Maryland Rules Uber is a Common Carrier – Will FCC Agree?

Published August 8, 2014

The Daily Record reports that the Maryland Public Service Commission ruled that Uber is a common carrier subject to its regulatory jurisdiction.  

The PSC stated: 

“[W]hen viewed in their totality, the undisputed facts and circumstances in this case make it clear that Uber is engaged in the public transportation of persons for hire. Thus, Uber is a common carrier and a public service company over whom the Commission has jurisdiction…

In 60 days, PSC will draft “new regulations that protect the public interest,but also reflect the evolving nature of transportation services like Uber.”

Uber has threatened to leave the state if Uber is treated the same as their regulated taxi and transportation-for-hire competitors are under Maryland law.

Relevance to FCC Open Internet Order

This PSC precedent has big relevance and implications for the FCC’s high-profile redo of its Open Internet Order.

Both Uber and Lyft are online transportation network companies and members of the Internet Association, which recently filed comments with the FCC in the Open Internet order proceeding.

The Internet Association opposes the current FCC proposal to use the “commercially reasonable” standard that the DC Court of Appeals indicated would pass legal muster. Itrecommends that the FCC’s Open Internet “Rules Should Prohibit Broadband Internet Access Providers from Charging For Enhanced or Prioritized Access.”  

This means Uber and Lyft are recommending to the FCC that it treat ISPs like common carriers in direct contravention of the D.C. Court of Appeals decision in Verizon v. FCC.

That decision explicitly said:

In other words, but for the Open Internet Order, broadband providers could freely impose conditions on the nature and quality of the service they furnish edge providers, potentially turning certain edge providers—currently able to “hire” their service for free—into paying customers. The Commission may not claim that the Open Internet Order imposes no common carrier obligations simply because it compels an entity to continue furnishing service at no cost.”

Uber, Lyft and the Internet Association are advocating that the FCC should regulate the ISPs like what the Court views as common carriers, by discriminating against ISP information-service-providers in favor of edge information-service-provider networks.

To date the Internet Association and its members have imagined that they provide no services that could be ruled by state, Federal or foreign regulators to be common carrier regulated services. This Maryland PSC ruling is stark evidence that their core political assumption of perfect immunity from common carrier regulation is fantasy.

Let me be crystal clear, I am not advocating Uber and Lyft be subject to common carrier regulation. What I am advocating for is equal treatment under the law and a level playing field, where public policy treats every business in the Internet ecosystem in a consistent manner, so every business participant has the freedom to innovate and invest without ex ante regulation.

The Internet Association’s implicit current call for aggressive regulatory discrimination — to discriminate in favor of their “edge” business models and against ISPs’ models, not on the basis of market power or any evidence of market or consumer harm– is wrong and obviously self-serving. It is classic regulatory hypocrisy and the double standard enshrined in the well-known phrase: “Regulate thee but not me.”

While the Internet Association claims their approach is ‘light touch’ that is deceptive and inaccurate. The Internet Association is calling for a permanent zero-price for all Internet downstream traffic so their business gets free Internet service at the direct expense of Internet users that must implicitly pay most all of the Big Internet companies’ big bandwidth bill.

No matter how much the Internet Association aristechracy imagines that they are special, and that they enjoy a special political exemption from the Constitution, law and regulations, that remains fantasy and wishful thinking… at least for now.    

The Maryland PSC decision that Uber is a common carrier is a real world reminder that outside of the Big Internet’s powerful aristechratic sphere-of-influence, there can be equal treatment under the law.

In closing, will the FCC want to open the Title II can-of-worms, and threaten the entire Internet ecosystem with the potential virus of common-carrier obligations, when they know they cannot control how an FCC title II broadband decision would ultimately apply, because the courts, states, and foreign regulators will all have their legal say in what the boundaries of the FCC’s determination ultimately turn out to be?


[Originally published at Precursor Blog]