Magazine article Risk Management

A Neutral Corner

Magazine article Risk Management

A Neutral Corner

Article excerpt

Three years ago, it was discovered that cable and internet service provider Comcast, in an apparent effort to stem rampant online piracy and perhaps curry favor with lawsuit-prone media groups like the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA), had been quietly employing a simple strategy to prevent the illegal distribution of copyrighted files. It would slow customer access to BitTorrent, a popular, file-sharing service that allows users to trade large video and audio files--many of which are pirated--over the internet.

It was a smart risk management move for two reasons. First, it ingratiated them with RIAA, which had already become notorious for suing its own customers for distributing pirated files and was now looking for ways to stop piracy before it started. And second, for a company like Comcast that likely already had designs on becoming a content provider (as evidenced by its merger with NBC two years later), it was a good idea to start protecting its own interests without having to worry about fighting copyright infringement lawsuits down the road. The problem was that the FCC said that Comcast's method of network traffic management, known as "throttling," violated regulations. Comcast was ordered to stop the practice or face possible fines and injunctions.

Not surprisingly, Comcast disagreed with the ruling and took the battle to court. And in April of this year, the U.S. Court of Appeals for the District of Columbia ruled that the FCC did not have the authority to stop Comcast from blocking user access. This was because broadband had been classified as "information services" under the Communications Act and therefore was not subject to the same obligations as "telecommunications services" providers like phone companies. The FCC responded by saying that it would seek to reclassify broadband in what promises to be a fight that could drag on for years.

At the heart of the controversy is the concept of "network neutrality," a principle that states that once an internet user pays for access, the service provider should not be allowed to restrict that access in any way, or if it does, all restrictions should be imposed equally to all users without discrimination. …

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