Verizon Sues the FCC for "Capricious" Net Neutrality Rules
October 3, 2011 8:57 AM
comment(s) - last by
(Source: NJ Journal)
Wireless carrier claims it still cares about net neutrality
Verizon Communications, Inc. (
) has sued the
U.S. Federal Communications Commission
for a second time looking to block its proposed net neutrality rules. But the puzzling thing is that it's not clear what the pair is fighting for.
Last August Google Inc. (
) maker of the world's most used smart phone operating system and most used search engine, teamed up with Verizon Communications, Inc. (
), America's largest wireless network, to
unveil a net neutrality proposal
. While the proposal aimed to block landline companies like Comcast Corp. (
) from discriminating against data, it contained exceptions for illegal data (e.g. P2P traffic) and wireless traffic (which the proposal argued was too bandwidth restricted to allow customers to freely access the internet).
The FCC, who Verizon and Google hoped would embrace those rules, was
dismissive of the proposal
. FCC Commissioner Michael Copps
[PDF], "Some will claim this announcement moves the discussion forward. That's one of its many problems. It is time to move a decision forward—a decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever, and to put the interests of consumers in front of the interests of giant corporations."
Still when the proposal was
, it seemed to take into consideration a lot of what Google and Verizon said, largely exempting wireless traffic from the prohibition on throttling.
Despite that, Verizon made the curious decision to sue the FCC about the proposal, claiming it has no authority to make the rules regulating the internet. Verizon, who throttles its most active data users, was supported by the U.S. House of Representatives who
claim that net neutrality is an afront to capitalism
. The House argued that net neutrality regulation would prevent telecoms from monetization schemes, such as a
charging users per website visit
The FCC proposal is unpopular among house Republicans and telecoms, who complain it would prevent a "free market" in which carriers could charge users per-website usage fees. [Source: Fierce Wireless Semina via Wired]
Ironically, Verizon is also supported by some of its enemies. Activist group Free Press has
also filed suit against the FCC
[PDF] because it complains the proposed rules too closely
Verizon's suggestion, which they argue illegally exempts wireless traffic from net neutrality provisions. The Free Press argue that all internet connections should be mandated to be neutral, and that rules with exemptions are illegal.
The FCC has also been sued by net neutrality advocates, the Free Press (pictured here protesting at Google's headquarters), who argues that its rules don't go far enough and illegally exempt wireless carriers like Verizon from some provisions. [Source: CBS Interactive]
For Verizon this is the company's second suit. The last suit was dismissed as the FCC hadn't officially unveiled the net neutrality rules.
Recall that Comcast
already won its suit
to prevent the FCC from restricting its throttling.
While Comcast's attorney acknowledged that Title I, Section 230(b) of the Communications Act, which defines that it is the policy of the United States "to preserve the vibrant and competitive free market that presently exists for the Internet" and "to promote the continued development of the Internet," she disputed that the provision gave the FCC authority to regulate the internet. She said that only Congress can deliver that kind of authority via legislation. The court bought that argument, ruling that the FCC did not have sufficient regulatory authority.
Now that attorney for Comcast -- Helgi G. Walker -- has been hired by Verizon to try to win another round against the FCC.
Verizon has retained Helgi Walker (pictured; center), a top lawyer who already won a similar case against the FCC for Comcast. [Source: Washington Life]
Verizon senior vice president Michael Glover claims his company is actually a supporter of net neutrality, "Verizon is fully committed to an open Internet. We are deeply concerned by the FCC’s assertion of broad authority to impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers."
However, he calls the new rules "arbitrary" and "capricious".
If the rules are overturned it would likely have little bearing on the overall right to throttle by wireless carriers, which would be allowed under the pending rules. It would, however open the door to Verizon and others charging users per-page-visit (regardless of data use), something that is prohibited under the pending rules.
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10/3/2011 11:48:13 AM
No cost of production + profit sets prices.. Smartphones are not cheap to produce. Most people want a free or $100 phone. Not a $400-500 phone. So as a result you sign up for a contract. You know what you're getting into. If you don't like it, you're free to buy a phone without a contract at full price. Which is usually between $300-800. These things are basically mobile computers now. The smaller things are, the more expensive they are.
10/3/2011 12:28:16 PM
We do not live in ideal world. Humans exploit every possibility and so the profit margin is not as logical and reasonable as you want it to be.
Just look at the Apple. It doesn't win by volume, but profit margins are quite high. And it's not exactly a bad thing... No, in case of Apple it is.
$300-800 is the price of tablets. Not smartphones.
And subsidising does not reduce the price. It actually increases it. Like a credit.
10/3/2011 3:06:53 PM
No, the cost of the parts in these smartphones is indeed high. the iphone is an exception and used outdated hardware at launch.
the reason they appear to be cheap is because companies subsidize the phone costs in order to attach you to a contract. the price of the phone is technically reduced (sometimes substantially) compared to purchasing the phone and contract individually.
As you said, the world isn't ideal, and it's not a right to own a subsidized computer in your pocket.
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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