Content Discrimination on the Internet: Calls for Regulation of Net Neutrality

Carol Mullins

(WORK IN PROGRESS – LAST UPDATED 05/27/09)

I. Introduction

            What if the phone company charged you for your phone calls based on who you were or what you were talking about? Would it be fair if it cost you a dime to call your grandmother and tell her about the weather in your area, but fifty cents for your brother to call your grandmother and tell her the same thing? Similarly, would it be fair if it cost you a dime to call your grandmother and tell her about the local weather, but fifty cents to call your boss to tell her that you were sick and could not come in to work? These are essentially the underlying dilemmas that form the basis of discussions on the topic of net neutrality.[1]

            The concept of net neutrality is essentially that entities that enable content exchanges on the Internet should do so in a content-neutral manner.[2] A failure to handle these exchanges without regard to content could result in situations where, for example, Yahoo!’s web content is prioritized so that customers of a particular web service provider can access Yahoo!’s search engine quicker and easier than they can access the search engine of Google, Yahoo!’s competitor.[3]

Like many issues implicating politics and business, net neutrality is an issue that involves proponents calling for government regulation and opponents decrying the idea of regulation and urging society to trust the free market to take care of the issue.[4] Since net neutrality is such a heavily debated topic, this note will not try to offer a new argument about the “what” of net neutrality. It instead proceeds under the assumption that some form of government regulation is desirable, and focuses on the questions of Who and How: who should regulate net neutrality, and how should such regulation proceed? This note will examine a recent decision by the Federal Communications Commission (“FCC”) and describe the efforts made thus far towards regulating net neutrality concerns.

Assuming that net neutrality regulation is needed, it is important to address the issue of which government entity should be in charge of regulating. On the one hand, some citizen groups have urged federal legislation on this topic.[5] Given the potential unfair competition concerns, it is also easy to see how net neutrality could be addressed by the Federal Trade Commission (“FTC”).[6] Finally, because of the implications for the telecommunications industry, this topic has been addressed most often and actively by the FCC.[7] Additionally, if an administrative agency is the appropriate party to address these concerns, it must next be decided whether the issue should be addressed in a rulemaking or through case-by-case adjudications. The distinction between the two policy making methods is important because rulemakings are prospective in nature, but adjudications are typically limited to addressing problems that have already escalated enough to cause significant harm.

Much of this note will concern steps taken by the FCC, which have thus far consisted only of adjudications and policy statements. In August of 2005, the FCC adopted an Internet Policy Statement that set forth four principles “to ensure that broadband networks are widely deployed, open, affordable, and accessible to all consumers.”[8] A few months before the Internet Policy Statement was issued, the FCC had adopted a consent decree terminating investigation into the behavior of a local phone company and DSL provider which had allegedly abused its power as a broadband service provider to block access to VoIP, which is a technology that allows customers to use their broadband connections in place of traditional local phone service.[9]

The FCC also considered net neutrality concerns in situations like mergers and distributions of assets. In 2006, the FCC examined the division of the assets of former broadband provider Adelphia between Time Warner and Comcast, deciding that net neutrality concerns were not implicated, but at that time, the FCC warned that the agency would get involved if an Internet Service Provider (“ISP”) were found to be discriminating against any certain type of Internet traffic.[10] This warning went largely untested until Comcast’s network management practices were subjected to scrutiny in 2008, and Comcast was found to be doing just that by interfering with its customers’ use of specific protocols.[11] This note will provide an analysis of that dispute, especially centering on the net neutrality implications of Comcast’s intentional interference with traffic found to be using the BitTorrent protocol.

Part II will provide a general background of the relevant history of the Internet, specifically about broadband access and the protocols underlying the Internet, as well as background information about the net neutrality debate and the government entities that have been urged to take leading roles concerning this issue. Part II also provides detailed information about the primary peer-to-peer (“P2P”) file sharing protocol that was implicated in the recent FCC decision concerning Comcast’s network management practices. Part III examines the net neutrality debate and how the FCC’s decision about Comcast’s network management practices fits within this debate. Part IV emphasizes the need for bright line rules in a subject area where the applicable administrative agencies have both expressed a preference for case-by-case adjudications.

II. Background

A. Relevant Internet Terminology and Concepts

The Internet is a system that many of us may take for granted, as we exchange e-mails, post in blogs and do much of our shopping from the comfort of our homes, but the Internet is the product of massive technological innovation.[12] Since the transfer of information is a core component of what makes the Internet such an important tool, and the ability to limit the transfer of information is at the heart of the net neutrality debate, this note will first provide a brief background of the Internet. The first Internet demonstration occurred in 1977,[13] so the technology has had over thirty years to develop. Accordingly, a treatment of this topic threatens to be very complicated, but the scope of this discussion will be limited to those aspects directly relevant to the current dispute. This section will first examine the broader picture, providing information about broadband and bandwidth before delving into the more technical information and explaining the importance of protocols to assist the reader in understanding part of the technical context of the FCC’s decision concerning Comcast’s network management practices.

1. Broadband and Bandwidth

Two terms that get thrown around frequently in modern discussions of Internet policy are “broadband” and “bandwidth.” Bandwidth is essentially “the volume of information per unit of time that a transmission medium (like an Internet connection) can handle.”[14] To see the effects of having more or less bandwidth, one common analogy is to imagine a pipe that you are using to transport water; in that situation, a large pipe could transport more water than a smaller pipe could transfer in the same amount of time.[15] The FCC defines broadband as high speed internet access with speeds in excess of two hundred kilobytes per second.[16] Slower internet access such as dial-up is sometimes referred to as “narrowband,”[17] and would be analogous to the small pipe referenced above. Putting the terms together, we can say that the larger “pipes” of broadband service allow you to download information at a higher bandwidth.

The faster speeds of broadband enable the transmission of larger files than would be feasible using a solely “narrowband” system, and there has been an increase in consumer demand for large, high quality files. It is now possible to download, for example, clips of concerts in HD resolution, where a three minute clip could be over 350 megabytes at a high resolution.[18] Broadband and the commercialization of the Internet have led to the development of a variety of applications that require a lot of bandwidth, like on-line gaming and streaming video, and potentially high-bandwidth activities like telecommuting.[19] As bandwidth-intensive services become more common, ISPs are contending with capacity issues related to their available bandwidth.[20]

In allocating the resource of bandwidth, “backbone” service providers provide set amounts to regional service providers, which in turn provide access to individual users.[21] Accordingly, those regional providers inherently have a limit on their bandwidth usage – and yet, offering “Unlimited Bandwidth” has been a marketing technique of ISPs for many years.[22] There is some evidence that broadband providers oversell bandwidth to content providers,[23] perhaps on the assumption that end users would never use the maximum amount allocated. This is an assumption which is becoming less and less safe as demand increases for bandwidth-intensive applications.[24] The practice of overselling bandwidth has been criticized by industry representatives in Australia, who stated that the American practice of offering “unlimited” broadband service packages is a flawed business model.[25]

2. Protocols

Before the Internet existed, one of the challenges for computer networking in general was that the computers in existence were simply not designed to interface with other computers.[26] The functioning of the Internet was made possible by the development of protocols that enabled computers to communicate with each other.[27] A “protocol” has been defined as consisting of “a set of requirements that precisely define [sic] the behavior and characteristics of a specific utility, like file transfer or the transmission of email.”[28]

There are several layers of protocols, with the application layer being the protocol that end users interact with the most.[29] The two general types of protocols that are most relevant to this note are application protocols and networking protocols. TCP/IP, a suite of networking protocols consisting of the Transmission Control Protocol (“TCP”) and the Internet Protocol (“IP”), serves as one of the core technologies of the Internet.[30] IP is focused on getting packets of data from point A to point B, and TCP protects the integrity of the packets of data so that the packets arrive at point B in the same shape that they were in when they left point A.[31] TCP is a crucial protocol, since it protects the integrity of data, but as the Comcast situation shows, TCP does not protect data integrity from a third party intentionally altering the flow of packets during transmission.

B. The Net Neutrality Debate

            Generally, proponents of net neutrality regulation say that the Internet will only reach its full potential if it is free from discrimination against users, uses, and ideas.[32] However, opponents of net neutrality regulation say that the government should not regulate these concerns under the label of “net neutrality,” because that would be dictating what the ISPs can do to manage their bandwidth.[33] As noted above, ISPs have a finite amount of bandwidth available, which supports the argument of net neutrality opponents that service providers should be given deference in how to manage this resource.[34] An article by Tim Wu provides an overview of the net neutrality debate, noting that proponents of net neutrality (“openists”) often place the most emphasis on the importance of allowing innovation by outsiders,[35] while opponents (“deregulationists”) tend to suggest that an unregulated Internet will provide incentives for the current market participants to innovate at the network level.[36]

            This note began with an example of a phone company charging its customers more based on the customers’ identities or the subject of their conversations. However, a caveat is warranted, because the net neutrality debate is not based on keeping consumers from being charged different prices for accessing the Internet. Some ISPs are currently moving away from the “unlimited bandwidth” terminology and are beginning to implement tiered services where the consumers have a limited amount of bandwidth that they can use each month.[37] That situation is not a net neutrality issue. The metaphor of a phone conversation is still accurate, however, because the crux of the net neutrality debate is about restricting content providers,[38] and if you are the person who makes a phone call and disperses information to the person on the other end, you are effectively a content provider.

A common way to frame the net neutrality debate is that opponents of net neutrality would promote a tiered structure where ISPs would charge content providers more to have their content available in “the fast lane” of the Internet.[39] In that situation, which content the consumer would see (or how fast he or she would see it) would depend on how much the content provider was paying.[40] For example, backbone service providers may charge content providers more to guarantee that the content provider’s content would be quickly accessible by consumers.[41]

Net neutrality as a concept, however, also encompasses other discriminatory practices by an ISP against content providers. One example of such practices is when AT&T censored anti-Bush lyrics during a live web cast of a performance by Pearl Jam at Lollapalooza in 2007.[42] Another example, which took place just a month after Lollapalooza, involved Verizon’s refusal to allow a pro-choice organization to use Verizon’s network to distribute opt-in text messages to its subscribers.[43] Discrimination against content providers in the form of creating a “fast lane” on the Internet is probably a more practical concern, but content discrimination like what occurred in the Pearl Jam and Verizon situations is a much more concrete example of what could potentially occur if ISPs and other similar service providers are allowed to prevent specific content from being distributed using the providers’ network.

C. Net Neutrality and the Government

The opponents of net neutrality regulation urge that this issue should be left to the market, without any government intervention.[44] Proponents of net neutrality regulation, on the other hand, often speak of turning to the federal government to protect these concerns.[45] Proponents of intervention by the federal government often refer to the Internet as being a meritocracy, built on the efforts of hardworking individuals with innovative ideas.[46] Such proponents often cite facts such as the creation of Google in a garage and the creation of Facebook in a dorm room.[47] If new content providers with limited funds were relegated to the “slow lane,” the argument goes, this would make it very difficult to establish a customer base, since consumers would be more inclined to use products from more established firms since those firms would have websites that load faster and are more reliable.[48] This note assumes that protecting innovation and ensuring that the meritocracy of the Internet continues to thrive are worthy goals, and thus the next issue is determining who should be placed in charge of ensuring that these goals are met.

Within the first few days of the Obama administration, the White House website contained agenda information concerning the new administration’s stance on technology policy issues.[49] The first agenda item listed indicates that supporting the principles of net neutrality would be a high priority under President Obama.[50] Whether this agenda item will be accomplished by Congressional action or action by an administrative agency (specifically the FTC or the FCC) is something that has yet to be determined.

1. Congressional Legislation and Net Neutrality

            Two bills related to net neutrality went before the House or the Senate in 2008, but neither made it all the way through the process. In the Senate, the relevant bill was the Internet Freedom Preservation Act,[51] and in the House, there was a bill entitled the Internet Freedom Preservation Act of 2008.[52] In April of 2008, a Senate committee hearing was held entitled “The Future of the Internet,” and one of the main issues addressed was net neutrality.[53] In November of 2008, Senator Byron Dorgan expressed his intent to introduce a new net neutrality bill in January of 2009, with the aim of preventing “telephone and cable companies from discriminating against Internet content.”[54]

As of early 2009, independent net neutrality legislation has not been introduced, but the economic stimulus bill has a potential to impact the Internet policy community. The final version of the American Recovery and Reinvestment Act signed by President Obama on February 17, 2009 contains provisions that require recipients of NTIA grants for broadband deployment to adhere to the principles set forth in the FCC’s 2005 Internet Policy Statement.[55] The FCC has been entrusted with designing a National Broadband Plan by February 2010, and in April of 2009, the FCC released a Notice of Inquiry seeking comments concerning the potential content of a National Broadband Plan.[56] Another net neutrality issue arose during the Senate’s consideration of the bill when Senator Diane Feinstein of California sought to insert an amendment into the stimulus bill allowing ISPs to use network management techniques to combat child pornography and copyright infringement,[57] but that language did not make it into the final bill that was signed by President Obama.

Opponents of net neutrality legislation maintain that such legislation is unnecessary since consumers would not stand for discriminatory practices by ISPs, and thus the market would prevent the potential negative results of an unregulated Internet.[58] Nonetheless, this is almost certainly an issue that will continue to appear before Congress until some sort of action is taken in either direction.

2. The FTC and Net Neutrality

The FTC’s statutory mandate is to prevent unfair methods of competition.[59] The FTC was formed in an age where the notion of “unfair competition” was firmly rooted in the tangible, but the nature of living in a “digital age” means that new methods of many old tricks are now possible. In 2006, the FTC issued a statement explaining why the FTC should have jurisdiction over disputes involving broadband providers.[60] The FTC Act denies the FTC jurisdiction over entities considered “common carriers” under the FCC Act,[61] but since DSL and cable broadband are “information services” and do not qualify as “common carriers” under the Act,[62] the FTC reasoned that it has jurisdiction to take steps to protect consumers from unfair trade practices and antitrust concerns raised by the behavior of broadband ISPs.[63] Though the FCC has been a much more active agency with respect to net neutrality concerns over the past several years,[64] 2009 might prove to be a good time to reconsider turning to the FTC on matters of net neutrality, given the FTC’s focus on consumer protection and competition.[65]

As of 2007, the FTC’s official stance on net neutrality emphasizes a focus on case-by-case analysis as specific issues become ripe for enforcement.[66] In general, the FTC urges Congress to be cautious concerning the possibility of net neutrality legislation, and suggests that anticompetitive behavior on the part of ISPs could be adequately addressed via antitrust measures.[67] The FTC has undertaken two significant projects addressing net neutrality. In June of 2007, the FTC released a 170-page report primarily about net neutrality concerns.[68] The report concluded by stating that the current level of oversight by the FTC, FCC, and DOJ were adequate and that Congress should not step in to mandate net neutrality requirements.[69] The report also asserted that claims of potential harms from anticompetitive practices were largely prospective in nature and that such harms had not been seen to occur in practice outside of the context of Madison River,[70] nor was it certain whether discriminatory practices would actually harm consumers.[71]

In November of 2008, the FTC held a series of public hearings and panels entitled “Protecting Consumers in the Next Tech-ade,” which included treatment of the topic of net neutrality.[72] The FTC has not taken additional steps concerning this project so far in 2009, but if the FTC is correct in its analysis that application of antitrust law and unfair competition protections would address the net neutrality issue more effectively than Congressional legislation, perhaps the FTC should become a more visible player in net neutrality disputes.[73] This note, however, takes the position that if the FTC does get involved in net neutrality regulation, the FTC should do so through rulemaking rather than simply through adjudication.

3. The FCC and Net Neutrality

Over the last few years, the main agency that has taken actions implicating net neutrality concerns has been the FCC. The FCC was created by the Communications Act of 1934, which gave the FCC the authority to regulate the telecommunications industry.[74] The FCC’s authority to regulate the telecommunications industry includes the authority to regulate parties that provide “information services,” which includes broadband providers.[75]  The FCC has considered net neutrality concerns in at least three types of contexts prior to the Comcast decision.[76] In addition to proceedings directly addressing alleged discriminatory conduct, net neutrality concerns were raised via public comment in the contexts of mergers and of redistribution of the assets of companies.

The first notable investigation of alleged discriminatory conduct was Madison River, where a local phone company and DSL provider was alleged to be blocking ports for VoIP traffic and was fined $15,000 as part of the consent decree.[77] Clearly, a phone company that directly interferes with its customers’ ability to use a competing product for phone service would be engaging in questionable practices. However, Madison River may not be good precedent, since it was decided in March 2005 under the legal theory that a DSL provider was a common carrier, and that legal theory was revised following the Brand X decision that same year.[78] Under a ruling handed down by the FCC in August of 2005, DSL and cable now are both considered information service providers under the Telecommunications Act.[79]

One example of net neutrality concerns being raised in the context of division of a company’s assets was in 2006 when the FCC oversaw the redistribution between Time Warner and Comcast of the business assets of Adelphia Communications.[80] Commenters to that proceeding expressed concerns that Time Warner and Comcast might engage in discriminatory practices affecting content.[81] The FCC found that neither Time Warner nor Comcast had willfully engaged in any discriminatory practices against any type of content, but invited any parties to file a complaint with the FCC if any company were found to be engaging in such discriminatory practices in the future.[82]

An example of the FCC’s examination of net neutrality concerns in the context of a merger is the FCC’s handling of the AT&T/BellSouth merger in 2007.[83] The FCC examined the record and concluded that the merger did not raise any concerns that the merged firm would discriminate against or degrade packets.[84] In the merger agreement, AT&T/BellSouth agreed not to provide or to sell “any service that privileges, degrades or prioritizes any packet transmitted over AT&T/BellSouth's wireline broadband Internet access service based on its source, ownership or destination.”[85]

An example of a non-adjudicatory activity on the subject is the FCC’s Internet Policy Statement, which was issued in 2005 a few months after the Madison River consent decree.[86] The Internet Policy Statement sets out four things to which consumers are entitled with regards to the Internet: the freedom to access the content of their choice; the freedom to use the applications of their choice; the freedom to access the Internet using their choice of devices; and a marketplace that fosters “competition among network providers, application and service providers, and content providers.”[87] All aspects of the Internet Policy Statement defer to the reasonable network management practices of the broadband providers, and the policy statement is explicit that the freedoms apply only to legal consumer activity.[88] Moreover, the Internet Policy Statement is purely a statement of policy to be taken into consideration by the FCC in future policymaking activities, and is not binding precedent for the FCC.[89]

The Internet Policy Statement was most likely guided by the four Internet freedoms enumerated by former FCC Chairman Michael Powell in 2004.[90] The only real difference in the freedoms listed by Powell is that the fourth freedom Powell lists is not a pro-competition freedom, but rather that consumers should be entitled to obtain “clear and meaningful information” concerning their Internet service plans.[91] It is unclear why the FCC adopted the other three freedoms almost verbatim, but did not attempt to protect a consumer’s right to information.

4. Administrative Agencies and Policymaking

Given administrative agencies’ importance in this debate, it is important to note that even if a particular administrative agency is assigned the task of regulating net neutrality concerns, the debate would not stop there. The next issue concerns how an administrative agency should create policy on this topic. An administrative agency’s two primary methods for policymaking are rulemakings, which are prospective in nature, and adjudications, which are analogous to cases resolved in traditional courts.[92]

In Chenery, the Supreme Court expressed a preference that administrative agencies should, when possible, fill in gaps in legislation through rulemaking rather than adjudication.[93] The Court reasoned that an administrative agency’s power to set prospective rules meant that an agency generally has “less reason to rely upon ad hoc adjudication to formulate new standards of conduct.”[94] However, the Chenery Court acknowledged that some situations would be more appropriately resolved by adjudication than rulemaking.[95] Situations where adjudication may be more appropriate include the emergence of problems which an agency could not reasonably foresee, situations where an agency has insufficient experience with a problem to justify setting a hard and fast rule, or problems which are “so specialized and varying in nature as to be impossible of capture within the boundaries of a general rule.”[96] The debate between rulemaking and adjudication in addressing disputes is one that the FCC brought to the forefront in its recent adjudication concerning Comcast’s network management practices,[97] and is one which will soon have to be resolved conclusively in order for net neutrality regulation to go forward.

D. The Technology at Issue: BitTorrent

            The recent FCC decision that this note examines was in response to how Comcast chose to manage its network traffic: by blocking user uploads of data via several P2P protocols, including the BitTorrent protocol.[98] It would be easy, but inaccurate, to frame the dispute as Comcast discriminating against software in the interest of deterring customers from downloading copyrighted media. To stifle the temptation to turn to a simpler answer, this subsection examines BitTorrent in detail to illustrate how this technology became a key player in the recent FCC decision about Comcast’s network management practices.

1. Technology of BitTorrent

BitTorrent is a P2P file-sharing technology that ultimately uses a very small file to allow users to download a particular large file.[99] Unlike traditional P2P file-sharing programs, which typically provide a centralized search system to allow users to find files, the BitTorrent system is entirely decentralized, relying on .torrent files to connect users to trackers, which list the other users who have the file open in their BitTorrent download client.[100] There are several BitTorrent download clients available, but when this note uses the term “BitTorrent,” it is actually referring to a protocol used for transferring data.[101] BitTorrent is not a networking protocol like TCP or IP, but is instead an application protocol similar to SMTP, which is the protocol that enables e-mail usage.[102]

Using BitTorrent takes several steps. First, a user must install a BitTorrent client to allow use of the .torrent files.[103] When a user chooses to download a file using BitTorrent, he or she launches the .torrent file, and the computer instructions given in that file essentially begin to build the requested file from smaller parts of the file that are obtained from different users on the Internet who currently have that .torrent file running, including people who are in the process of downloading the file themselves.[104] The decentralized nature of file transfers using the BitTorrent protocol means, among other things, that it is very difficult to halt the unauthorized distribution of a given file, since the potential number of sources increases with each new downloader.[105]

2. Uses of BitTorrent

BitTorrent was created by Bram Cohen in 2001.[106] One of the motivations behind creating this new file-sharing system was to provide services to fans of “jam bands.”[107] These bands gave explicit permission for recordings to be made of their live shows and for these recordings to be redistributed to other fans, but this led to a problem of how to distribute these recordings.[108] Cohen’s new BitTorrent protocol enabled these fans to quickly and easily distribute these recordings with the consent of the artists.[109] Cohen designed BitTorrent so that file sharing with this system would be more in line with the “golden rule,” essentially requiring people to upload more if they want to be able to download files at faster speeds.[110]

Because a .torrent file is just a small text file that includes pointer information, and the larger target file does not need to be stored on the same server as the .torrent file, it follows that it is very cheap to host a very large number of .torrent files on one website – including websites that encourage the use of .torrent files for the purpose of copyright infringement. One of the most infamous websites for this purpose is The Pirate Bay, which is based in Sweden and distributes primarily copyrighted material using .torrent files.[111] Cohen has stated that he has never used his own protocol to download illegally,[112] and called it “patently stupid” for users to use BitTorrent to distribute files in violation of copyright, since BitTorrent was never designed to be an anonymous system.[113]

Since the FCC’s Internet Policy Statement is explicit that consumers’ activities should only be protected insofar as their conduct is legal, Comcast’s discrimination against users of the BitTorrent protocol would not warrant intervention by the government if the protocol itself were illegal. However, in spite of BitTorrent’s use in piracy, it is highly doubtful that use of the protocol will be made illegal for two reasons: first, BitTorrent has substantial noninfringing uses; second, BitTorrent was not originally distributed for the purpose of copyright infringement.

In Sony Corp. of Am. v. Universal City Studios, Inc., the manufacturer of the Betamax Video Tape Recorder (“VTR”) was found to not be infringing on the copyright of the studios because the VTR was capable of “substantial noninfringing uses.”[114] BitTorrent is frequently used to distribute many kinds of copyrighted works with the consent of the creator[115] and to distribute materials that are in the public domain.[116] For example, Linux-based operating systems, which are open source,[117] are frequently distributed through BitTorrent,[118] and BitTorrent is also the default (and sometimes the only) download method for many players of World of Warcraft when they have to download and install official game patches.[119]

The second reason that use of the BitTorrent protocol will likely never be made illegal is because of the underlying purpose of the creation of BitTorrent. In the landmark case of MGM v. Grokster over twenty years after Sony Corp., the Supreme Court found that Grokster, in spite of having substantial noninfringing uses, had induced copyright infringement because the software was distributed for the purpose of enabling copyright infringement by users.[120] The same is not true of BitTorrent, which was created explicitly for noninfringing uses, such as the authorized distribution of recordings of jam band concerts.[121] Thus, while it is unfortunate that BitTorrent is a system that has made piracy easier, it would be inappropriate to prohibit all uses of the protocol, since that would also prohibit completely legitimate uses. Since use of the BitTorrent protocol is and will remain legal, the FCC’s Internet Policy Statement can be applied to protect the rights of users of the BitTorrent protocol as long as those users are themselves engaging in legal activity.

3. Where BitTorrent Is Today

Similar to how Napster became a for-profit distributor of legal music,[122] the entertainment industry took notice of the potential for profiting using BitTorrent as a new method of digital file distribution.[123] Bram Cohen now operates BitTorrent Entertainment, which offers paid downloads for thousands of movies, television shows, songs, and computer games.[124] The illegal uses are still occurring, but U.S. authorities have been successful in shutting down many domestic websites that were once hosting unauthorized .torrent files.[125]

III. Discussion and Analysis

            Up to this point, this note has focused on providing background information about the dispute, seeking to provide answers to the questions of: what is “net neutrality;” what entities can regulate net neutrality concerns; and what is it about BitTorrent that puts it in a position to be at the center of a net neutrality dispute. This section of this note will provide more insight into the views on both sides of the net neutrality dispute and will detail the repercussions of a recent FCC decision that affects how ISPs may manage their network traffic.

A. Arguments Concerning Net Neutrality

            Tim Wu and Christopher Yoo are legal scholars who are on the opposite sides of the net neutrality debate, but they both view competition as being essential to innovation, though they differ on how to best encourage competition.[126] Wu, for example, is a strong proponent for net neutrality and emphasizes encouraging competition by protecting ease of market entry at the content and application level of the Internet.[127] Wu’s logic is that if a company could pay an ISP to prioritize its website so that the company’s site would be accessed more quickly than the websites of its competitors, this would make it more difficult for a small competitor to break into a market that is already arranged in a hierarchy.[128] Taken to the extreme, this same approach to net neutrality typically also fears the possibility that one company could actually receive an almost exclusive license with an ISP in a particular area.[129]

Christopher Yoo, on the other hand, suggests instead that efforts should be made to protect competition at the “last mile” – that is, make more Internet access options available to consumers, such as G3 and fiber optic lines.[130] From Yoo’s perspective, allowing service providers to discriminate against content providers in choosing how to manage their bandwidth would actually encourage more innovation to help make alternatives to DSL and cable broadband services more economically viable, thus assisting in market entry at the network level.[131] Yoo acknowledges the possibility that discriminatory conduct could be undertaken for the purpose of harming competition in his proposed scenario, but believes that in that situation, engaging in discriminatory conduct may be “an understandable attempt to prevent high-volume users from imposing congestion costs on other users.”[132]

This note aligns more with Wu in terms of viewing a neutral Internet as being essential to enabling market entrance by smaller content providers. However, the debate surrounding net neutrality is a very detailed one, with many different concerns addressed. Opponents of net neutrality regulation justify their perspectives in a variety of ways. Randolph May argues that a government mandate that ISPs must refrain from discriminating against content would violate the First Amendment rights of the broadband providers to choose what messages to convey.[133] Others, like Yoo, focus on the potentially harmful effects of regulation on innovation at the network level.[134] Some commentators have examined the technical background of the Internet and thereby concluded that the Internet was never intended to be neutral, and these commentators instead encourage some kind of middle ground.[135]

Many proponents of net neutrality regulation focus on the benefits to application innovation.[136] In the context of examining spillovers, Professors Frischmann and Lemley conclude that the overall value of preserving innovation at the applications level may be more important than encouraging innovation at the network level.[137] As noted above in Part II in the context of the FTC and the FCC, the Supreme Court’s Brand X decision validated the FCC’s categorization of cable providers as “information services” instead of as “telecommunications services.”[138] This is another aspect of the issue that has upset many net neutrality proponents,[139] who would much prefer the statutory guarantee protecting consumers from “unjust or unreasonable discrimination” by communication services designated as common carriers.[140] That aspect of the net neutrality debate is beyond the scope of this note, but the tradeoff between common carriers and information services may not be wholly negative from a net neutrality perspective, since designating these services as “information services” in fact opened up broadband providers to regulation by the consumer-oriented FTC.[141]

B. The FCC Decision Concerning Comcast’s Behavior

The central player in the situation that this note examines is Comcast Communications. According to Comcast’s website, Comcast is the nation’s largest provider of cable services, including cable television, Internet, and broadband phone services.[142]

1. What Comcast Did

            It is first important to note that, pursuant to the FCC’s Internet Policy Statement, ISPs are afforded some deference when it comes to deciding how to manage the provider’s available bandwidth as long as the ISPs are using “reasonable network management” practices.[143] Thus, whatever behavior Comcast engaged in would be subjected to a reasonableness test by the FCC.

            In late 2007, studies uncovered that Comcast customers using the BitTorrent protocol were experiencing delays in their file transfers.[144] At first, Comcast denied any interference, but later admitted to interfering with network traffic as a method of managing Comcast’s bandwidth.[145] Comcast’s network management practices included targeting users of the BitTorrent protocol.[146] Once the Comcast system located BitTorrent traffic, the system would force an RST packet into the stream of information that was flowing between the users.[147] This would reset the connection, and in many instances would result in the BitTorrent client being unable to reconnect to resume downloading or uploading the target file.[148]

In addition to interfering with traffic, Comcast was found to be giving false or misleading answers when faced with questions about slow connections.[149] First, Comcast denied interfering with any P2P traffic.[150] Then, when studies demonstrated that the delay was a problem on Comcast’s end, Comcast admitted that the Comcast system was causing the delays, but only during times of peak network congestion.[151] When a final study revealed that the delays were occurring at the same rate regardless of the time of day, making it clear that either Comcast was lying or Comcast’s networks were equally congested 24/7, Comcast finally came clean and admitted that their P2P management system was triggered regardless of the overall network congestion or the time of day.[152] Two “Internet user watchdog groups,” Free Press and Public Knowledge, filed with the FCC on November 1, 2007 to request that the FCC investigate and discipline Comcast accordingly.[153]

2. What the FCC said

Since 2005, the FCC has made multiple statements indicating that they were watching for signs that ISPs were discriminating against applications or content, and that if a situation like that came up, the FCC would take action on it.[154] If the FCC had found that Comcast’s behavior did not violate any rules or principles, such a decision would have been inconsistent with the FCC’s prior statements. As such, the FCC was in a position where they practically had to find that Comcast was in the wrong.

a. The FCC found that it had jurisdiction to decide on this matter

Comcast first challenged whether the current dispute was within the FCC’s jurisdiction, so the FCC’s ruling on this matter provided a lengthy analysis of the source of the agency’s authority.[155] Since Comcast is a provider of “information services,” the FCC has a potentially limited authority to adjudicate, but the FCC stated that they had ancillary rights to regulate the behavior of broadband services under several situations.[156]

One of the justifications that the FCC found for its authority to decide this matter was that Comcast had received an abeyance from a court in Northern California on this very issue, on the grounds that the California court did not have jurisdiction over the dispute since it was within the sole subject matter jurisdiction of the FCC.[157] Additionally, the FCC found that Comcast had waived any potential objections to a finding that the FCC had jurisdiction in this matter because both Comcast and Free Press were party to the Adelphia proceeding of two years prior, during which the FCC had issued an order which included a warning that future allegations of discriminatory broadband provider practices would be investigated by the FCC.[158] The FCC reasoned that if Comcast objected to the FCC’s jurisdiction over the issue at hand, Comcast should have raised an objection following the issuance of the Adelphia order in 2006.[159]

b. The FCC’s Justifications for Choosing Adjudication

The FCC’s decision provided three reasons why case-by-case adjudications of Internet policy disputes were more appropriate than formal rulemakings. The three justifications for choosing adjudication were: 1) the Internet is too new of a medium to promulgate rulemakings; 2) differences between the networks would make it difficult to promulgate a rule that applies effectively to all providers of broadband services; and 3) adjudications, rather than rulemakings, are more in line with the Telecommunication Act’s focus on a policy that would preserve a “vibrant and competitive free market” and the FCC’s own precedent emphasizing a need for minimal regulation of the Internet.[160] Case law urges administrative agencies to use quasi-legislative rulemakings, rather than ad hoc adjudication, to fill in gaps in the agency’s organic statute whenever possible,[161] so it is important to analyze the FCC’s reasoning in order to determine whether the Internet should in fact be one of those topics for which oversight is more appropriate in the form of adjudication.

i. Is the Internet a Sufficiently New Technology?

In spite of the general preference for rulemaking to fill in gaps left by the legislature, the FCC insists that broadband issues are more suited for adjudication, citing the Internet’s status as a “new medium” as one reason for this preference.[162] On first glance, the “newness” of the Internet appears to be the strongest justification for choosing adjudication over formal rulemaking. However, careful analysis seriously calls into question the FCC’s reliance on this factor. Considering that private consumers began connecting to the Internet in the early 1990s,[163] and the key DARPA Internet experiment took place in 1977,[164] this begs the question of how old a communications technology must be before the FCC will no longer consider it a “new medium.”

One obvious parallel is to look at the history of regulation of cable television. Cable television was invented in 1948 (originally called “Community Antenna Television,” or CATV),[165] and by 1972, the FCC had begun regulating CATV through the rulemaking procedure.[166] Considering that the FCC had engaged in full rulemaking within twenty-four years after the invention of CATV, the FCC’s argument that a thirty-two year old technology is still too “new” for rulemaking becomes tenuous at best. Accordingly, the Internet’s “newness” should not be considered a factor that justifies a policy favoring adjudication.

ii. Are network management practices among providers too varied to be regulated?

The last sentence of the FCC’s second reason states “[t]his is not to say that general rules could not apply to all such systems, but only that, given the present record, we are not certain that a one-size-fits-all approach is good policy.”[167] The FCC’s language in this second justification is remarkably weak relative to the “newness” justification, which the above section reveals as being fundamentally flawed. Clearly, the FCC just does not know what to do and does not yet have enough information. The FCC even complains that broadband providers are cryptic concerning their network management practices.[168]

If broadband providers are being cryptic about their network management practices, that has significant implications for consumer protection. Subscribers to broadband services should undeniably have the right to know if there is a possibility that their broadband provider is managing subscribers’ connections in a way that could potentially be harmful to the subscribers’ devices or their data. The FCC does have an interest in protecting consumers, so this dismissive “We don’t know” justification is troubling. If the FCC is faced with a lack of information, the responsible thing to do would be to research the issue to remedy that lack. It is possible that the FTC could also assist the public in obtaining this information from broadband providers, but the FCC’s simple doubt about whether a rulemaking would be “good policy” does little to support this justification in favor of adjudication.

iii. Would Adjudication Do More than a Rulemaking to Protect Competition?

Net neutrality commentators have engaged in many debates on the very subject addressed in the FCC’s third justification for adjudication.[169] There is a potential trade off either way, whether net neutrality regulations are implemented or not. Opponents of net neutrality regulation project that in a world without such regulations, owners of the networks will have more incentive to innovate in order to compete with each other.[170] Conversely, net neutrality proponents believe that in a society where government regulation ensures that the network providers cannot apply discriminatory network management practices, competition among content providers will be richer and market entry will be easier for new participants.[171] In any case, competition is clearly a key issue, since the fourth entitlement for consumers according to FCC’s Internet Policy Statement is the protection of a competitive broadband environment – all kinds of competition, whether between network providers, application providers, or content providers.[172]

By not acting to regulate net neutrality, the FCC has implicitly stated that competition among broadband providers is more important than competition among content providers, even though the FCC’s Internet Policy Statement does not rank one as being more important than the other. Even without taking the policy statement into consideration, this justification is still lacking. While a preference for protecting competition among network providers is not as unsupported as the first two justifications for preferring adjudication, the polarity that exists between protecting innovation at the network level and protecting innovation at the content level means that a significant question exists that the FCC has not fully addressed yet. Accordingly, this justification also fails as being too weak to stand on its own. The FCC has thus failed to justify choosing adjudication over rulemaking to resolve Internet policy concerns.

c. What the FCC said about Comcast’s behavior, and what remedies were appropriate

The FCC has declined to adopt preventative rules at this time, stating that a case-by-case analysis is appropriate given the ever-changing state of the Internet and the surrounding industry.[173] The FCC ultimately concluded that Comcast’s behavior was not a reasonable network management practice.[174] The FCC pointed out that, as a source that allows consumers to purchase and download videos to watch on their home computers, BitTorrent Entertainment was one of Comcast’s competitors.[175] The FCC examined Comcast’s practices and concluded that the practices were “invasive and outright discriminatory,” relying in part on anecdotal evidence about customers whose legal uses of BitTorrent had been delayed by Comcast’s practices.[176]

The FCC’s analysis of the reasonableness of Comcast’s practices purports to require a “tight fit” between Comcast’s chosen practices and the significant goal of network management.[177] The FCC concludes that Comcast’s practice was overinclusive, since it would delay the traffic of any customer using a particular P2P protocol, regardless of how much that customer’s P2P usage contributed to network congestion.[178] The FCC also pointed out that Comcast’s failure to disclose the relevant practices to its customers was especially problematic, because such nondisclosure compounded any anticompetitive harm caused by these practices.[179]

During the proceeding, Comcast committed to end these discriminatory practices before the end of 2008 and instead institute a “protocol-agnostic network management technique.”[180]  Upon a finding that Comcast’s present network management practices were unreasonable, the FCC did not fine Comcast but instead directed Comcast to implement that which Comcast said it would implement, disclose to the FCC how Comcast had been interfering with BitTorrent, and disclose to the FCC how Comcast would proceed with implementing protocol-agnostic network management practices.[181] Comcast was given thirty days from August 20, 2008 to submit written descriptions of their past discriminatory activity and their future plans for implementing a non-discriminatory network management technique, with a warning that if Comcast did not comply with this thirty day deadline, further proceedings would be undertaken by the FCC.[182]

On September 19, 2008, Comcast submitted the requested response.[183] As had been theorized by the EFF in their November 2007 white paper on the topic,[184] Comcast confirmed that they had utilized the services of a company called Sandvine to assist with their network management practices.[185] Beginning in 2005, Comcast began implementing a system that would manage protocols that were found to place “excessive burdens on the network.”[186] In 2007, Comcast achieved wide-scale deployment of the protocol management system.[187] Comcast maintained that the inspection system was content neutral, and that the equipment did not obtain any information concerning the files being transferred except to determine what protocol was in use.[188] Comcast also reported that, even with that network management system in place, P2P traffic comprised about half of all of the upstream traffic on Comcast’s broadband network.[189]

 Comcast promised the FCC that it would end the current network management practice at issue by the end of 2008.[190] Comcast pledged that, in its place, the company will implement a “protocol-agnostic” network management system that would manage network resources during times of congestion by deprioritizing the network traffic of users who are using a disproportionate share of the network’s bandwidth.[191] Comcast stated that the transition to this protocol-agnostic congestion management system was underway at the time of Comcast’s September response to the FCC, and that the transition was to be completed by the end of 2008.[192]

By the middle of January 2009, Comcast had again come under scrutiny by the FCC for its network management practices.[193] The FCC sent Comcast a letter on January 18, 2009, requesting clarification on an item in the information that Comcast sent to the FCC in September detailing Comcast’s planned network management practices.[194] The letter from the FCC references the Comcast website, which includes information stating that Comcast’s VoIP customers will not be affected by the new network management technique, but that customers who use other VoIP providers may experience degradation of VoIP call quality.[195] The implication was that treating VoIP customers differently, depending on whether they used Comcast’s VoIP or a competitor’s VoIP, directly implicated the same concerns about discrimination that got Comcast in trouble in the first place. The FCC’s letter requested a response from Comcast by January 30, 2009. Comcast responded to the FCC’s inquiry by asserting that the differing VoIP treatment was not a result of any behavior with regard to the content being transmitted on Comcast’s High-Speed Internet lines, because Comcast’s VoIP traffic was not routed using Comcast’s High-Speed Internet lines.[196]

IV. Recommendations: What Impact Should the FCC’s Comcast Decision Have?

            This situation demonstrates that some form of strong government intervention is needed in order to clarify this issue and prevent companies from taking advantage of the current system’s vagueness. The FCC was very clear in the Adelphia order that they would step in if they saw a company doing exactly the thing that Comcast was doing,[197] and they (mostly) kept their word. Robert Entner of IAG research noted that Comcast has received a light slap on the wrist, with the implication being that the next company who behaves in such a way could lose a whole hand.[198] Is the latter part of that statement accurate? Virtually nothing was done against Comcast other than to tell Comcast to do what it claimed it was already planning to do. The FCC was not in a position to say that Comcast had not engaged in wrongful conduct, because then the FCC would have been going against its own prior statement to the contrary.[199] This note suggests that the FCC’s handling of this situation was inadequate, since Comcast was merely advised to behave, and that a better method of resolving this type of dispute would be to begin the process of setting forth a prospective rulemaking to ensure that all parties are on notice of prohibited conduct.

A. Criticism of the Remedy

Some critics of this decision may claim that the FCC was unduly harsh, blaming the result on Chairman Kevin Martin’s apparent bias against the cable industry.[200] This note argues, however, that the FCC did not go far enough in this situation since the remedy was so mild. The mildness of the remedy may be due in part to the fact that Comcast and BitTorrent had settled their differences before the FCC decision was handed down,[201] but that still does not make the remedy adequate. It is, however, encouraging that the FCC has continued to keep an eye on Comcast’s network management practices, particularly with regard to its VoIP service.[202]

B. How Should This Situation Be Handled?

The FCC makes it explicit in the Internet Policy Statement that the policy statement is not a rule.[203] In the current dispute, the FCC made it clear that they were purely handling this dispute by adjudication and not by a rulemaking, due in part to the changing nature of the Internet.[204] The FCC’s current approach favors case-by-case adjudications, although such adjudications render it impossible to prevent harm. The FCC’s position is that case-by-case adjudications of net neutrality-related disputes are preferable to bright line rules that would put broadband providers on notice of forbidden activity. This note disagrees with such a premise, suggesting instead that, at the least, this dispute should have prompted further study to determine if a rulemaking by the FCC would be appropriate to address this concern.

            Considering that the current dispute involved Comcast making business decisions that had a negative impact on a competing seller of entertainment products, perhaps it would have been appropriate for this dispute to have been heard before the FTC in order to address the unfair competition concerns. Addressing net neutrality concerns through congressional action is also a possibility, even though neither the FCC nor the FTC seems to think that prospective rules are appropriate in this context.

The FTC is of the opinion that net neutrality legislation would be an inappropriate route to take,[205] and the FCC has expressed a preference for case-by-case analyses of these sorts of disputes.[206] The FTC has not definitively indicated a preference for rulemaking or adjudication in the context of broadband policy, but the FCC’s resistance to rulemaking is troubling. If setting bright line rules is not an option in addressing net neutrality concerns, then the only remaining option would be to treat the harmful effects of discriminatory actions only when (or if) the actions are uncovered and brought before an entity with the authority to decide the dispute. That seems to create a difficult situation where problems are not resolved except on an ad hoc basis before an administrative agency or a court. Such a scheme can be cost prohibitive, given the high cost of adjudication, making it less likely that injured parties will bring claims. Additionally, while the more visible instances of content discrimination, such as AT&T’s censorship of political speech during a web cast of a Pearl Jam concert,[207] are readily perceptible by the public at large, subtle degradation of service and content by ISPs is likely to be overlooked by most Internet users.[208] If users do not realize that their Internet service quality is being harmed by their ISP’s behavior, and instead assume that a slow connection with one particular website or service is because “the other guy” has a slower server, it is unlikely that they will take their own ISP to task. 

One of the best justifications for legislation or rulemaking is that legislation and rulemaking are proactive rather than reactive. Case-by-case analyses can be very effective, but at some point, standardization and clear rules are desirable. If the administrative agencies continue to resist rulemaking, Congress should intervene in the interest of setting forth clear guidelines. Congress could either put a firm scheme in place to protect net neutrality, or mandate that a rulemaking would be appropriate and then delegate the execution to the appropriate administrative agency.

Even if Congress does not act on the net neutrality issue and instead leaves it to the discretion of the FTC and the FCC, these agencies should not take that discretion as a license to do nothing. The current method of case-by-case analysis serves to avoid setting bright line rules, and arguably gives the broadband provider industry leeway to find more creative ways of discriminating against content. Other industry actors might prove more successful than Comcast in arguing that they were not on notice that their activities went against the FCC’s policy. A system of case-by-case analysis without a bright line rule invites wrongdoers to find loopholes and threatens to multiply the number of unreported injuries.

The process of setting a bright line rule on this issue at first appears to be a daunting task. However, the FCC’s Internet Policy Statement already sets much of the necessary framework for such a rule.[209] Further research would be needed to structure a rule that could be consistently applied to all broadband providers, and it would be necessary to adhere to the procedural requirements of either codifying the Internet Policy Statement or formally adopting it as a rule. Regardless of the additional work that would be needed, however, the fact remains that the Internet Policy Statement already provides a strong beginning for any regulations to protect net neutrality. Accordingly, the Internet Policy Statement should be closely consulted by any party that undertakes to form regulatory policy to protect this important concern.   

V. Conclusion

            The net neutrality debate illuminates a very important issue in modern society. Protecting net neutrality would serve to encourage innovation and competition at the application and content levels of the Internet, a goal consistent with the FCC’s Internet Policy Statement. However, the confusion over which government entity should address this issue, and how, renders it difficult to make progress to protect this important interest. When Comcast chose to discriminate against network traffic based on the protocol being used, they may have inadvertently brought the net neutrality debate to the forefront of national policy.

Prospective guidance is needed at this stage to clarify the roles of the courts and administrative agencies in protecting the interests of Internet content providers. This guidance could be provided by Congress, but rules promulgated by an administrative agency would also serve to fill this gap. The courts and agencies require the type of guidance that legislation and rulemakings can provide, and the law must continue to evolve to address new incarnations of threats to competition and consumer autonomy.

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[1] However, it is important to note that the telephone metaphor is not to be taken literally from a legal perspective, because telephone companies are “common carriers.” Common carriers are already explicitly forbidden from discriminating based on content or content provider. 47 U.S.C. § 202 (2008). Broadband service providers, on the other hand, are “information services” rather than “telecommunications services,” and thus are not common carriers. See Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Serv., 545 U.S. 967, 1000 (2005) (affirming the FCC’s categorization of cable Internet providers as “information services”). Because broadband providers are not common carriers, their decisions with regard to discrimination based on content tend to be based on market forces, such as when a non-“common carrier” cable television provider decides which cable channels to carry in a particular locality. See Christian Hogendorn, Broadband Internet: Net Neutrality Versus Open Access 2 (Center for Network Industries and Infrastructure, Working Paper No. 2006-09, 2006), available at http://ideas.repec.org/p/cni/wpaper/2006-09.html (distinguishing between common carriers and non-common carriers). The question with regard to this sort of differential treatment, as the phone service metaphor poses, is whether that is “fair” in the context of the Internet.

[2] See Open Internet Coalition: Common Questions, http://www.openinternetcoalition.org/index.cfm?objectid=00175D28-F1F6-6035-BF6EA329CD5BD3F4 (last visited Mar. 11, 2009) (suggesting that network operators should use methods of managing their networks that don’t discriminate based on content).

[3] This hypothetical situation is similar to one put forth by Tim Wu. Tim Wu & Christopher Yoo, Keeping the Internet Neutral?: Tim Wu and Christopher Yoo Debate, 59 Fed. Comm. L.J. 575, 582 (2007).

[4] See, e.g., Tim Wu, Why Have a Telecommunications Law? Anti-Discrimination Norms in Communications, 5 J. on Telecomm. & High Tech. L. 15, 28 (2006) (“[A]n anti-discrimination rule that creates strong ex-ante norms can be an effective measure for preventing private suffocation of what would otherwise be a vibrant information network.”) [hereinafter “Wu, Anti-Discrimination”]; Christopher S. Yoo, Would Mandating Broadband Network Neutrality Help or Hurt Competition? A Comment on the End-to-End Debate, 3 J. on Telecomm. & High Tech. L. 23, 57 (2004) (suggesting that allowing network owners to differentiate themselves “can foster innovation by allowing a wider range of network products to exist”) [hereinafter “Yoo, Help or Hurt”].

[5] See, e.g., Save the Internet: Frequently Asked Questions, http://savetheinternet.com/=faq#congress (last visited Mar. 11, 2009) (praising the bill brought in the House of Representatives known as the Internet Freedom Preservation Act of 2008).

[6] The FTC has statutory authority to address unfair methods of competition. 15 U.S.C. § 45 (2008). The statute, however explicitly excludes the FTC from regulating unfair competition among common carriers. Id. Since broadband service providers are not common carriers, however, it follows that regulating unfair competition matters affecting broadband providers would fall within the FTC’s jurisdiction. FTC’s Prepared Statement on FTC Jurisdiction over Broadband Internet Access Services, http://www.ftc.gov/os/2006/06/P052103CommissionTestimonyReBroadbandInternetAccessServices06142006Senate.pdf (June 14, 2006) [hereinafter FTC Jurisdiction Statement].

[7] See Madison River Communications, LLC, 20 F.C.C.R. 4295 (2005) (examining the subject matter in the context of a DSL provider that was alleged to be discriminating against customers’ use of VoIP); Adelphia Communications Corp., 21 F.C.C.R. 8203, 8298 para. 220 (2006) (discussing the potential for blocking internet content in the context of the dissolution of Adelphia and the redistribution of Adelphia’s assets to Time Warner and Comcast); AT&T Inc., 22 F.C.C.R. 5662, 5727 para. 121 (2007) (finding no evidence that the merger will result in the firm engaging in packet discrimination or degradation). 

[8] Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Policy Statement, 20 F.C.C.R. 14986, 14987-88 para. 4 (2005) [hereinafter Internet Policy Statement]. The elements of the Internet Policy Statement are detailed infra in Part II.C.3.

[9] Madison River Communications, 20 F.C.C.R. at 4297 para. 3. “VoIP” stands for “Voice over IP,” which is a technology that allows customers to receive phone service over broadband Internet. See Vonage – A Better Way to Phone for Less, http://www.vonage.com/help_voip.php (last visited Mar. 11, 2009).

[10] Adelphia Communications Corp., 21 F.C.C.R. at 8299 para. 223 (citing the Internet Policy Statement and stating that, although the policy statement is not a set of formal rules, future activities would be measured against the principles set forth in that policy statement).

[11] Free Press, 23 F.C.C.R. 13028, 13028 (2008) (examining Comcast’s network management practices that were focused on delaying a particular method of file transfer).

[12] See generally J.R. Okin, The Internet Revolution ch. 2 (2005) (providing background information on the history of the Internet and ARPANET).

[13] Id. at 326.

[14] Tim Fisher, Bandwidth Definition – What is Bandwidth?, http://pcsupport.about.com/od/termsb/g/bandwidth.htm (last visited Mar. 11, 2009).

[15] Id.

[16] FCC Information Concerning Broadband, http://www.fcc.gov/cgb/broadband.html (last visited Mar. 11, 2009).

[17] Broadband versus Narrowband – Access eBroadband Guide, http://www.accessebroadband.info/article.cfm?id=136&xid=UMN (last visited Mar. 11, 2009).

[18] See, e.g., Apple – Quicktime – HD Gallery – Steve Miller Band: Live from Chicago, http://www.apple.com/quicktime/guide/hd/smb.html (last visited Mar. 11, 2009) (listing the lowest available HD file size as ninety-eight megabytes for a video clip lasting just under three minutes, and the highest resolution for the same file being 362 megabytes).  A kilobyte is 1,024 bytes, a megabyte is 1,024 kilobytes, a gigabyte is 1,024 megabytes, and a terabyte is 1,024 gigabytes. Bits, Bytes, Meta, Giga, Tera (explained), http://www.smartftp.com/support/kb/bits-bytes-mega-giga-tera-f53.html (last visited Mar. 11, 2009). 

[19] Yoo, Help or Hurt, supra note 4, at 35.

[20] Yoo, Help or Hurt, supra note 4, at 36.

[21] BitPipe’s Definition of Network Service Providers, http://www.bitpipe.com/tlist/Network-Service-Providers.html (last visted Mar. 11, 2009); see also Yoo, Help or Hurt, supra note 4, at 31 (“Backbones are high-bandwidth, long-haul network providers that carry traffic between a limited number of recognized locations.”).

[22] See, e.g., The Fact Behind Unlimited Space & Unlimited Bandwidth, http://www.cybercoral.net/the-fact-behind-unlimited-space-unlimited-bandwidth/ (last visited Mar. 11, 2009).

[23] Unlimited Bandwidth and Overselling and the Impact on Web Hosting, http://webhostinggeeks.com/articles/broadband-internet/53721.php (2005).

[24] See Yoo, Help or Hurt, supra note 4, at 35 (listing “bandwidth-hungry” applications such as music downloading and streaming video).

[25] See Brett Winterford & Julian Hill, Net Neutrality Is an “American Problem,” ZDNET Australia, Sept. 24, 2008, http://www.zdnet.com.au/insight/communications/soa/Net-neutrality-is-an-American-problem-/0,139023754,339292161,00.htm (referring to American “unlimited access” plans as devaluing what a megabyte is worth). The Australian ISP representatives quoted in the above article say the issue is about how to pay for the excess bandwidth rather than about bandwidth being inherently limited. Id.

[26] Okin, supra note 12, at 69.

[27] Id.

[28] Id. at 142. The File Transfer Protocol (“FTP”) is one type of protocol, and Okin defines FTP as “highly detailed rules that specif[y] how the sending computer would open a connection to the destination computer, listen for an appropriate response, and then begin transmitting the data; and how the receiving computer would answer a request, signal a response, and accept the data.” Id. at 69.

[29] Webopedia: The Seven Layers of the OSI Model, http://www.webopedia.com/quick_ref/OSI_Layers.asp (Mar. 3, 2008). Examples of application layer protocols include FTP and the Simple Mail Transfer Protocol (“SMTP”). Okin, supra note 12, at 173. See also How the Application Layer Works, http://learn-networking.com/tcp-ip/how-the-application-layer-works (Jan. 27, 2008) (comparing the four-layer TCP/IP stack model and seven-layer OSI model). The four-layer TCP/IP stack model essentially categorizes the top three layers of the OSI model into one category and calls it the Application Layer. Id.

[30] Okin, supra note 12, at 92; see also Yoo, Help or Hurt, supra note 4, at 33 (“[T]he most distinctive feature of TCP/IP is that it routes all packets in a nondiscriminatory . . . manner without regard to the packet’s content, point of origin, or associated application.”).

[31] Okin, supra note 12, at 159-60.

[32] Tim Wu, The Broadband Debate, A User’s Guide, 3 J. on Telecomm. & High Tech. L. 69, 73 (2004) [hereinafter Wu, Broadband Debate].

[33] See Free Press, 23 F.C.C.R. 13028, 13092 (2008) (McDowell, dissenting) (arguing for allowing network providers to choose how to manage their networks).

[34] Id. at 13093 (McDowell, dissenting) (arguing that the functioning of the Internet requires that engineers be allowed to manage networks as they see fit).

[35] Wu, Broadband Debate, supra note 32, at 72. Wu uses Vonage to illustrate the openist concept that the Internet is an “innovation commons.” Wu suggests that Vonage was successful largely because they did not wait around for broadband providers to be willing to deploy VoIP technology.

[36] Id. at 76.

[37] See, e.g., Posting of Mike Masnick, AT&T Jumps into the Metered Broadband Game to http://www.techdirt.com/articles/20081104/0118402732.shtml (Nov. 4, 2008, 16:32) (indicating that AT&T is beginning to implement a tiered network management strategy). 

[38] See generally Save the Internet – Frequently Asked Questions, http://www.savetheinternet.com/=faq (last visited Mar. 11, 2009) (referring to the dangers of a non-neutral network on content providers).

[39] E.g., Jordan Wellington, Note, Free the Net, 2 Brook. J. Corp. Fin. & Com. L. 533, 537 (2008).

[40] See Save the Internet – The Threat Is Real, http://www.savetheinternet.com/=threat#abuse (last visited Mar. 11, 2009) (noting the threat that tiered access could pose for the websites of nonprofits).

[41] See id. (suggesting that small business owners and innovators would have difficulty competing for business on the Internet if their ability to have a fast-loading website was based on how much they could pay the network provider).

[42] Stacey Kramer, AT&T Silences Pearl Jam; Gives ‘Net Neutrality’ Proponents Ammunition, paidContent.org, Aug. 9, 2007, http://www.paidcontent.org/entry/419-att-silences-pearl-jam-gives-net-neutrality-proponents-ammunition/; Wellington, supra note 39, at 533. AT&T responded to the allegations apologetically. Censoring of Song Was an Error, AT&T Says, N.Y. Times, Aug. 10, 2007, at C6. Several groups were cynical of the apology, and upon investigation, discovered that AT&T had a history of this sort of behavior. David Prince, The Blue Room: Who Else Did AT&T Censor?, The Daily Swarm, Aug. 12, 2007, http://www.thedailyswarm.com/swarm/blue-room-who-else-did-t-censor/; Eliot Van Buskirk, Crew Member: Previous AT&T Show Had “No Politics” Policy, Wired, Aug. 13, 2007, http://blog.wired.com/music/2007/08/crew-member-pre.html.

[43] Adam Liptak, Verizon Blocks Messages of Abortion Rights Group, N.Y. Times, Sep. 27, 2007, at A1.The day after the story broke amid heavy criticism of Verizon, the provider reversed course. Jessica E. Vascellaro & Dionne Searcey, Verizon Reversal Highlights Challenges; Criticism Prompts End of Ban on Texting from Abortion Group, Wall. St. J., Sep. 28, 2007, at B4.

[44] See, e.g., Yoo, Help or Hurt, supra note 4, at 57 (suggesting that giving network owners more leeway could encourage innovation).

[45] See, e.g., Wu, Anti-Discrimination, supra note 4, at 28 (suggesting that anti-discrimination regulation would serve to protect the market).

[46] Wellington, supra note 39, at 537.

[47] Id. at 544.

[48] See, e.g., id. (noting that it would likely be harder for startups with few resources to succeed under a prioritized system).

[49] The Agenda – Technology, http://www.whitehouse.gov/agenda/technology/ (last visited Mar. 11, 2009).

[50] Id.

[51] Internet Freedom Preservation Act, S.215, 110th Cong. (2007).

[52] Internet Freedom Preservation Act of 2008, H.R. 5353, 110th Cong. (2008). The House version of the bill was perhaps prompted in part by the Comcast-BitTorrent dispute addressed below. The version of the bill as introduced would call on the FCC to hold hearings about the throttling of Internet traffic by service providers. Scott M. Fulton, III, New Legislation Could Lead to ISP Throttling Ban, BetaNews, Feb. 13, 2008, http://www.betanews.com/article/New_legislation_could_lead_to_ISP_throttling_ban/1202944440. 

[53] The Future of the Internet: Hearing Before the Committee on Commerce, Science & Transportation, 110th Cong. (2008), available at http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=4c66f979-3001-490a-a985-5be63951adb7.

[54] Kim Dixon, Law Maker Plans Bill on Net Neutrality, Reuters, Nov. 14, 2008, http://www.reuters.com/article/technologyNews/idUSTRE4AC7SU20081114.

[55] American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, § 6001(j), 123 Stat. 115 (2009).

[56] In re A National Broadband Plan for Our Future, 2009 FCC LEXIS 1684, 5 n.6 (2009), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-31A1.pdf.

[57] Posting of Alex Curtis, ACTION ALERT: Say No to Copyright Filtering in Broadband Stimulus, http://www.publicknowledge.org/node/1984 (Feb. 10, 2009, 12:10 PM EST); Proposed Feinstein Amendment to H.R. 1, 111st Cong., available at http://www.publicknowledge.org/pdf/GRA09175_xml.pdf (last visited Feb. 13, 2009).

[58] E.g., Dixon, supra note 54. Dixon’s article also quotes an AT&T executive who referred to the recent Comcast decision by the FCC as evidence that the current FCC principles already deal with unreasonable discrimination by broadband providers. The Comcast decision in issue is the very FCC decision that this note examines. For reasons that will be addressed later in this note, it is misleading to dismiss net neutrality as an issue by saying that the FCC is already handling it since, for example, the FCC made abundantly clear in the Comcast decision that the FCC was not going to set firm rules but were instead going to examine such disputes on a case-by-case basis. Infra, note 153 and accompanying text. Additionally, the “current principles” referred to by the AT&T executive are just that: principles, not rules. See Internet Policy Statement, supra note 8, at 16988 n.15 (stating that the FCC was “not adopting rules in this policy statement,” and that the principles set forth would be “subject to reasonable network management.”). 

[59] Supra note 6.

[60] See FTC Jurisdiction Statement, supra note 6, at 2 (arguing that the FTC offers a substantial contribution to the policing of unfair competition concerns involving the Internet).

[61] 15 U.S.C. § 45(a)(2) (2008).

[62] Appropriate Framework for Broadband Access to the Internet over Wireline

Facilities, Report and Order and Notice of Proposed Rulemaking, 20 F.C.C.R. 14853, 14855 (2005); see also Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Serv., 545 U.S. 967, 1000 (2005) (upholding the FCC’s 2002 designation of cable providers as “information services” rather than “telecommunications services,” which would have made cable providers “common carriers”).

[63] FTC Jurisdiction Statement, supra note 6, at 3-4.

[64] See supra notes 7-8.

[65] See Raymond Gifford, “Let the FTC Do It!” Maybe It Already Can, http://www.pff.org/issues-pubs/ps/2006/ps2.12ftc.pdf (last visited Mar. 11, 2009) (referring to the FTC’s focus on consumer protection as a factor that makes the FTC a more appropriate agency to address net neutrality concerns than the FCC).

[66] FTC, Broadband Connectivity Competition Policy 160, available at http://www.ftc.gov/reports/broadband/v070000report.pdf (June 2007) [hereinafter FTC Broadband Policy].

[67] FTC Urges Caution on Net Neutrality, N.Y. Times, June 28, 2007, at C2  [hereinafter FTC Urges Caution]. The FTC’s report stated that it would be unwise to create a statutory mandate for net neutrality, in part because it was uncertain whether data prioritization would deter innovation, as net neutrality proponents suggest, or whether data prioritization would in fact promote innovation. FTC Broadband Policy, supra note 66, at 157. The DOJ, which has concurrent jurisdiction with the FTC on antitrust matters, also claims that net neutrality concerns should be addressed by through antitrust means rather than seeking regulation by Congress or the FCC. Department of Justice Comments on “Network Neutrality” in FCC Proceeding (Sep. 6, 2007), http://www.usdoj.gov/atr/public/press_releases/2007/225782.pdf. 

[68] FTC Broadband Policy, supra note 66.

[69] Id. at 161.

[70] Id. at 122. Significantly, this statement was made before AT&T censored a live web cast, before Verizon refused to carry pro-choice text messages, and before Comcast was found to be discriminating against the BitTorrent protocol.

[71] Id. at 75

[72] FTC, Protecting Consumers in the Next Tech-ade, http://www.ftc.gov/bcp/workshops/techade/index.html (last visited Mar. 11, 2009).

[73] See generally FTC Jurisdiction Statement, supra note 6 (suggesting that the FTC should use its power to protect consumers and competition in the broadband area).   

[74] 47 U.S.C. § 151 (2008).

[75] 47 U.S.C. § 153 (2008). The term “information service” includes “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications.” Id.; see generally Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Serv., 545 U.S. 967 (2005) (holding that cable broadband service providers are providers of information services, and are not common carriers).

[76] Supra note 7.

[77] Madison River Communications, LLC, 20 F.C.C.R. 4295, 4295 (2005).

[78] FTC Broadband Policy, supra note 66, at 48 n.217.

[79] Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Report and Order and Notice of Proposed Rulemaking, 20 F.C.C.R. 14853, 14864 para. 15 (Aug. 2005). 

[80] Adelphia Communications Corp., 21 F.C.C.R. 8203 (2006).

[81] Id. at 8295 para. 213.

[82] Id. at 8298 para. 220.

[83] AT&T Inc., 22 F.C.C.R. 5662 (2007).

[84] Id. at 5727-40.

[85] Id. at app. F.

[86] Internet Policy Statement, supra note 8.

[87] Id. at 14987-88 para. 4.

[88] Id. All of the principles set forth are qualified accordingly, using phrases like “lawful” and “legal” and “subject to the needs of law enforcement.”

[89] Id. at 14988 n.15 (stating that the principles being adopted “are subject to reasonable network management.”). Policy statements by an administrative agency differ from substantive rules in that they do not set precedent but instead are essentially like press releases communicating how an agency will approach future rulemakings or adjudications on a particular issue. Panhandle E. Pipe Line Co. v. Fed. Energy Regulatory Comm’n, 198 F.3d 266, 269 (D.C. Cir. 1999).

[90] Michael K. Powell, Preserving Internet Freedom: Guiding Principles for the Industry, 3 J. on Telecomm. & High Tech. L. 5, 11-12 (2004).

[91] Id. at 12. Powell’s essay states that the freedom to obtain clear and meaningful service plan information is the most important freedom of the four. It is unclear why the FCC’s Internet Policy Statement included a principle about encouraging competition but did not include a principle requiring disclosure to consumers about their service plans.

[92] See SEC v. Chenery Corp., 332 U.S. 194, 202 (1947) (discussing an agency’s power to engage in rulemaking or adjudication to resolve a conflict).

[93] Id. (“The function of filling in the interstices of the Act should be performed, as much as possible, through this quasi-legislative promulgation of rules to be applied in the future.”).

[94] Id.

[95] Id.

[96] Id. at 202-03.

[97] Free Press, 23 F.C.C.R. 13028, 13045-46 para. 29-32 (2008).

[98] See Posting by The Famous Brett Watson, Comcast’s Network Management Practices: A Brief Analysis to http://www.circleid.com/posts/89238_comcast_network_management_practices_analysis/ (Sept. 23, 2008, 07:45 PDT) (analyzing Comcast’s September 19, 2008 submission to the FCC pursuant to the FCC’s August 20, 2008 order).

[99] See Paul Gil, BitTorrent 101: Understanding P2P with Torrents, http://netforbeginners.about.com/od/peersharing/a/torrenthandbook_2.htm (last visited Mar. 11, 2009).

[100] Carmen Carmack, How Stuff Works – What BitTorrent Does, http://computer.howstuffworks.com/bittorrent2.htm (last visited Mar. 11. 2009). Downloading using BitTorrent requires there to be other users who make the entire file available by leaving the torrent file running, called “seeding.”

[101] See Bram Cohen, The Bittorrent Protocol Specification (Jan. 10, 2008), http://www.bittorrent.org/beps/bep_0003.html.

[102] Okin, supra note 12, at 173.

[103] See Paul Gil, How to Set up Your Computer for BitTorrents, http://netforbeginners.about.com/od/peersharing/a/torrenthandbook_3.htm (last visited Mar. 11, 2009) (listing the “six major ingredients” for sharing using the BitTorrent protocol).

[104] See Carmack, supra note 100 (providing a diagram illustrating the process of P2P file sharing using BitTorrent). For a concrete example, consider the following: Max is a programmer who designs open source software. His newest creation is a word processing program called Max 2.0, which he distributes using BitTorrent because it has a large installation file and he doesn’t have much bandwidth available on his website. Max is supplying the main file and is running the tracker, and Max is acting as the “seeder” – that is, he is sharing a full copy of the file. Jill hears about this great new open source word processing program, and starts downloading Max 2.0 using the .torrent file that Max posted on his website. While Jill is downloading the file using BitTorrent, Ryan also decides he wants to download this great new program. When Ryan starts running the .torrent file, his download will probably be going faster than Jill’s, because not only is he downloading pieces of the whole from Max, he is also now downloading from Jill from the pieces that she has downloaded so far. This is essentially what is happening in the diagram provided by Carmack.

[105] William G. Childs, When the Bell Can’t Be Unrung: Document Leaks and Protective Orders in Mass Tort Litigation, 27 Rev. Litig. 565, 591 (2008) (describing the difficulty of handling document leaks when the leaked documents were distributed using BitTorrent clients).

[106] Seth Schiesel, File Sharing’s New Face, N.Y. Times at G1 (Feb. 12, 2004).

[107] See Posting of Mark Schultz, Technology & Marketing Law Blog: What Happens to BitTorrent After Grokster? to http://blog.ericgoldman.org/archives/2005/06/what_happens_to.htm (June 28, 2005) (noting that BitTorrent was developed to aid in distribution of authorized recordings of jam band concerts).

[108] Id.

[109] Id.

[110] Schiesel, supra note 106.

[111] The Pirate Bay – The World’s Largest Bittorrent Tracker, https://thepiratebay.org/about (last visited Nov. 14, 2008); see also Majsan Boström, “Are They Baby-Eating Monsters or What?”, Thelocal.se, Oct. 1, 2008, http://www.thelocal.se/14688/20081001/ (interviewing two of the Swedish founders of The Pirate Bay).

[112] Kim Peterson, BitTorrent File-Sharing Program Floods the Web, Seattle Times (Jan. 10, 2005), available at http://seattletimes.nwsource.com/html/businesstechnology/2002146729_bittorrent10.html.

[113] Schiesel, supra note 106.

[114] Sony Corp. of Am. v. Universal City Studios, Inc., 46 U.S. 417, 456 (1984).

[115] See, e.g., Legal Torrents – FAQ, http://beta.legaltorrents.com/about/faq (last visited Mar. 11, 2009) (“All of the content we offer is licensed so it is legal to share online, with Creative Commons or other share-friendly licenses.”).

[116] See Public Domain Movie Torrents, http://www.publicdomaintorrents.com/ (last visited Mar. 11, 2009) (providing links to .torrent files for films that are in the public domain).

[117] “Open source” means that the source code is available to everyone, which allows independent software developers to contribute to the software’s further development. See The Linux Homepage at Linux On-Line, http://www.linux.org/ (last visited Mar. 11, 2009) (“Developed under the GNU General Public License, the source code for Linux is freely available to everyone.”).

[118] Linux.com : Download Linux, http://www.linux.com/download_linux/ (last visited Mar. 11, 2009) (providing links to download .torrent files for Linux-based operating systems like Fedora and Knoppix).

[119] WoW à Info à FAQ à Blizzard Downloader, http://www.worldofwarcraft.com/info/faq/blizzarddownloader.html. While not explicitly referring to its use of the BitTorrent protocol, the Blizzard Downloader information makes reference to “trackers” and “peers,” which is terminology that is associated with the BitTorrent protocol.

[120] MGM v. Grokster, 545 U.S. 913, 941 (2005) (“[E]vidence of the distributors' words and deeds going beyond distribution as such shows a purpose to cause and profit from third-party acts of copyright infringement.”).

[121] See Schultz, supra note 107; see also Grokster, 545 U.S. at 937 (“The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.”).

[122] See Napster, Company Information, http://www.napster.com/about_napster.html (last visited Mar. 11, 2009) (listing Napster’s current offerings).

[123] See Burt Helm, BitTorrent Goes Hollywood, Business Week Online, May 9, 2006, available at http://www.businessweek.com/technology/content/may2006/tc20060508_693082.htm (reporting that BitTorrent had entered into a deal with Warner Bros. to assist in distribution of digital content).

[124] Website of BitTorrent Entertainment, http://www.bittorrent.com (last visited Mar. 11, 2009) (listing affiliated studios including Fox, Warner Bros., Sega, Netgear, and Paramount). Bram Cohen also briefly worked with video game publisher Valve in developing Steam, a new on-line video game store that distributes all of its products in digital form. Schiesel, supra note 106; see generally What Is Steam, http://store.steampowered.com/about/ (last visited Mar. 11, 2009) (providing information on the Steam system).

[125] See, e.g., John Borland, Feds Shut Down BitTorrent Hub, CNet, May 25, 2005, http://news.cnet.com/Feds-shut-down-BitTorrent-hub/2100-1028_3-5720541.html (reporting the takedown of BitTorrent hub site Elite Torrents).

[126] Wu & Yoo, supra note 3, at 575-76, 578. Yoo suggests that competition between providers would be better served using a “network diversity” approach instead of a net neutrality approach, and Wu suggests that allowing networks to block or prioritize content is what would hurt competition.

[127] Id. at 578.

[128] Wu cites Vonage to illustrate how important it is that outsiders be allowed to participate in the market. Wu, Broadband Debate, supra note 32, at 72.

[129] Wu & Yoo, supra note 3, at 582. Wu offers a hypothetical example where AT&T might enter into an exclusive deal with Yahoo! to make Yahoo!’s web searches load faster than Yahoo!’s competitors.

[130] Yoo, Help or Hurt, supra note 4, at 59-60.

[131] Wu & Yoo, supra note 3, at 575-76; see also Yoo, Help or Hurt, supra note 4, at 61 (“[A]llowing last-mile broadband providers to differentiate their product offerings can help prevent declining-cost industries from devolving into natural monopolies.”).

[132] Yoo, Help or Hurt, supra note 4, at 67. As established in the next section, however, the FCC clearly did not find Comcast’s network management practices to be such an “understandable attempt.”

[133] Randolph May, Commentary: Net Neutrality Mandates: Neutering the First Amendment in the Digital Age, 3 I/S: J. L. & Pol'y for Info. Soc'y 197, 203-04 (2007). May also focuses on the idea that net neutrality regulation would effectively treat broadband service providers as common carriers again, in contradiction of the Supreme Court’s Brand X decision. May at 209-10. But see Amit M. Schejter & Moran Yemini, “Justice and Only Justice, You Shall Pursue”: Network Neutrality, the First Amendment, and John Rawls’s Theory of Justice, 14 Mich. Telecomm. Tech. L. Rev. 137, 172 (2007) (applying Rawlsian notions of distributive justice to conclude that regulation of content diversity in light of the scarcity of broadband provider options would not violate the First Amendment rights of broadband service providers). 

[134] Yoo, Help or Hurt, supra note 4, at 27.

[135] Douglas A. Hass, Note, The Never-Was-Neutral Net and Why Informed End Users Can End the Net Neutrality Debates, 22 Berkeley Tech. L.J. 1565, 1576, 1628 (2007); Kai Zhu, Note, Bringing Neutrality to Network Neutrality, 22 Berkeley Tech. L.J. 615, 634 (2007). Zhu proposes that the middle ground would be to allow ISPs to allocate a fixed percentage of their bandwidth to prioritized traffic. Zhu at 642. Zhu further suggests that the arguments set forth by commentators like Wu and Yoo set forth a chicken-and-egg problem, since the issue is whether the Internet will best be advanced by promoting “garage innovation” or by promoting institutional innovation. Zhu at 637. Zhu concludes that both types of innovation rely on each other in a positive feedback loop. Id. at 637. On the other hand, Hass proposes that the middle ground would be to remove the informational asymmetry and require ISPs to disclose non-neutral practices to consumers and thus empower consumers to use this information in making their decisions about what service provider to use. Hass at 1628.

[136] See, e.g., Wu, Anti-Discrimination, supra note 4, at 37 (“[T]he prevention of the distortion of the applications market [through anti-discrimination rules] is central to making communications networks useful public infrastructures and platforms for innovation.”).

[137] Brett M. Frischmann & Mark A. Lemley, Spillovers, 107 Colum. L. Rev. 257, 298 (2007).

[138] Supra note 62.

[139] See, e.g., American Civil Liberties Union : Internet Freedom and Innovation at Risk: Why Congress Must Restore Strong Net Neutrality Protection, Apr. 5, 2007, http://www.aclu.org/freespeech/internet/26829res20070405.html.

[140] 47 U.S.C. § 202 (2008).

[141] FTC Jurisdiction Statement supra note 6.

[142] About Comcast Corporation, http://www.comcast.com/Corporate/About/Corporateinfo/Corporateinfo.html (last visited Mar. 11, 2009).

[143] Internet Policy Statement, supra note 8, at 14988 n.15.

[144] Free Press, 23 F.C.C.R. 13028, 13030-31 para. 6-8 (2008); see also Posting by Declan McCullagh, Comcast Really Does Block BitTorrent Traffic After All to http://news.cnet.com/8301-13578_3-9800629-38.html (Oct. 19, 2007 11:06 PDT).

[145] Free Press, 23 F.C.C.R. at 13030-32 paras. 6, 9.

[146] Id.  at 13031 para. 8.

[147] Id.; see also Packet Forgery by ISPs: A Report on the Comcast Affair, http://www.eff.org/files/eff_comcast_report2.pdf (Nov. 2007) (providing details of tests the EFF conducted in investigating whether Comcast was interfering with user traffic).

[148] Free Press, 23 F.C.C.R. at 13031 para. 8. One commentator compared Comcast’s behavior in this context to a telephone operator who interrupts a phone conversation and tells each party in the other’s voice “I’m hanging up now. Goodbye.” Peter Svensson, Comcast Blocks Some Internet Traffic, Oct. 19, 2007, available at http://www.msnbc.msn.com/id/21376597/.

[149] Free Press, 23 F.C.C.R. at 13030-32 paras. 6, 9.

[150] Id. at 13030-31 para. 6; Marguerite Reardon, Comcast Denies Monkeying with BitTorrent Traffic, CNet, Aug. 21, 2007, http://news.cnet.com/8301-10784_3-9763901-7.html.

[151] Free Press, 23 F.C.C.R. at 13031-32 para. 9.

[152] Id.

[153] Kelly O’Connell, FCC Rules Comcast Cannot Limit Data Downloads, IBLS, Sept. 10, 2008, http://www.ibls.com/internet_law_news_portal_view.aspx?id=2134&s=latestnews.

[154] Adelphia Communications Corp., 21 F.C.C.R. 8203 (2006); AT&T Inc., 22 F.C.C.R. 5662 (2007); see also Internet Policy Statement, supra note 8 (setting forth policy guidelines that the FCC would use in examining similar matters in the future).

[155] Free Press, 23 F.C.C.R. at 13033-44 paras. 12-27.

[156] Id. at 13034-35 para. 14.

[157] Id. at 13041-42 para. 23.

[158] Adelphia Communications Corp., 21 F.C.C.R. at 8299 para. 223.

[159] Free Press, 23 F.C.C.R. at 13043-44 para. 27.

[160] Id. at 13045-46 paras. 29-32.

[161] SEC v. Chenery Corp., 332 U.S. 194, 202 (1947).

[162] Free Press, 23 F.C.C.R. at 13045 paras. 29-30.

[163] See Okin, supra note 12, at 106 (describing the emergence of the ISPs to connect commercial users to the Internet around 1990).

[164] See id. at 81 (describing DARPA’s 1977 Internet experiment).

[165] Service Electric Company History, http://www.secv.com/HTML/history.html (last visited Mar. 11, 2009) (describing John Walson, who owned Service Electric and in 1948 invented a technique for transmitting broadcast television to communities that could not receive broadcasts using traditional antennae at residents’ homes).

[166] Amendment of Part 74, Subpart K, of the Commission’s Rules and Regulations Relative to Community Antenna Television Systems, 36 F.C.C.2d 143 (1972).

[167] Free Press, 23 F.C.C.R. at 13046 para. 31.

[168] Id.

[169] See supra Part III.A.

[170] See Yoo, Help or Hurt, supra note 4, at 27 (emphasizing the importance of focusing on competition among last-mile technologies – that is, among broadband providers).

[171] See Wu, Anti-Discrimination, supra note 4, at 38 (focusing on the importance of anti-discrimination rules to protect “easy-entry service markets from infrastructure economics”).

[172] Internet Policy Statement, supra note 8, at 14988, para. 4.

[173] Free Press, 23 F.C.C.R. at 13045-46 paras. 30-32. See Section IV.A, infra, for analysis of the reasons Comcast gave for addressing Internet policy issues using case-by-case adjudication instead of a rulemaking.

[174] Free Press, 23 F.C.C.R. at 13058 para. 51.

[175] Id. at 13030 para. 5.

[176] Id. at 13051-52 para. 42.

[177] Id. at 13055-56 para. 47.

[178] Id. at 13056 para. 48.

[179] Id. at 13058-59 para. 52.

[180] Id. at 13059-60 para. 54.

[181] Id.

[182] Id. at 13059-60 paras. 54-55.

[183] See Vishesh Kumar, Comcast Submits Plans to Manage Broadband, Wall St. J. at B7 (Sept. 20, 2008); Peter Eckersly, Comcast Unveils Its New Traffic Management Architecture (Sept. 22, 2008), http://www.eff.org/deeplinks/2008/09/comcast-unveils-its-new-traffic-management-archite (providing some technical analysis of the response, as well as a link to Comcast’s full response). Eckersly works with the Electronic Frontier Foundation, a non-profit organization which was not a party to the Comcast adjudication before the FCC, but which assisted in uncovering Comcast’s questionable network management practices. See Packet Forgery by ISPs, supra note 147 (examining the results of tests conducted on Comcast connections in a November 2007 white paper).

[184] Packet Forgery by ISPs, supra note 147, 1 n.1

[185] Comcast’s Response to the FCC, Attachment A 3, http://www.eff.org/files/Complete%20Comcast%20NM%20Filing%20--%20Date-Stamped%209%2019%202008.pdf (Sept. 19, 2008) [hereinafter “Comcast’s Report on Prior Practices”].

[186] Comcast’s Report on Prior Practices at 3-4.

[187] Id. at 5.

[188] Id. at 7.

[189] Id. at 11.

[190] Id.

[191] Comcast’s Response to the FCC, Attachment B 2, http://www.eff.org/files/Complete%20Comcast%20NM%20Filing%20--%20Date-Stamped%209%2019%202008.pdf (Sept. 19, 2008) [hereinafter “Comcast’s Plan for Future Practices”].

[192] Comcast’s Plan for Future Practices at 15.

[193] Roy Mark, FCC Questions Comcast’s VOIP Policy, eWeek, Jan. 20, 2009, http://www.eweek.com/c/a/VOIP-and-Telephony/FCC-Questions-Comcasts-VOIP-Policy/.

[194] Letter from the FCC to Comcast 1, Jan. 18, 2009, http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-288047A1.pdf.

[195] Letter from the FCC to Comcast 1-2; Comcast.net Security – Network Management Questions, http://security.comcast.net/get-help/faq-full.aspx?guid=55e2e5ee-abd5-40df-b718-a488eca2d077#voip (last visited Mar. 11, 2009).

[196] Matthew Lasar, Comcast Defends Itself Against FCC’s VoIP Probe, ArsTechnica, Feb. 3, 2009, http://arstechnica.com/telecom/news/2009/02/comcast-strikes-back-on-fcc-voip-probe.ars

[197] Adelphia Communications Corp., 21 F.C.C.R. 8203, 8299 para. 223 (2006).

[198] Cecilia Kang, Comcast Illegally Interfered with Web File-Sharing Traffic, FCC Says, Washington Post at D01 (July 30, 2008).

[199] The primary occasion referred to is the Adelphia Order. Adelphia Communications Corp., 21 F.C.C.R. 8203 (2006).

[200] See Posting of Karl Bode, Comcast Eager to See Kevin Martin Take a Hike, to http://www.dslreports.com/shownews/Comcast-Eager-To-See-Kevin-Martin-Take-A-Hike-98986 (Nov. 10, 2008, 10:20 AM).

[201] David Kirkpatrick, Comcast-BitTorrent: The Net’s Finally Growing Up, CNN.com, Mar. 28, 2008, http://money.cnn.com/2008/03/27/technology/comcast.fortune/index.htm.

[202] See Lasar, supra note 196 (describing the FCC’s recent inquiry concerning Comcast’s management of VoIP traffic).

[203] Internet Policy Statement, supra note 8, at 14988 n.15.

[204] Free Press, 23 F.C.C.R. 13028, 13045-46 paras. 30-32 (2008).

[205] FTC Urges Caution, supra note 67.

[206] Free Press, 23 F.C.C.R. at 13045-46 paras. 30-32.

[207] See supra note 42.

[208] See Wellington, supra note 39, at 549 (“[W]aiting for a network neutrality violation to surface is ineffective because typical consumers may not realize their ISP is degrading a particular website.”).

[209] Internet Policy Statement, supra note 8.