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FCC throws in towel, but public has right to know why

By James Tuthill, San Francisco Chronicle

The Federal Communications Commission said last week that it would not appeal a court decision issued in January overturning the FCC's net neutrality rules, Verizon vs. Federal Communications Commission.

Those rules prohibited discrimination and blocking by Internet service providers that provide high speed connections to the Internet.

Tom Wheeler, chairman of the FCC and an Obama appointee, said that the FCC supports an open Internet and will develop new rules to replace those thrown out by the court. But for practical purposes, he threw in the towel. And the just-announced deal between Comcast and Netflix for preferential delivery shows how quickly the industry will move to capitalize on its now-unrestrained power.

Verizon is a horrible legal precedent for the FCC and the Internet user and entrepreneurial communities because it severely restricts, if not eliminates, the FCC's power to prohibit discrimination and anticompetitive acts by service providers. It seems obvious that the FCC would want the case overturned.

The commission could have sought review by the Supreme Court, and the Supreme Court likely would have accepted the case given the significance of the issues and a request for review by a federal agency.

The FCC has several strong arguments that the court that overturned the rules was wrong: The court misconstrued the legal consequences of the FCC's rules, failed to grasp how the Internet functions, failed to defer to the agency under established legal precedent, failed to provide a clear, cogent and convincing argument for its conclusion, and substituted its judgment on an issue of national policy for the agency's decision.

Given the current composition of the court, the FCC stood a better-than-even chance of success.

The failure of the chairman to seek review raises legitimate questions about the reasons for declining to appeal. Previously, he was the president of the National Cable Television Association and president of the Cellular Telecommunications and Internet Association. Cable television and wireless providers strongly opposed the net neutrality rules, and they must be secretly congratulating themselves over Wheeler's decision not to appeal.

In announcing the decision, Wheeler said he would propose new rules to meet "the 'no blocking' goal" and "the goals of the nondiscrimination rule." But how can the FCC legally do this in the face of the Verizon decision? The court there declared that imposing no blocking and antidiscrimination rules amounts to treating the ISPs as common carriers, and the commission is prohibited from doing that.

Simply calling a rose by another name will not change what it is, and the courts won't buy it. It's a certainty that any new rules will be challenged in court, and more than likely they will be overturned, too, given the Verizon decision. And it will take another four or five years to reach that point. This is futility.

The path the FCC is taking leaves the authority of the commission to police the Internet in serious jeopardy. The approach cedes national policy to the court and power to control Internet practices and traffic to providers like Comcast and Verizon. Just look at the deal announced Sunday between Comcast and Netflix: Netflix, an edge provider, will pay Comcast, an ISP, for faster and more reliable delivery of Netflix's content to Comcast's customers. This is the type of preferential treatment the rules sought to prevent by restricting discrimination by service providers.

The chairman owes the American people a better explanation for his course of action. The FCC is not a private company that can hide the reasons for its decisions. It's a public agency obligated to serve the public. He needs to tell us why he decided not to appeal the case to the Supreme Court, and his reasons need to be persuasive.

Unfortunately, right now, the future of the Internet looks a lot like the Comcast-Netflix agreement - those who can pay will prevail. The consequences for new startups and end users are dire. The Senate, led by our two California members, needs to call him before the Senate for a clear explanation and, if appropriate, demand a change in course. There's still time to appeal. But it's running out.  

2/25/2014