Heartland Institute Experts React to Net Neutrality Ruling by DC Circuit Court

January 14, 2014

The D.C. Circuit Court today struck down the Federal Communication Commission’s (FCC) 2010 “net neutrality” rule requiring Internet service providers to treat all traffic across their networks the same – discriminating against none and favoring none. The court also, however, ruled the FCC may impose its net neutrality rule if it reclassifies broadband as a “common carrier” as it does telephone service.

The following statements from technology policy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at jlakely@heartland.org and 312/377-4000 or (cell) 312/731-9364.

“It is fortunate the Circuit Court did not endorse the FCC’s imposition of net neutrality rules under its ‘general authority.’ That is an improper FCC power grab not delegated to it by Congress via the Communications Act. However, the ruling all but urges the FCC to reclassify broadband under ‘Title II’ as a telecommunications common carrier. Such a designation does not fit the character and purpose of broadband services and would distort the digital marketplace in a way that would discourage innovation and arbitrarily pick winners and losers in the digital economy.

“Government-dictated net neutrality is a heavy-handed solution to a non-existent market failure. Supporters of a vibrant and innovative digital economy dodged a bullet today, but one gets the feeling it won’t be for long.”

Jim Lakely
Co-Director, Center on the Digital Economy
The Heartland Institute

“While this decision may appear to throw a monkey wrench in the net neutrality regime, in reality it leaves the door open for even more harmful changes. Supporters of a free and open Internet now need to be wary of any proposal that would reclassify the Internet as a public utility and therefore subject to Title II regulation, the burdensome regulatory system that has hindered the growth of the telephone market for decades.”

Matthew Glans
Senior Policy Analyst
The Heartland Institute

“This court delivered an unusual win-win outcome in Verizon v. FCC that enabled each party to win on their respective and different must-win issues: the FCC had its core ‘general authority to regulate’ broadband affirmed, and Verizon avoided ‘common carrier regulation of broadband.’

“Specifically, the Appeals Court handed the FCC a big win in ruling that the FCC does have the ‘general authority to regulate’ broadband and ‘promulgate rules governing broadband providers’ treatment of Internet traffic,’ in order to ‘preserve and facilitate’ the ‘virtuous circle’ of innovation that has driven the explosive growth of the Internet. Specifically, the court also handed Verizon and the broadband industry a big win on its top concern in ruling that the FCC does not have the authority to ‘impose common-carrier-like regulation on broadband providers.’

“If the parties do not appeal – and the FCC also works on new broadband information service traffic-rules-of-the-road that comport with this decision – this effectively could settle into a de facto net neutrality peace given that the FCC’s ‘general authority to regulate’ broadband would be unchallenged and the broadband industry’s biggest fear, common carrier regulation of broadband, would be off the table.

“Finally, this decision also underscores the need to modernize the obsolescent 1934 Communications Aaw for the twenty-first century.”

Scott Cleland
Chairman, NetCompetition
Policy Advisor, Telecommunications
The Heartland Institute

“It’s been a long five years for the Constitution, the rule of law, and the American people. President Obama has time and again imposed his radical agenda via regulatory fiat. The People’s Congress has been with increasing frequency cut entirely out of the governing process.

“Chaos has reigned. The president’s rule-by-whim has created endless uncertainty – which has bred economic stagnation. In the midst of this mess comes a moment of Zen: The D.C. Circuit Court has struck down the administration’s unilateral net neutrality imposition, which was an enormous, uncertainty-inducing, investment-dampening power grab ‘solution’ running around vainly in search of a non-existent problem.

“Let’s hope the administration takes this for the lesson it is – that it cannot create jurisdiction and law out of whole cloth, and that it needs to leave the legislating to the Legislative Branch.”

Seton Motley
President, Less Government
Policy Advisor, Telecom
The Heartland Institute

“It should come as no surprise and much celebration that the D.C. Circuit Court smacked down the Federal Communications Commission’s network neutrality regulations this morning. The agency lacks any authority to draft such overweening rules in the first place – as noted when the FCC’s previous attempt also was shot down by the same court in 2010.

“Continuing to grate, however, is the process former FCC Chairman Julius Genachowski and his fellow Democrats Mignon Clyburn and Michael Copps employed to pass their net neutrality rules – in late December when Washington was a virtual media desert. Several heroic legislative attempts to overturn the rules subsequently failed even as the legal battle ground on. The enormous amount of time and money wasted on trashing this completely unnecessary boondoggle is yet another example of the out-of-control nature of government regulators all too eager to flaunt the rule of law.”

Bruce Edward Walker
Policy Advisor, Telecom
The Heartland Institute

The Heartland Institute is a 30-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.