The Internet is vital to life in 2014, just as dial-up phone service or electricity were in generations past.
That makes last weeks decision by the U.S. Court of Appeals for the District of Columbia Circuit to strike down Federal Communications Commission regulations that sought to guarantee Internet neutrality troubling. The FCC needs to revise its regulations to ensure that Comcast, AT&T, Verizon and other major Internet providers cannot play favorites among content providers and consumers.
The issue is basic: Do legitimate sources of information Wikipedia, YouTube, CNN, Fox, Facebook, your local college have equal access to your homes over Internet lines, or can the telecommunication and cable giants who provide the service impede certain sources in favor of others? Say, the ones willing to pay for greater access to your computer?
In 2010, the FCC, controlled by Democrats, issued a split decision barring cable and telecommunication companies from favoring some content providers over others, and from charging different rates to different providers.
This month, also in a split decision, the appellate court, led by two appointees of President Bill Clinton, held that the FCC overstepped its authority by imposing rules that had barred Internet service providers from giving preferential treatment to some content over others.
An appeal is almost a certainty.
Major economic forces are at work. Cable and telecom giants are pitted against major information providers, many of them based in California, such as Google, Apple and Netflix.
Netflix was founded when many of todays high school seniors were not yet born. It is now the worlds leading Internet TV network with more than 33 million customers watching more than a billion hours of programming each month.
Netflixs business model is based on ready access to consumers homes. As Netflix said in its 2013 annual report to the Securities and Exchange Commission: We rely upon the ability of consumers to access our service through the Internet.
To the extent that network operators implement usage-based pricing, including meaningful bandwidth caps, or otherwise try to monetize access to their networks by data providers, we could incur greater operating expenses and our subscriber acquisition and retention could be negatively impacted.
Verizon, the lead plaintiff in the suit over the FCC regulations, has a financial stake in Redbox, a Netflix competitor. Verizon has little incentive to allow Netflix to continue to stream video into homes at the expense of Redbox.
In its annual statement last year, Verizon said: The regulation of broadband activities and any related court decisions could restrict our ability to compete in the marketplace and limit the return we can expect to achieve on past and future investments in our broadband networks.
Netflix might have sufficient capital to battle cable giants to maintain access, and, undoubtedly, pass the costs onto customers. But if cable providers can play favorites, the next version of Netflix could be frozen out.
As attorney and former Obama administration official Susan Crawford wrote in an op-ed published in The Bee last week, the problem dates to 2002 when the FCC, then controlled by Republicans, exempted high-speed Internet access from the same common carrier regulations that apply to phone service.
If that decision made sense in 2002, it doesnt in 2014. Twelve years is an eternity in the Internet age. The appellate court invited the FCC to revisit the 2002 decision. That must happen.