Brian Fung: The D.C. Circuit court has struck down net neutrality. What does that mean for consumers?
Tim Wu: It leaves the Internet in completely uncharted territory. There's never been a situation where providers can block whatever they want. For example, it means AT&T can block people from reaching T-Mobile's customer service site if it wanted. They can do whatever they want.
What else did the opinion say?
The slightly more subtle thing is they upheld some FCC authority under the FCC's Title I or "auxiliary" authority. Under that provision, the court said that the FCC has some authority to regulate broadband. But the court [also] said that the FCC can't impose common carriage rules using its Title I authority.
[The FCC's "Title I" authority allows the agency to lightly regulate "information services," but not to the same extent as the FCC is allowed to regulate telecom companies under what is called Title II authority.]
Where did regulators go wrong in defending the rules?
This was a huge legal error on the FCC's part. The FCC's legal strategy put it in the position of arguing that its rules are not common carrier rules when the two components of the regulation — anti-blocking and anti-discrimination — have been at the center of common carrier regulation since medieval times, around 1450.
[Wu is referring to the English law of public callings and common carriage, which required -- and still require -- certain businesses, such as ferry operators, innkeepers and blacksmiths, to serve all customers without discrimination.]
Seems like the agency boxed itself in.
They blew it on the legal strategy. It's a big fail. It's like, FEMA-level fail. Every legal expert told the FCC they're going to lose this case, and they did. It reminds me of the Bush administration, where everyone said the problem in Iraq isn't going to be the invasion — it's going to be in the aftermath.
Think of it this way: The FCC is like a battleship, and it has these enormous guns. But it decided to use a water pistol for this particular issue. Or, put differently: The FCC is like a car with a massive engine, and they decided not to use the engine but rather the bicycle that was attached to the car.
What could the FCC have done differently?
The obvious alternative would have been to do what the FCC should have done and — in the future tense — now should do, which is to reclassify broadband under Title II authority.
Other observers seem to think that'll be hard to do, politically.
There's an effort to define it that way by the carriers, and to get people in Congress excited about that. But if the FCC doesn't try, as an agency it'll basically be left to allocating spectrum. Striking down the anti-blocking rule forces the agency's hands, despite it being a politically challenging proposition.
Do you think FCC Chairman Tom Wheeler will follow through with an appeal?
I think he has to appeal. You never know -- other judges might see it differently.
Wheeler has said that he'd like to apply net neutrality principles to companies on a case-by-case basis. How does this ruling change that?
The question now is: What is Wheeler made of? Does he stand and defend his agency? Whatever he wants, he needs to have the authority to do it. Right now, he's got nothing. Even if he wants to go case by case, he needs the authority to do it.
There was a dissent to the main court opinion. What did it say?
There's no real dissent. The dissent says that it's obvious these are common carriage-type rules, so the court struck them down. Number two, it thinks the FCC didn't have authority under [Section 706 of the Communications Act]. But it agrees with the majority about the central part, which is that the rules had to go.
But the court seemed to leave the FCC some wiggle room for regulating broadband, right?
They gave the FCC a partial victory in terms of its authority. But it's very weak. It means they have the power to implement things like transparency rules. It means they can force the broadband companies to tell you, for instance, who they're blocking or what speed their networks are running at. But that's all they have.
Suppose Wheeler rewrote the net neutrality rules to cover more than just network operators. Would that be enough to get around the court's objections about common carrier regulation?
The FCC was established in 1934. At the time it had huge general authority to regulate communications. The FCC chose not to use that grant of authority for bad reasons, but its basic job is to regulate communications, not other companies that rely on the Internet. There is a big difference between regulating communications and regulating the Internet. So, actually, I don't think it should extend its authority. It's little bit like electricity regulators deciding they're going to regulate Dell computers or something.
Seems like the court is catching the FCC on a technicality. Is it trying to encourage the FCC to reclassify broadband under Title II?
I think the court hinted that it's receptive to reclassification, yes.
Sorry, I think you're breaking up a bit.
I'm on Skype — which is, ironically, a company that actually owes its existence to net neutrality.