Net Neutrality Ruling Harms Home Buyers

The U.S. Court of Appeals for the District of Columbia on Tuesday ruled that key elements of the Federal Communications Commissions’(FCC)  2010 Open Internet Order are invalid. (Verizon v. FCC) The order, which sets forth what are known as network neutrality rules, prohibited Internet Service Providers(ISPs) like Verizon, Comcast, and AT&T from discriminating in the network services they deliver to content providers.

The impact on real estate? This will cause havoc for home buyers and sellers. The business of real estate is increasingly conducted online. Streaming video, virtual tours, and voice-over-Internet-protocol telephone service are just some of the technologies that are commonly used by REALTORS©. What’s more, new technologies will be adopted that are likely to require unencumbered network access.

By tossing out the rules, ISPs are free to charge content companies higher fees to deliver Internet traffic faster or in an otherwise more efficient way. This has potential implications for the real estate industry as REALTORS© and other industry providers act as content providers through their websites.

Now the FCC could appeal the decision to the U.S. Supreme Court. If it does, this additional litigation could delay the effects of the ruling… but here’s what I think will happen: The FCC will reclassify broadband service as a common carrier, thereby bringing ISPs deeper within their regulatory authority... the “be careful what you complaint about” solution.

So why did Verizon take the FCC to court over net neutrality? Shortly after the Open Internet Order was instituted, Verizon claimed the FCC doesn’t have regulatory authority to impose net neutrality rules on any ISP.

(Background: The 1934 Communications Act and 1996 Telecommunications Act are split into seven major sections or “titles.” Each of these titles describes different regulations for different communications services. Title II contains all of the regulations that apply to “common carriers,” which are companies or organizations that provide a communication service to the general public.)

Ah, but here’s the rub… ISPs are classified under Title I of the Communications Act as providing “information services.” Title I says that no discrimination or price regulations of information services are “necessary for consumer protection” and the commission can’t regulate those services.

So why is ‘net neutrality’ so important for home buyers and sellers? It’s basic… the preservation of online innovation by prohibiting companies from discriminating against some users and content, or prioritizing some content over others, is key to a free and vital housing market (much less the ‘Net as a whole.)

So pick your outcome: disorder, upheaval, chaos... this ruling has the potential to be one of the most disruptive situations faced - to date - in the Internet Age.