The Federal Communications Commission is sitting on a mess. This week the U.S. Court of Appeals for D.C. decided in Verizon Communications v. the FCC that the commission didn’t have the authority to impose its open Internet order on Verizon or anyone else. There is a simple fix for this mess. It does not require any new laws from Congress. It already has the support of the Supreme Court.
If the FCC actually wants to ensure net neutrality, it will have do something that every regulator in every other developed country did a long time ago. It has to unmake the mistake it made in 2002, when it failed to classify cable Internet providers as telecommunications services. Doing so would solve everything.
The last major piece of internet law, the Telecommunications Act of 1996, gave the FCC the authority to regulate Internet service providers as either telecommunications services, which transmit data, or information services, which process data. Early in the 2000s, the cable industry argued that it not only transmitted Internet data to customers, it also provided e-mail addresses and Web pages—it processed data as well. Since cable companies were therefore both telecommunication and information services, the industry argued, it could only possibly be an information service.
The FCC bought this argument. In 2002, it decided that since cable was both, it could only be one. The FCC still treats broadband Internet access as an information service. No one has ever done a better job of pointing out the absurdity of this decision than Antonin Scalia, who in a dissent in a Supreme Court case in 2005 pointed out that the cable industry was like a pet shop that sold a leash with every puppy, then decided that it was not in the puppy business but in the leash business.
The distinction matters because under the Telecommunications Act, an information service is automatically regulated as a common carrier—it cannot discriminate among the kinds of traffic that pass through it. In its statement after the decision, Verizon argued that the “the court found that the FCC could not impose last century’s common carriage requirements on the Internet.” Telecom companies like to use that phrase, “last century’s common carriage requirements,” to imply that the concept of common carriage is horribly outdated.