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By Scott Bradner
At first it looked like the FCC did a Good Thing for the Internet the other day but after thinking about it for a while it's not at all clear that the action was as big a deal as it seemed to be.
A while back voice over IP (VoIP) service provider Vonage (http://www.vonage.com/) complained to the U.S. Federal Communications Commission (FCC) that Madison River Communications (http://www.madisonriver.net/), a small North Carolina-based rural telephone company operating also as an Internet service provider (ISP), had inserted filters into its ISP network to block VoIP traffic. This meant that it was impossible for Vonage to offer VoIP service to customers of Madison River's Internet service.
The FCC investigated and discussed the accusations with Madison River Communications. Madison River and the FCC quickly agreed to a consent decree (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-543A2.pdf) that said that Madison River Communications would not block VoIP traffic for at least 30 months and for Madison River Communications to make a "voluntary payment" of $15,000 to the FCC "in consideration for the termination" of the investigation of Vonage's accusations. The consent decree is backed up by an FCC order (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-543A1.pdf). Outgoing FCC Chairman Michael Powell issued a statement that patted the FCC on the back for its quick action. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-543A1.pdf)
The consent decree said that the investigation into Madison River regarding Madison River's compliance with section 201(b) of the Communications Act of 1934, as amended. (http://www.law.cornell.edu/uscode/html/uscode47/usc_sec_47_00000201----000-.html) But the consent decree specifically says that it does not provide any legal finding that Madison River had actually violated the Act. In other words, Madison River signed the paper and paid the money to get the FCC off their back but no court has determined that what Madison River did was legally wrong.
At first it looked very good that the FCC had stepped in to stop an ISP from blocking the ability of its customers to purchase Internet-based services from whomever they wanted to. But a closer reading finds a number of problems that removes most of the joy.
The first problem has already been mentioned -- there is no legal finding that blocking VoIP is wrong that means that a better funded provider (and one that was not in the middle of an IPO) may just go ahead and test the precedent.
The second problem is that the resolution is VoIP specific -- the only thing that Madison River agreed to not block is VoIP. Under this consent decree they can block anything else that they want to block. This is nothing like the basic open pipes concept that people like Stanford Professor Larry Lessig have been pushing for the FCC to support (http://www.interesting-people.org/archives/interesting-people/200212/msg00053.html.
The third problem is that the decree is of a limited duration. Madison River can start blocking again in 30 months.
The fourth, and most basic, problem is that the Act that the FCC referred to may not cover Internet service providers that are not part of a telephone company. Thus, non-telephone company-based ISPs may be able to block specific applications at will under current laws and may are already doing under the excuse of blocking SPAM.
Maybe both sides in this case did not actually want to know if the FCC actually has the authority to force open pipes in all ISPs -- Madison River because the answer might be yes and the FCC because the answer could easily be no.
Even though there was less to this case than the hype indicated it is still better that the FCC got someone to stop blocking in one specific case than having the FCC formally conclude that partially open Internet pipes are OK.
disclaimer: Figuring out when its best to actually answer a question is something that I hope is taught in both the Harvard Law and Business schools but I did not check and the above case study is my own.