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Bloomberg's Schettenhelm: Court Upholds Net Neutrality (Audio) · Bloomberg Intelligence

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  Speaker 1: Charlie Platon death so bred business flash. You're listening to
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  Speaker 1: taking Stock with Pim Fox and Kathleen Nades on Bloomberg Radio.
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  Speaker 1: A big win for the Internet today, a federal court
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  Speaker 1: up held net neutrality regulations designed to ensure an open
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  Speaker 1: Internet at handed a victory to the BABA administration and
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  Speaker 1: a defeat to telephone and cable providers here to talk
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  Speaker 1: to us about net neutrality. What this decision means for
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  Speaker 1: the large corporations who are driving at what it means
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  Speaker 1: for consumers is our own match shutting Helm. He's communications
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  Speaker 1: litigation analyst for Bloomberg Intelligence in Washington, d C. Matt Welcome, Thanks, Kathleen,
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  Speaker 1: thanks for having me. I love the way you sum
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  Speaker 1: up what net neutrality is in one of your primers
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  Speaker 1: on Bloomberg Intelligence. You say it prevents roadblocks, tolls, and
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  Speaker 1: fast lanes for Internet traffic. And even though Internet service
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  Speaker 1: providers owner control that infrastructure, the wires or wireless spectrum
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  Speaker 1: on which Internet traffic travels, neutrality limits those I s
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  Speaker 1: p s power talk to us about what this means. Sure,
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  Speaker 1: sure so, so that's exactly right. So the basic idea
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  Speaker 1: behind net neutrality is that the Internet works best as
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  Speaker 1: an open highway for for all traffic. And so even
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  Speaker 1: though your Internet service provider be at a T N
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  Speaker 1: T or Comcast, or wireless provider Verizon or Sprint, even
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  Speaker 1: though they own effectively the facilities that bring you the Internet,
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  Speaker 1: the idea here is that they shouldn't be able to
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  Speaker 1: exercise total control over all that traffic. And so the
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  Speaker 1: SEC adopted three rules. It said that I s P
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  Speaker 1: shouldn't be able to block traffic, it shouldn't be able
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  Speaker 1: to slow down certain traffic, and it shouldn't be able
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  Speaker 1: to do UH deals to prioritize certain traffics. So, for example,
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  Speaker 1: a T and T couldn't cut a deal with Netflix
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  Speaker 1: to give its traffic faster access to you than another
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  Speaker 1: video service provider. All traffic should be able to drive
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  Speaker 1: on the same roads on the same terms, Matt, who
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  Speaker 1: are on the opposing sides you mentioned A T and T,
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  Speaker 1: Verizon and Comcast. They might be on one side of
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  Speaker 1: this debate. Who's on the other side, That's exactly right.
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  Speaker 1: So so so they have have brought the challenge that
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  Speaker 1: the Internet service providers on the other side. You have
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  Speaker 1: the FCC UH that that has adopted this rule, adopted
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  Speaker 1: these rules, and it's defending those rules in courts. The
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  Speaker 1: FCC is supported by by Internet type companies, companies that
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  Speaker 1: that depend on reaching end users and wouldn't want to
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  Speaker 1: be interfered with by those Internet service providers whose pipes
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  Speaker 1: they have to ride on. So companies like etc. Twitter, Netflix,
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  Speaker 1: UH Dish, which has a television service that rides over
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  Speaker 1: the Internet. UH, they support Google, I would imagine Google.
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  Speaker 1: Google as well has largely been a supporter of that neutrality,
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  Speaker 1: although it's increasingly becoming an Internet service provider itself as
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  Speaker 1: as it expands to uh to deliver its own service
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  Speaker 1: in some areas. So it's it's historically been a strong
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  Speaker 1: supporter of net neutrality. It has supported these rules as well,
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  Speaker 1: maybe not as strongly as it did in earlier years. Well, then,
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  Speaker 1: if I'm an investor, how does this change anything for me?
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  Speaker 1: Because it's the court upheld the existing system. Does this
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  Speaker 1: make it harder for those providers to make money and
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  Speaker 1: enrich their shareholders? Well, from the company's perspective, the problem
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  Speaker 1: here is that internet service had had always sort of
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  Speaker 1: sat outside of the regulatory box, if you will. Um.
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  Speaker 1: The SEC always sort of took a hands off approach
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  Speaker 1: because it was always outside of the law. Um. But
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  Speaker 1: but since the SEC kept losing these net neutrality cases,
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  Speaker 1: and this is the third time it's tried to adopt
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  Speaker 1: this rule, these rule, and this is only the first
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  Speaker 1: time that it's actually succeeded. In order to to justify
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  Speaker 1: its rules, it brought internet service within to the heart
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  Speaker 1: of the law. So it has the broadest potential power
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  Speaker 1: over the service going forward. It effectively gets to determine
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  Speaker 1: what is a reasonable practice under a very vague standard
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  Speaker 1: UH going forward. So so, what what the companies I
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  Speaker 1: think are most concerned about here isn't these net neutrality rules?
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  Speaker 1: They said, Hey, we we want to We want to
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  Speaker 1: protect net neutrality as much as the SEC wants it.
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  Speaker 1: But what the companies are concerned about is what is
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  Speaker 1: the FEC going to do with that broad reasonableness power
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  Speaker 1: uh to oversee internet service going forward? If rates get
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  Speaker 1: too high, will we see the SEC stepping in to
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  Speaker 1: regulate the rates UH next? I think that's that's sort
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  Speaker 1: of the big driver of the lawsuit. Matt just quickly,
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  Speaker 1: is this the last legal word on neutrality? Well, if
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  Speaker 1: if the Internet service providers have their way, it won't be.
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  Speaker 1: They they will likely ask the full Appeals Court to
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  Speaker 1: reconsider this decision, and that will be due at the
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  Speaker 1: end of July. They also have the option to take
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  Speaker 1: this to the Supreme Court or try to take this
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  Speaker 1: to the Supreme Court, but that's a that's a tough
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  Speaker 1: tough road to to follow that the Supreme Court denies
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  Speaker 1: most cases. So this very well could be the final
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  Speaker 1: word in the case. Thank you very much for joining us.
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  Speaker 1: Matt Chettenheim is communications litigation analyst for Bloomberg Intelligence. Joining
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  Speaker 1: us from Washington, d C, home to Bloomberg Fm. You're
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  Speaker 1: listening to taking Stock. I'm Pim Fox, my co host
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  Speaker 1: Kathleen Hayes. This is Bloomberg Radio. Bloomberg taking Stock is
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