Would Thomas Jefferson Have Supported Net Neutrality?

It's probably safe to say the authors of the U.S. Constitution couldn't have even begun to fathom a thing like the automobile or the telephone, much less the Internet.

Had it been around at the time, would George Washington have stayed home watching cat videos instead of leading the revolutionary army in its conquest over Great Britain? Would Thomas Jefferson have taken to Facebook in the presidential election of 1800 to accuse John Adams of being a "hideous hermaphroditical character, which has neither the force and firmness of a man, nor the gentleness and sensibility of a woman"?

While we may never know the answer to important questions like these, what we can say with a greater degree of certainty is that the Constitution, while far removed in time from the advent of the Internet, is the very reason a powerful federal court of appeals struck down (link opens PDF) so-called net neutrality last week.

A primer on net neutrality
All joking aside, net neutrality is a very serious issue.

It's based on the principal that Internet service providers like Comcast  (NASDAQ: CMCSA  ) and Verizon (NYSE: VZ  ) should treat all data on the Internet equally. It was formally codified, at least until Tuesday, in a series of rules passed by the Federal Communications Commission, which prohibited broadband providers from blocking or otherwise discriminating against online content based on user, source, or application.

Under these rules, for instance, Comcast couldn't block or impede your access to a competitor's website, such as Netflix (NASDAQ: NFLX  ) , in an effort to cause you to turn off the computer and tune into its own television cable operations, NBCUniversal. Along these same lines, Comcast was similarly barred from charging companies like Netflix a fee for prioritized access to end users -- think faster streaming speeds.

To be clear, this is more than just a hypothetical threat.

In the court case, which was brought by Verizon to challenge the FCC's net neutrality rules, its own attorney admitted, "but for the rules, we would be exploring those commercial arrangements." And in the past, broadband providers like AT&T (NYSE: T  ) and Time Warner have openly acknowledged that online video aggregators like Netflix and Hulu, which is owned by a consortium of media companies including Disney (NYSE: DIS  ) and the Fox Broadcasting Company, compete directly with their own "core video subscription services."

At this point, in turn, you'd be excused for wondering why a panel of highly educated and distinguished judges would eviscerate something as patently consumer-friendly as net neutrality. And the answer lies, as you may have guessed from the opening paragraphs of this column, in the U.S. Constitution.

The constitutionality of net neutrality
It's a well-known axiom of constitutional law that any power not vested in the federal government by the Constitution is reserved for the states. According to the 10th Amendment, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

Does this mean the federal government has no power to regulate things like the Internet that weren't even remotely envisioned by the authors of the Constitution? Of course not.

In the years since it was signed into law, courts have interpreted the Constitution liberally, if you'll excuse the unintended political connotation, around a handful of key provisions, one being the Commerce Clause, which gives the federal government the power to "regulate commerce with foreign nations and among the several states." The implication is that any activity that touches on interstate commerce, as the Internet most assuredly does, can be regulated by Congress, or, in this case, by a federal agency delegated authority by Congress.

Herein lies the issue at the heart of net neutrality
The question before the court in the case brought by Verizon was whether the FCC, in passing its net neutrality rules, had exceeded the authority granted to it by Congress in the Telecommunications Act of 1996. The answer to this question, according to the court, was both yes and no.

As the court explained:

[T]he Commission has established that section 706 of the Telecommunications Act of 1996 vests it with affirmative authority to enact measures encouraging the deployment of broadband infrastructure. [...] That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. 

That is to say, the FCC can't have its cake and eat it to. If it expressly exempts broadband carries from treatment as common carriers, which presupposes more intense regulatory oversight, then it can't go back and treat them as such with specific rules, which is exactly what the court found in this case.

But here's the catch: The matter was remanded by the court to the FCC itself for "further proceedings consistent with this opinion." Thus, if you've been following along, one such course the FCC could take would be to classify broadband providers as common carriers, which would thereby presumably allow the agency to reinstitute full-fledged net neutrality.

Will it do so? That remains to be seen. But in the meantime, let's hope the absence of net neutrality doesn't spell the end of unfettered access to our favorite websites like Netflix and Amazon, and, for that matter, our favorite investments as well.

What stock would Thomas Jefferson buy?
This too is hard to say. But you can be sure that he'd take a good hard look at "The Motley Fool's Top Stock for 2014." Just click here to access our popular free report revealing the name of this under-the-radar company.


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  • Report this Comment On January 17, 2014, at 3:29 PM, pondee619 wrote:

    But, "Would Thomas Jefferson Have Supported Net Neutrality?" Why can't you answer your question?

    I submit, he would. "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter." Thomas Jefferson.

    "It behooves every man who values liberty of conscience for himself, to resist invasions of it in the case of others: or their case may, by change of circumstances, become his own."

    Thomas Jefferson

    Jefferson believed that the free flow of ideas and opinions was necessary for a free and prosperous land. Allowing the current conduit of ideas and opinions, the internet, to be controled by the few would be contrary to his beliefs.

  • Report this Comment On January 17, 2014, at 4:21 PM, drseusphd wrote:

    Don’t know about Jefferson but Ben Franklin would have surely approved Net Neutrality. The US postal service was the first Government run public access communications system…

    The USPS traces its roots to 1775 during the Second Continental Congress, where Benjamin Franklin was appointed the first postmaster general.

    Thank you for the clarifying one goal of eliminating net neutrality is to help Verizon eliminate the competition such as net flix …On the other hand Almost all of what I do on the internet is for entertainment purposes whether reading motley fool blogs or getting email? So if Verizon wants to delegate what email program I use or what websites or magazines I use this is very unnerving…

    For Verizon to claim that Netflix or Amazon aren’t paying for their data hoggery is ridiculous.. We all pay at the home end for our pipeline access speed of data and every website including Netflix must also pay on their end for as many Data access lines as they need to pipe out the data… its seems like Verizon wants to wet their beak in the profits of venture capitalist but don’t want any associated risk.

    Communications companies have been granted rights to high technology developed with government resources much of it from tax payer financed DARPA and NASA projects as well as the unfettered usage of government highways, city streets etc to build their infrastructure, all with tax write offs government grants and subsidies, this was for the good and convenience of the unwashed masses. To claim now that they should have sole control of their property is ridiculous. What is the alternative? Every net flix or hulu or motley fool website should build their own network poles manholes etc to deliver their own content…. If this is the case the Government will have to take control of the communications companies and run it along the same lines and for the same purpose as the United States Postal Service.

  • Report this Comment On January 18, 2014, at 12:58 PM, tc1776 wrote:

    Jefferson would have opposed "net neutrality" because he believed: "That government which governs best governs least." Net neutrality is a thinly disguised effort by major consumers of bandwidth like Netflixs and YouTube to avoid paying for the cost of the vastly disproportionate amount of bandwidth that they utilize which means that they are shifting the cost of their bandwidth usage over to the average internet user. Net Neutrality will discourage investment by ISPs in better internet service since they will not be allowed to charge higher rates to heavy users like Netflixs and YouTube which already consume by far the share of bandwidth. This Motley Fool article is completely wrongheaded.

  • Report this Comment On January 18, 2014, at 12:59 PM, tc1776 wrote:

    Net Neutrality is croney capitalism at its worst!

  • Report this Comment On January 18, 2014, at 1:07 PM, rattler15 wrote:

    This question above: "would George Washington have stayed home watching cat videos instead of leading the revolutionary army..." is unbelievably stupid. Suggest the author should read Washington's biography before moronic speculation. Washington spent 7 years away from his business, his home, and his family holding the Continental Army together, when without him it would have disintegrated, along with the Revolution. What a stupid speculation.

  • Report this Comment On January 18, 2014, at 1:26 PM, drseusphd wrote:

    we all pay for our data access no one is getting a free ride... including Netflix Hulu and You tube for their guaranteed data connection speed they need physical connections and they have to pay for them the same as the rest of us, besides that business's are charged more already..

  • Report this Comment On January 18, 2014, at 2:04 PM, thedoge wrote:

    Net neutrality would not be an issue if the market for Internet access were genuinely competitive. If it were, providers who tried to throttle or block (say) Netflix streaming would be cutting their own throats.

    But, of course, it's not competitive. Instead, it is (at best) an oligopoly. Hell, in small towns and rural areas it's often a monopoly. So market forces can't operate and cartel members can pretty much do as they like.

    It's a reminder that corporations are big on giving lip service to the "free market" while doing everything in their not inconsiderable power to destroy it.

    The solution is to treat the Internet providers as common carriers since that is, in reality, what they are. Unless, of course, they want to break themselves up into smaller, more competitive companies.

    Yeah, right.

  • Report this Comment On January 20, 2014, at 1:26 PM, Mega wrote:

    I don't think Jefferson would be that concerned about net neutrality. He would have his hands full as CEO of eSlave.com.

  • Report this Comment On January 20, 2014, at 1:46 PM, damilkman wrote:

    Greetings. The basic problem is CDN's cost model is metered and the Eyeballs companies is flat rate. A company like COMCAST gets X dollars from a subscriber regardless if they use the service or not. Conversely CDN's and ISP's(Internet Service Providers) When traffic increases, the eyeball does not get any compensation where a CDN does. Until that paradox is resolved there are always going to be problems with eyeballs pushing for compensation.

  • Report this Comment On January 20, 2014, at 2:35 PM, miteycasey wrote:

    So what keeps Comcast, SBC, Cableone, and Verizon from blocking those sites completely?

  • Report this Comment On January 20, 2014, at 7:48 PM, taloft wrote:

    [quote]Jefferson would have opposed "net neutrality" because he believed: "That government which governs best governs least." Net neutrality is a thinly disguised effort by major consumers of bandwidth like Netflixs and YouTube to avoid paying for the cost of the vastly disproportionate amount of bandwidth that they utilize which means that they are shifting the cost of their bandwidth usage over to the average internet user. Net Neutrality will discourage investment by ISPs in better internet service since they will not be allowed to charge higher rates to heavy users like Netflixs and YouTube which already consume by far the share of bandwidth. This Motley Fool article is completely wrongheaded.[/quote]

    This right here. It passes the cost onto everyone instead of just those using the service.

  • Report this Comment On January 21, 2014, at 12:59 AM, drseusphd wrote:

    Put aside all the philosophical arguments because the Reality is "All" internet users will be hurt by eliminating net neutrality...This means YOU..

    the system that now exists is that data is processed as streaming real time like a telephone signal or it can be delayed like a text or email..It is basically first come first serve first in first out ,,with a priority on live streaming data but Amazon isn't live streaming and Netflix doesn't have to be live streaming either that is what buffers are for on the home end...if Net Neutrality goes into affect we will see what a real data hog is because Net flix and Amazon will THEN have to pay Verizon more and their service prices will go up...in exchange they will prioritize their data and it will bump the average users data it will no longer be first in first out it will be whenever they get around to letting the average users data go through.....and you will never know...because just like when you assume that your friend isn't answering their cell phone they are talking a lot of time it is just that the cell tower is all backed up with calls and sent you a busy signal... you will blame a computer virus or some thing else but your new non net neutral service will be cutting in line and costing you more and Verizon and ATT will be reaping the rewards for screwing everyone

  • Report this Comment On January 21, 2014, at 4:09 PM, RobertC314 wrote:

    The amount of misinformation in these comments is astounding. I wanted to clarify a few things:

    (1) damilkman's comment about CDNs and Service companies is absolutely correct. In layman's terms: companies like Verizon charge customers a flat rate, but they in turn get charged by usage which makes them unhappy about heavy usage. There is, however, no regulatory reason why they cannot charge customers by usage (even if it is just to punish heavy users). Please take note, this has NOTHING to do with het neutrality.

    (2) As was pointed out by many people, companies like Netflix DO get charged for their bandwidth (a whole lot). Please take note, this has NOTHING to do with net neutrality.

    (3) Just like the postal service can't decide not to deliver certain types of mail, even if it is to/from a competitor like FedEx (thank you drseusphd for the example), up until now the companies that transmit and deliver the internet were not allowed to filter data, even if it is to/from a competitor like Netflix. Please take note, this IS the question with net neutrality: can a company that delivers the internet filter out any traffic that it doesn't like? The reason is irrelevant, but generally it will be because of competition with other services it offers.

    (4) Allow me to reiterate: net neutrality is NOT ABOUT BANDWIDTH. Please, please, please, no one try to make the bandwidth argument in this thread again, it is not related to net neutrality.

    Finally, this is worth reading, a Washington Post reader has the best explanation of net neutrality so far:

    http://www.washingtonpost.com/blogs/the-switch/wp/2014/01/19...

  • Report this Comment On January 21, 2014, at 4:41 PM, drseusphd wrote:

    Hey Rob ...if you are saying that the Lines can actually handle all the data... then the only reason that the phone companies want to do away with net neutrality is for pure greed...and as I said before they just want to wet their beak,,, get their slice off of successful business without taking the loss for the failures ...this is pure greed and the power to control data flow or choking it seems like too much power in the hands of back room dealing global capitalist...That's allegedly why they broke up the Telco monopolies in the first place

  • Report this Comment On January 24, 2014, at 4:40 PM, ReaderShawn wrote:

    Thank you, Robert, for making the comment I wanted to, only better. Also, I love the link with Verizona family explanation.

    Also, I think thedodge did a good job pointing out the root of the problem, which is Internet access providers tend to operate in an environment where schmoozing local politicians to get monopoly contracts pays better than providing good service to "customers". I haven't heard of a good solution to this problem, but without one net neutrality makes sense.

    I know of one congressperson and two senators that will be getting an earful if Comcast ever starts charging Amazon or Netflix more for the bandwidth I already bought. They better hope those campaign contributions from Verizon are worth it.

  • Report this Comment On January 24, 2014, at 8:28 PM, CFosterKane wrote:

    Better constitutional question might be "Would James Madison approve of net neutrality?" or "Would Alexander Hamilton approve of net neutrality?" Jefferson drafted the Declaration of Independence (there were a few edits from others) but had little to do with the Constitution (see Jon Meacham's recent Jefferson bio).

  • Report this Comment On January 26, 2014, at 7:25 PM, piasabird wrote:

    If you are a spammer this is a great idea.

  • Report this Comment On January 27, 2014, at 7:57 AM, tomd728 wrote:

    Certainly it takes time to realize the true effect of any

    State v Federal argument and too often the issue therein is never resolved.

    We look at the "sovereign" resolve as a continuing sensible resolution only to have that edict appear senseless over time when, as in too many instances, we look back asking "How did this resolution ever reach acceptance ?" when in practice, it can take acts of war to turn the logic back to practical resolution .........honest and well debated does not always turn the way of logic and empathy.

    It would certainly take more than a conclusion by that honest and fair debate within and without.

  • Report this Comment On January 27, 2014, at 1:23 PM, PondRipples wrote:

    If the Feds can't regulate the internet under telecommunications then they still have the power under Commerce because the signals cross state borders and we are charged for those communications - - Correct?

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