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Back in court, FCC defends net neutrality from internet providers

The ability of the U.S. government to regulate broadband internet service is back in court, as the Washington D.C. federal appeals court on Friday heard arguments by the cable and telecom industry challenging rules the FCC established earlier this year regarding net neutrality. Re/code Senior Editor Arik Hesseldahl joins Hari Sreenivasan to discuss.

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  • HARI SREENIVASAN:

    The ability of the U.S. government to regulate broadband Internet service is back in court.

    The Washington, D.C., Federal Appeals Court heard arguments on Friday by the cable and telecom industry challenging rules the Federal Communications Commission established earlier this year regarding net neutrality.

    For some insight into this debate, I am joined by Arik Hesseldahl, a senior editor of the technology news Web site Re/code.

    So, why is it back in court? And for a bit of background, I guess, what's the original intent that's being challenged?

  • ARIK HESSELDAHL, Senior Editor, Re/code:

    The original intent is whether or not the FCC has the authority to regulate the Internet as a utility.

    Basically, what they did was, after a series of other challenges in court and legislative wrangling and policy-making, they decided to use their ability, the same legal authority they have to regulate the dial tone, the old telephone system, to regulate the Internet.

    So, essentially, the Internet is now considered a telecommunications service, rather than the service providers, whether they're Verizon, AT&T, or whoever, as an information service provider. And that's just a — it's a little bit of legal jujitsu, but what it really comes down to is that the service providers want the ability to regulate what kind of data flows on their network.

    And they want the ability to, in theory, give some preferential treatment to packets that they favor and packets that they don't. The classic example is, say, Netflix. In an age when people are buying fewer or paying less — less likely to be paying for cable or satellite TV services than watching over the Internet, if you're Hulu or Netflix or someone like that, you don't want those — you don't want a cable company that may also have a video-on-demand service to control whether or not your customers can watch your content, if you're Hulu or Netflix.

  • HARI SREENIVASAN:

    And so if I'm watching cable TV at home, say, for example, from Time Warner, and they have their movies on demand, vs. Netflix, my Netflix movies might get here either slower, or I might have to pay more money to get them here at the same speed?

  • ARIK HESSELDAHL:

    Exactly.

    I think what the carriers want to do is, in theory, they want to create a fast lane. So, if you're Netflix, you might have to pay more. That cost, of course, would be passed on to the customers.

    It is a long and difficult policy to debate. And so what happened was, the FCC decided to turn on this regulatory authority under the old (INAUDIBLE) rules.

  • HARI SREENIVASAN:

    So, has there been any change since the kind of rule in summer until now? Is there a reaction that the industry is fighting, or are they trying to prevent something?

  • ARIK HESSELDAHL:

    I think they're essentially arguing that the service providers don't really provide a lot of intelligence into the network itself. They're literally being asked to pass on packets and data essentially on a best-effort basis and to treat every packet essentially the same.

    And so the case I have always — the example I have always used is, you know, if you are setting up a toll road, you know, you can charge more for trucks vs. regular cars. Well, in this case, they're being asked to essentially charge the same rate for every vehicle that passes through the toll booth, essentially, whether or not it is a truck or a car.

    It's — that's the basic argument — the basis of the argument that they're running up against here. And the industry is basically arguing that it's interfering with their intent to invest in their infrastructure, which is kind of silly when you think about it, because they have spent tens of billions, if not hundreds of billions of dollars, to build all these networks.

  • HARI SREENIVASAN:

    Yes.

  • ARIK HESSELDAHL:

    And the demand for the networks are not going to go away.

    And so I fail to see a case where consumer demand for Internet services is going to decline, and they're not going to — and they're going to stop investing in their networks. That is just silly.

  • HARI SREENIVASAN:

    All right, Arik Hesseldahl of Re/code, thanks so much.

  • ARIK HESSELDAHL:

    You bet.

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