The Railroad, Net Neutrality, and Common Carriage

Imagine riding a train from Boston to Washington, D.C. and having to stop and pay a new fare each time you ended up on a line owned by a different train line. It would be a pain in the ass, it might be mayhem, and it would probably be cost prohibitive for people and businesses who wanted to ship themselves or their goods across the country.

Thankfully that can’t happen, because of common carriage regulations, maintained by the Federal Railroad Association.

On the railways, the legal concept of common carriage holds that a business that is “fit, willing and able” to carry persons or freight must do so as long as a reasonable fee is paid, there is space aboard, and there is no reasonable grounds to refuse the person or freight passage aboard.

Common carriage regulations for the railroad became concrete in the U.S. around the turn of the 20th century after surviving court challenges (they arguably trace their origins back to the Roman empire). They also also extend into other transportation industries — airlines, buses — as well as some utilities. They helped to ensure the transformative service was  closed to monopolies and price gouging, and thus open to the country for business and for travel.

Well that’s cool, Yester, you say. Thanks for telling me. But who cares and what does this have to do with anything? It has plenty to do with the recent ruling on net neutrality that could threaten the way the Internet works.

In case you missed it, a court of appeals ruled that Verizon could in fact charge users like Netflix or Amazon — who require way more bandwidth than, oh, Yester — a higher fee for higher speed access to Verizon’s infrastructure. So big-company-on-big-company brawling, who cares, right? Sure, except one has to assume that much of that cost and headache would be passed on to the consumer.

Still lost? Bear with me.

Fair access to railroads at the turn of the 20th century was deemed so vital to the national economy that they were nationalized to ensure an even playing field and discourage monopolization of the rails, shady price gouging and rate hiking. The inevitable challenge was struck down by the Supreme Court via an interpretation of the Article 1, Section 8, Clause 3 of the Constitution, aka, the Commerce Clause.

The Commerce Clause holds that anything that crosses state or national borders is under the jurisdiction of the feds and the Congress. For the purposes of the rails, this meant that once the rail was laid, anyone could use them without having to worry about paying different fees to different companies upon crossing from one section of track to another.

Now here’s the turn.

Considering that as of 2012, the internet accounted for 4.7 percent (or $684 billion) of the entire US economy, you could argue (and indeed many have) that the web ought to be an arena best left open for all to use, just as were the rails. Our old friend the FCC has more or less agreed. Though broadband access is not classified as a common carrier, the commission launched 2010 Open Internet regulations that more or less hold providers to the standard.

When these policies are taken into consideration, it looks like a pretty alright way to run things, and like the Internet you’ve come to know and love. Sort of a digital Mos Eisley Cantina, where people mind their own business and everything works itself out.

But Verizon challenged the FCC’s policies in court on the grounds that the FCC had no right to enforce or even establish the above standards. Rather than say it’s a utility, cable companies classify broadband as an “information provider” — a label the FCC had agreed to a decade earlier, and ultimately doomed the FCC’s stance in the latest court case.

Had the FCC, say, called broadband servicer telecommunications providers, they would be barking up the right fiber optic cable. But they’re the FCC and they managed to un-ironically screw up the phrasing. Last month a three-judge panel in the DC Circuit Court of Appeals agreed with Verizon by a final score of 3-0. An information service provider, as opposed to a telecommunications provider, cannot be considered a common carrier. As The Verge eloquently puts it, the FCC “used the wrong fucking words.”

This ruling (as well as the myriad challenges before it) has the Internet worried that the door is opening for mega-providers of broadband infrastructure — AT&T, Comcast, and  plaintiff-Verizon, for starters — to basically hold sites and users hostage to their fees. The notion flies in the face of the idealized vision of the web as a free and open space that anyone could play around with, without having to worry about the man taking his cut.

Of course, Verizon has assured customers that they won’t be evil or dastardly or anything like that. And the thought of a massive American company behaving unethically — wait a second….hm.

Today, the rails employ over 180,000 men and women, and they are pretty well paid.  The rail system directly or indirectly supports 4.5 to 5.5 million jobs across the nation. Additionally, the top three common carrier rail freight companies in the U.S. (Union Pacific of Transcontinental Railroad fame, BNSF and CSX) made a combined $44.4 billion in operating revenue in 2010, all while operating under the title and obligations that come along with the common carrier tag.

Te rails have done pretty well for themselves. They have operated pretty much nonstop since they first went into the ground and show no signs of stopping. Companies can start and collapse and thrive and specialize and they all get to use the same rails.

To be sure, Verizon and its telecom compadres far and away outstrips any of the big three rail companies with a market cap value of $137.4 billion. Their products are ubiquitous, so let’s all accept that the gap in market value makes a whole lot of sense.

While the court said the FCC could not classify broadband providers as common carriers, it also said the FCC has the right to regulate the Internet. This puts the ol’ communications council in the position to potentially play hero if it can manage to choose the right words.

Meanwhile, the House the Senate have both introduced new bills which would maintain the Open Internet while the FCC figures out how to regulate it like it has been. Which is to say like how the railroads, the highways, and other public essentials are regulated — and how the Internet ought to be.

photo credit: Kool Cats Photography, Creative Commons/flickr