Federal Court Halts Obama FCC's Abuse of Power, WashPost's Kang Files Melodramatic Story In Response

On Tuesday a federal appeals court ruled that the Federal Communications Commission (FCC) overstepped its legal authority in 2010 when it imposed so-called net neutrality regulations on broadband companies -- cable and fiber-optic Internet providers like Comcast or Verizon FiOS. The FCC had done this despite language in federal law which forbade the regulations under a "common carrier" provision.

While the Wall Street Journal's Gautham Nagesh and Amol Sharma gave readers a factual portrait of the ruling which dealt with the law and the economic realities of broadband service, the Washington Post's Cecilia Kang opted for the melodramatic in her January 15 front-pager, foreseeing a future replete with the Internet's fast lanes auctioned "to the highest corporate bidder" while "other Web sites [slow] to a crawl." "Ultimately," the Post national technology correspondent ominously warned (emphasis mine):

Ultimately, the ruling may limit consumer choices on the Internet, critics warned. Deep-pocketed, entrenched companies such as Google, Netflix and Facebook could buy better access to American businesses and homes, while new or less affluent rivals could see their content load more slowly.

The decision is “alarming for all Internet users,” said Harvey Anderson, senior vice president of legal affairs for Mozilla, the nonprofit organization that created the Firefox Web browser. “Essential protections for user choice and online innovation are gone.”

Consumer advocates warned that if control of the Internet were to become concentrated in the hands of a few giant Internet providers, such as Time Warner Cable or Verizon, those firms could become gatekeepers of political speech and other content online.

“We’ve had a number of examples of how money is equated with speech. And money drives the political system,” said Gene Kimmelman, the director of the Internet Freedom and Human Rights Project at the New America Foundation. “This decision opens the door now for the companies that control the money on the Internet to drive what Web sites, what news and information is available at what price and to whom.”

Kang's story was front-loaded with a parade of horribles, but thin on the other side of the story, briefly quoting former Bush-appointed FCC chair Michael Powell, but otherwise ignoring the economic and moral argument of the fairness of a pricing structure that places heavier costs on bandwidth-binging websites.

What's more, while the ruling leaves open a door for the FCC to re-regulate broadband providers in a slightly different way than the method the court struck down, Kang turned again to the complaint of liberal "critics" who say the Obama-appointed FCC chair is a corporate shill:

FCC Chairman Tom Wheeler, who was sworn in late last year, said in a statement that he is considering “all available options, including those for appeal.”

He noted that the court did not completely strip the FCC’s overall authority to regulate broadband providers. “I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment,” Wheeler said.

But some consumer advocates question whether Wheeler will be inclined to launch a major effort to reinstate net-neutrality rules. They note that before coming to the FCC, Wheeler had been the head of major lobbying organizations for the cable and wireless industries.

Wheeler recently has indicated some support for allowing wireless firms such as AT&T Wireless and T-Mobile to offer priority service to Web companies for a fee. Under the FCC’s net-neutrality rule, broadband companies could not speed up traffic for preferred Web sites. But more flexibility was given to wireless carriers, which were banned only from blocking Web sites outright.

By contrast, Gautham Nagesh and Amol Sharma of the Wall Street Journal were decidedly even-keeled and objective in their front-page report on the ruling, although understandably their liberal colleagues in the media might take umbrage with them for seeing the case as a "blow to the Obama administration" (emphasis mine):

WASHINGTON—A U.S. appeals court on Tuesday threw out federal rules requiring broadband providers to treat all Internet traffic equally, raising the prospect that bandwidth-hungry websites like Netflix Inc. NFLX -4.72% might have to pay tolls to ensure quality service.

The ruling was a blow to the Obama administration, which has pushed the idea of "net neutrality." And it sharpened the struggle by the nation's big entertainment and telecommunications companies to shape the regulation of broadband, now a vital pipeline for tens of millions of Americans to view video and other media.

For consumers, the ruling could usher in an era of tiered Internet service, in which they get some content at full speed while other websites appear slower because their owners chose not to pay up.

"It takes the Internet into completely uncharted territory," said Tim Wu, a Columbia University law professor who coined the term net neutrality.

Adopted in 2010, the Federal Communications Commission rules said that companies like Verizon Communications Inc. VZ +1.69% and Comcast Corp. CMCSA +2.44% had to treat all similar content on their networks equally, whether it was a YouTube video or a home video posted on a personal website.

Deciding a lawsuit brought by Verizon, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit struck down the rules. The court said the FCC saddled broadband providers with the same sorts of obligations as traditional "common carrier" telecommunications services, such as landline phone systems, even though the commission had explicitly decided not to classify broadband as a telecom service.

"Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such," Judge David Tatel wrote for the court.

Though the FCC said it might appeal, the ruling for now means Internet-service providers are free to experiment with new types of pricing arrangements, such as charging content companies like Google Inc. GOOG -0.01% or Netflix higher fees to deliver Internet traffic faster. Or, they could choose to degrade the quality of certain online content unless its creators were willing to pay up.

Netflix and Google declined to comment.

Tony Wible, an analyst at Janney Capital Markets, said Internet companies would mount a fight to avoid paying new fees, but he said it was inevitable that over time some of the burden of paying for Internet infrastructure to handle bulging traffic would shift to content providers or consumers in the form of usage-based billing.

"You need to put forth an economic model to finance that investment," he said. "The question is over the price point and who is going to set it."

Nagesh and Sharma paid significant attention to the cold, hard reality with which Kang could not be bothered: bandwidth costs money, and as more and more content goes online and more of that content is high-definition video, someone has to pay the piper.

Left-leaning consumer advocates are free to have their opinion, and there's nothing wrong with relaying their concerns, but Kang's sky-is-falling take on yesterday's court ruling is insulting to the intelligence of her readers and unhelpful in informing the public about the ongoing debate about U.S. broadband regulatory policy.

Economy Regulation Washington Post Wall Street Journal Government & Press Obama Watch Gautham Nagesh FCC Cecilia Kang Amol Sharma