It doesn't matter which way the court swings on the cable industry's legal challenge to the Federal Communications Commission's open Internet rules. Everyone has already lost.
That's the cheery take from Michael Powell, head of the cable industry's biggest lobbying group and a former FCC chairman.
"I have been in regulation too long to not know, win or lose, we are all going to kind of lose, because we are going to have a prolonged, protracted, complex, messy fight with uncertainty and confusion around products and services," he said in an interview last week with CNET.
We're potentially days away from a federal appeals court issuing a decision on a lawsuit challenging the so-called Net neutrality rules, which could finally resolve how the Internet will work in the future. The FCC adopted the regulations in February 2015 to ensure broadband providers treat all traffic on the Internet equally.
The crux of the dispute is the industry's objection to the legal gymnastics the FCC employed to apply to broadband networks the regulations that had been designed for the 80-year-old telephone infrastructure. Broadband providers say the new classification lets the FCC impose higher rates, which will discourage them from building or upgrading networks. The FCC says it doesn't have any plans to regulate rates or quash innovative business models.
Powell says the fight is far from over. That's not good for anyone regardless of whether they support the FCC's move or not, he said.
What's likely to happen?
It's difficult to predict the exact outcome of the case, but Powell offers a few scenarios. If the FCC loses the case entirely, Powell predicts the agency will appeal to the US Supreme Court, which he believes would likely take the case. Still, the process could delay the outcome by another three years.
What is more likely to happen is that the FCC will win portions of its argument and lose others.
On the big question of whether the agency has the authority to reclassify broadband, Powell believes there is a "high probability" that the cable industry will lose and the FCC will win. But he believes, too, that the court will likely rule against the FCC on applying the rules to wireless networks and that it will also poke holes in a portion of the regulations that allows the FCC to intervene in commercial disputes between network operators, referred to as interconnection deals.
"The FCC will try to spin it that they won the case," he said. "But I will argue that they lost."
Why? He claims that if the FCC loses these two key parts of its case, it will be as if the court pulled blocks from the base of a Jenga tower, causing the agency's entire Net neutrality regime to collapse.
As the regulators try to keep the rules in place, there will be a mad dash on both sides to appeal pieces of the decision they each lost.
The FCC declined to comment.
All of this will be happening as a presidential election steams ahead. FCC Chairman Tom Wheeler will likely only be in office a few more months, since he will likely be replaced by whoever wins the presidency. Powell also predicts that Congress, which had already started considering legislation to codify the basic Net neutrality principles while preventing the FCC from reclassifying broadband, may try to take up the issue again.
For the next several months, Powell said, there will be even more chaos and confusion.
"There's going to be this three-ring circus as the court process continues and the FCC starts some remand and a legislative effort gets reinvigorated," he said. "And all of this is happening in the midst of this crazy presidential election. So just for fun we are going to spin the dial and replace all the players."
In the end, the uncertainty in the market will continue and could last for a number of years, Powell said. All of this is bad for the broadband and wireless markets, he added, as companies question whether to experiment with new business models amid uncertainty that can already be seen in the wireless industry.
"As a former regulator, I'm very frustrated that this is beyond about who is the winner and who is the loser," he said. "We have created a lot of confusion."
The notion of Net neutrality means all Internet traffic gets treated the same. But a deep divide exists on what rules -- if any -- will fuel innovation and protect US consumers.
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