WEBVTT - Bloomberg's Schettenhelm: Court Upholds Net Neutrality (Audio)

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<v Speaker 1>Good afternoon, Charlie. US stocks are week again today made

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<v Speaker 1>Live from the first breaking news desk gone Bill Maloney,

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<v Speaker 1>Charlie all right, thank you very much, Bill Maloney, and

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<v Speaker 1>to hear live breaking news over your Bloomberg type squawk

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<v Speaker 1>Charlie Platon death so bred business flash. You're listening to

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<v Speaker 1>taking Stock with Pim Fox and Kathleen Nades on Bloomberg Radio.

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<v Speaker 1>A big win for the Internet today, a federal court

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<v Speaker 1>up held net neutrality regulations designed to ensure an open

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<v Speaker 1>Internet at handed a victory to the BABA administration and

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<v Speaker 1>a defeat to telephone and cable providers here to talk

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<v Speaker 1>to us about net neutrality. What this decision means for

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<v Speaker 1>the large corporations who are driving at what it means

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<v Speaker 1>for consumers is our own match shutting Helm. He's communications

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<v Speaker 1>litigation analyst for Bloomberg Intelligence in Washington, d C. Matt Welcome, Thanks, Kathleen,

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<v Speaker 1>thanks for having me. I love the way you sum

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<v Speaker 1>up what net neutrality is in one of your primers

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<v Speaker 1>on Bloomberg Intelligence. You say it prevents roadblocks, tolls, and

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<v Speaker 1>fast lanes for Internet traffic. And even though Internet service

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<v Speaker 1>providers owner control that infrastructure, the wires or wireless spectrum

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<v Speaker 1>on which Internet traffic travels, neutrality limits those I s

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<v Speaker 1>p s power talk to us about what this means. Sure,

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<v Speaker 1>sure so, so that's exactly right. So the basic idea

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<v Speaker 1>behind net neutrality is that the Internet works best as

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<v Speaker 1>an open highway for for all traffic. And so even

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<v Speaker 1>though your Internet service provider be at a T N

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<v Speaker 1>T or Comcast, or wireless provider Verizon or Sprint, even

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<v Speaker 1>though they own effectively the facilities that bring you the Internet,

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<v Speaker 1>the idea here is that they shouldn't be able to

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<v Speaker 1>exercise total control over all that traffic. And so the

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<v Speaker 1>SEC adopted three rules. It said that I s P

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<v Speaker 1>shouldn't be able to block traffic, it shouldn't be able

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<v Speaker 1>to slow down certain traffic, and it shouldn't be able

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<v Speaker 1>to do UH deals to prioritize certain traffics. So, for example,

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<v Speaker 1>a T and T couldn't cut a deal with Netflix

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<v Speaker 1>to give its traffic faster access to you than another

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<v Speaker 1>video service provider. All traffic should be able to drive

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<v Speaker 1>on the same roads on the same terms, Matt, who

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<v Speaker 1>are on the opposing sides you mentioned A T and T,

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<v Speaker 1>Verizon and Comcast. They might be on one side of

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<v Speaker 1>this debate. Who's on the other side, That's exactly right.

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<v Speaker 1>So so so they have have brought the challenge that

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<v Speaker 1>the Internet service providers on the other side. You have

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<v Speaker 1>the FCC UH that that has adopted this rule, adopted

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<v Speaker 1>these rules, and it's defending those rules in courts. The

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<v Speaker 1>FCC is supported by by Internet type companies, companies that

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<v Speaker 1>that depend on reaching end users and wouldn't want to

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<v Speaker 1>be interfered with by those Internet service providers whose pipes

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<v Speaker 1>they have to ride on. So companies like etc. Twitter, Netflix,

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<v Speaker 1>UH Dish, which has a television service that rides over

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<v Speaker 1>the Internet. UH, they support Google, I would imagine Google.

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<v Speaker 1>Google as well has largely been a supporter of that neutrality,

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<v Speaker 1>although it's increasingly becoming an Internet service provider itself as

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<v Speaker 1>as it expands to uh to deliver its own service

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<v Speaker 1>in some areas. So it's it's historically been a strong

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<v Speaker 1>supporter of net neutrality. It has supported these rules as well,

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<v Speaker 1>maybe not as strongly as it did in earlier years. Well, then,

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<v Speaker 1>if I'm an investor, how does this change anything for me?

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<v Speaker 1>Because it's the court upheld the existing system. Does this

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<v Speaker 1>make it harder for those providers to make money and

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<v Speaker 1>enrich their shareholders? Well, from the company's perspective, the problem

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<v Speaker 1>here is that internet service had had always sort of

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<v Speaker 1>sat outside of the regulatory box, if you will. Um.

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<v Speaker 1>The SEC always sort of took a hands off approach

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<v Speaker 1>because it was always outside of the law. Um. But

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<v Speaker 1>but since the SEC kept losing these net neutrality cases,

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<v Speaker 1>and this is the third time it's tried to adopt

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<v Speaker 1>this rule, these rule, and this is only the first

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<v Speaker 1>time that it's actually succeeded. In order to to justify

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<v Speaker 1>its rules, it brought internet service within to the heart

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<v Speaker 1>of the law. So it has the broadest potential power

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<v Speaker 1>over the service going forward. It effectively gets to determine

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<v Speaker 1>what is a reasonable practice under a very vague standard

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<v Speaker 1>UH going forward. So so, what what the companies I

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<v Speaker 1>think are most concerned about here isn't these net neutrality rules?

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<v Speaker 1>They said, Hey, we we want to We want to

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<v Speaker 1>protect net neutrality as much as the SEC wants it.

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<v Speaker 1>But what the companies are concerned about is what is

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<v Speaker 1>the FEC going to do with that broad reasonableness power

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<v Speaker 1>uh to oversee internet service going forward? If rates get

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<v Speaker 1>too high, will we see the SEC stepping in to

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<v Speaker 1>regulate the rates UH next? I think that's that's sort

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<v Speaker 1>of the big driver of the lawsuit. Matt just quickly,

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<v Speaker 1>is this the last legal word on neutrality? Well, if

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<v Speaker 1>if the Internet service providers have their way, it won't be.

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<v Speaker 1>They they will likely ask the full Appeals Court to

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<v Speaker 1>reconsider this decision, and that will be due at the

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<v Speaker 1>end of July. They also have the option to take

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<v Speaker 1>this to the Supreme Court or try to take this

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<v Speaker 1>to the Supreme Court, but that's a that's a tough

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<v Speaker 1>tough road to to follow that the Supreme Court denies

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<v Speaker 1>most cases. So this very well could be the final

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<v Speaker 1>word in the case. Thank you very much for joining us.

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<v Speaker 1>Matt Chettenheim is communications litigation analyst for Bloomberg Intelligence. Joining

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<v Speaker 1>us from Washington, d C, home to Bloomberg Fm. You're

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<v Speaker 1>listening to taking Stock. I'm Pim Fox, my co host

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<v Speaker 1>Kathleen Hayes. This is Bloomberg Radio. Bloomberg taking Stock is

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