FCC 'Open' Internet May Mean 'Paid'

Google I/O 2014: 8 Things To Watch

The Federal Communications Commission on Thursday voted 3-to-2 to open a controversial Internet regulation proposal to public comment, beginning a process that might normalize paid prioritization of Internet traffic.

The proposal, put forth by FCC Chairman Tom Wheeler, represents an attempt to offer rules for broadband service providers that fit within existing communications laws. The agency's 2010 rules were rejected earlier this year in a legal challenge by Verizon, leaving the agency's ability to regulate Internet service providers up in the air.

As a result of the vote, the agency will accept input from the public about its proposal for the next four months.

[When government and healthcare clash: Read How My Cousin, President George W. Bush, Almost Killed Athenahealth.]

The FCC characterizes its Open Internet proposal as an attempt to determine the right policy to ensure that the Internet remains "open." But the proposal's contemplation of paid prioritization for network data traffic -- referred to as fast lanes for data -- has alarmed Internet companies and cyber liberties advocates who see paid prioritization as a threat to small Internet companies and as fundamentally anti-democratic.

The risk is that paid prioritization will turn the Internet into a protection racket. Without some regulatory restraint, large network providers such as Comcast might decide to demand extra fees from content delivery services like Netflix -- particularly from companies that compete in some way -- to ensure that their streaming video isn't degraded.  

Attempting to defuse the controversy surrounding the rule revision, Wheeler said that nothing in this Open Internet proposal authorizes paid prioritization. But then nothing in the proposal definitively rules it out.

Figure 1: Image: AOL

Reaction to the proposal promises a summer of intense lobbying and disagreement. Victoria Kaplan, lead campaign director for MoveOn.org Political Action, in a statement slammed the FCC's move to consider Wheeler's proposal, which, she said, "could destroy the Internet as we know it."

George Foote, a partner at the International law firm Dorsey & Whitney who has worked with the FCC, offered a statement to the contrary, dismissing such claims. "The FCC's proposed open internet order does not threaten the

Internet, the First Amendment, or the capitalist system," he said. "Attempts to say otherwise are merely attempts to force the order into some self-serving narrative of disaster."

Disaster for broadband providers would be to be regulated as a public utility. The FCC has said it will consider classifying broadband service as a utility under Title II of the Communications Act, a suggestion that elicited strong objections from broadband companies.

On Tuesday, 28 CEOs from major US broadband Internet companies sent a letter to the FCC urging the agency not to classify them as a common carrier utility under Title II. Doing so, they claimed, would threaten network investment, innovation, and jobs.

Yet, an article published in Vox on Monday claims that figures floated through broadband industry lobbying misrepresent network investment as rising when it actually has been falling. Dwindling investment, writer Matthew Yglesias suggests, is consistent with lack of competition, a situation described in law professor Susan Crawford's book, Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

Summarizing the book, New York Times columnist David Carr last year wrote, "Ms. Crawford argues that the airwaves, the cable systems and even access to the Internet have been overtaken by monopolists who resist innovation and chronically overcharge consumers."

It is these "monopolists" -- mainly AT&T, Comcast, Time Warner, and Verizon -- that stand to gain if the FCC accepts paid prioritization. As it happens, Wheeler spent years as a lobbyist for the National Cable Television Association and then the Cellular Telecommunications and Internet Association, before being tapped to head the FCC.

And yet Wheeler insists he wants to protect the Internet as a democratic medium. "Small companies and startups must be able to effectively reach consumers with innovative products and services and they must be protected against harmful conduct by broadband providers," he said in prepared remarks. "The prospect of a gatekeeper choosing winners and losers on the Internet is unacceptable."

Mozilla recently put forward a compromise proposal that involves distinguishing the relationship between ISPs and consumers from the relationship between ISPs and Internet companies. This latter relationship, Mozilla argues, should be subject to common carrier regulation.

In addition to deciding whether to allow paid prioritization and whether to classify broadband as a utility, the FCC also will consider whether to apply its rules to mobile broadband providers, in addition to fixed broadband providers.

Concerned individuals can see previously submitted comments and can submit their own comments about the FCC's proposal at Docket 14-28 or by emailing [email protected].

Join us at GTEC, Canada's government technology event. Over 6,000 participants attend GTEC -- Government Technology Exhibition And Conference each year to exchange ideas and advance the business of information and communications technology (ICT) in government. Don't miss thought-provoking keynotes, workshops, panels, seminars, and roundtable discussions on a comprehensive selection of ICT topics presented by leading public sector and industry experts. Register for GTEC with marketing code MPIWKGTEC and save $100 on entire event and conference passes or for a free expo pass. It happens Oct. 27 to 30 in Ottawa.