer services over its lines or intra-platform competition, hence the EU promoted various types of unbundling policies.

On the contrary in US the competition is inter platform, or among several facilities based services providers. In other words different service providers compete to provide better network. Consistent with the same approach, the new infrastructure were no required to unbundle.

The European Union adopted the open internet rules. The rules were applicable from 30 April 2016 iterates that the End-users shall have the right to access and impart the content of their choice.  Blocking, Monitoring, Slowing down or Discrimination traffic is prohibited. Reasonable traffic management is allowed provided it is compatible with equal treatment of traffic justified by technical requirements and is independent of the origin or destination of the traffic and of any commercial considerations. Allowance to provide services other than Internet Access Service, optimized for specific content, applications or services and subject to strong safeguards to avoid detriment for the internet access service (services other than Internet Access Service can be provided only if there is sufficient network capacity to provide them in addition to any internet access service; provision of these services must not be to the detriment of the availability or general quality of internet access services for end-users). National regulatory authorities are to monitor and enforce compliance with the open internet rules. BEREC, the Body of European Telecoms Regulators, issues guidelines for the implementation of the obligations of national regulatory authorities in order to contribute to the consistent application of this Regulation.

The Telecom Regulatory Authority of India’s (TRAI) ordered in 2016 prohibiting the Internet Service Providers from differential charging. It restricts the broadband providers from providing special tariffs that discount the usage of specific services.

TRAI favors net neutrality and bars discriminatory treatment of content by ISPs and suggests setting up of a multi-stakeholder body to monitors the traffic management practices of the telecoms.

Why do we need Net Neutrality?

According to Sarah Box and Jeremy West, OECD (Organisation for Economic Co-operation and Development), in their paper ” Economic And Social Benefits Of Internet Openness”,  the term “the Open Internet” has been dealt with .“Internet openness” is a more useful term because it reflects that the Internet can be open in multiple ways and to varying degrees. The dimensions of openness include technical, economic and social factors, such as market conditions, governance, legal environments and procedures, and human rights. Internet openness is grounded in the 2011 OECD Principles for Internet Policy Making, which identified goals for promoting the openness and dynamism of the Internet. It is well known that certain technical elements of the Internet’s architecture, such as publicly available and commonly adopted data transport protocols, are vitally important for opening the Internet to devices and users on a massive, efficient scale. The open nature of the technical foundation of the Internet is critical to the Internet’s “identity”. Technical openness includes factors such as the end-to-end principle, the use of consistent voluntary technical standards for data packet switching, interoperability, a consistent address space, and a uniform convention for domain names. The Internet’s layered existence is clear, which consists of a physical access and transport infrastructure, an agreed set of packet and transport protocols, a domain name system, an IP address system, and applications/content. These layers enable data flows that travel between user devices located at the edges of the network. According to the conditions at each of these layers, the technical characteristics of the Internet may be more or less open.

Contrary to systems of closed endpoints, such as the telephone network prior to liberalization, an open system promotes innovation.  This opens possibilities to any creator anywhere, to change the relationship between innovation and infrastructure. In an open system the revenues for applications and services are usually supported by advertising, upgrading of infrastructure in a closed system would be expensive for these application/service providers.

Packets flow over the Internet freely, except during network congestion. Packets that wait too long are dropped. Loss of packets degrades services, at times to the point of non-functionality. Hence net neutrality can be about how to respond appropriately to congestion and packet loss and expanding the infrastructural capacity is the best solution, though some parties may use a variety of non-technical practices to tilt the competitive playing field in their favor.

What lies in the future?

AT&T’s $85 billion acquisition of Time Warner has been approved by the District Court of Columbia. The Antitrust Division of the Department of Justice, had contended on behalf of the government, that this merger would substantially lessen the competition on the video programming and the distribution market countrywide. With the acquisition AT&T would have access to the “must have” television content( popular Time Warner cable channels such as HBO, TNT, TBS, CNN, etc) which would either raise the cost of rival distributors or total blackout their access and drive consumers to their subsidiary DirectTV. With repealed net neutrality rules AT&T may exempt its own video content from usage caps.

Consumer prices could reach an all time high with fewer options for programming and providers, at the same time this merger may encourage more such acquisitions in future. Comcast is considering a $60 billion acquisition of a portion of 21st Century Fox.

The Future of digital freedom and rights in United States are yet to be realized after the repeal, however, a careful assessment in due time would help reveal whether this is the beginning of a new wave of internet.

References

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