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FCC Proposal Tucks Head Up Butt and Kisses Your Net Neutrality Goodbye



Capitulation. Surrender. Submission. Pick your synonym for cowardly action and pin it on the Federal Communication Commission (FCC). Today came word that new draft Open Internet Rules will be submitted for review and a vote by the FCC commissioners. Coming after its last feeble and ill conceived attempt was shot down unceremoniously in Federal Court several months ago, the FCC has turned tail, battened down the hatches, and is seeking refuge in places the sun never shines. Cutting to the chase, the essence of the new rules proposal will allow for certain companies to purchase preferential broadband or “fast lane” access to customers. In other words, if you are flush enough to pay the piper, you can have a broader pipe. Say goodbye to Net Neutrality in any shape or form if these new rules pass.


The new rules proposal draft was reported today by the Wall St. Journal. Understand that nothing has been voted on yet as the proposal will be distributed to the FCC commissioners on Thursday prior to discussion and a vote. That said, what the WSJ is reporting about the draft proposal is that it contains language highly skewed towards big Internet interests rather than the consumer.

According to the Wall St. Journal:

The proposed rules would prevent the service providers from blocking or discriminating against specific websites, but would allow broadband providers to give some traffic preferential treatment, so long as such arrangements are available on “commercially reasonable” terms for all interested content companies. Whether the terms are commercially reasonable would be decided by the FCC on a case-by-case basis.

This breaks down to several key points that relate to your continued use of the Internet.

If an ISP like Comcast or AT&T can indeed exact payment from large providers like Netflix for better flow through that ISP to your home, it will mean that smaller and perhaps newer companies, wishing to have that same treatment, will be at a disadvantage. In the end that decreases the potential for competition.
This type of Internet toll payment will eventually filter down to consumers in the form of higher costs. Strike that. It’s actually a richer irony than that.

Currently you pay for your broadband connections over which you receive all sorts of Internet services. Some are free. Some you pay for, like Netflix. Remember you already pay your ISP to receive a service you pay Netflix for. So, Netflix decides it has to pay the ISPs for preferred service to keep you happy. Netflix has to cover the costs of those payments. To do so it raises its subscription rates for consumers. Oh, wait, that just happened, didn’t it? If these rules are voted on as presented, there is your preamble.

Some are describing these proposed FCC rules changes as creating a “fast lane” for broadband hungry services like video streaming. Consumers who want to be in that “fast lane,” will certainly see a higher cost for packages that deliver that service. And that will be on top of the rate that the high bandwidth content providers already pay. Double-dipping has never sounded so good.

Read: Mobile Broadband Connectivity Expectations or Why Broadband Should be a Public Utility

For political reasons the FCC does not wish to pull the trigger on defining the delivery of broadband as a public utility. There is fear of doing so, because those arrayed against such a move can buy the klout they need in Washington DC where money talks and voters get left out of the bargain. Those who don’t see the Internet as essential enough to be declared a public utility not only miss the point, but are denying the history of business, commerce, and the politics of money. Which is what this battle is all about.

The FCC’s new draft rules proposal is a 180 degree flip from its previous positions on these issues. In January FCC Chairman Tom Wheeler expressed dismay when a US Appeals Court struck down the Open Internet Order on the grounds that the FCC did not have the standing to regulate this type of commerce. (It would have if the Internet was a public utility.) Verizon had contested the order on first amendment free speech claims. Wheeler’s statement is below:

“I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment. We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

The FCC’s political timidity led to a lousy defense and the lousy ruling. This follow up to that court loss is akin to a basketball team deciding not to shoot the ball anymore after having bad shots constantly blocked by its opponent. Apparently some sort of new backbone has developed that led to this spineless decision to essentially cast the FCCs lot with more moneyed interests.

Here’s another Wheeler quote after AT&T’s Sponsored Data initiative was made public in January 2014.

“My attitude is: let’s take a look at what this is, let’s take a look at how it operates. And be sure be sure that if it interferes with the operation of the Internet; that if it develops into an anticompetitive practice; that if it does have some kind of preferential treatment given somewhere, then that is cause for us to intervene.”

All is not lost yet as the FCC still has to debate and then vote on these new rule changes. A vote is scheduled for May 15. Typically there is public comment allowed prior to that vote. That said, the four FCC commissioners are split along political lines (two vs two for those keeping score), with Wheeler being the deciding vote.

The bottom line is this. You’ll eventually be paying more for the Internet content you currently enjoy. Save your pennies to pay the piper. So the piper in turn can turn those pennies into lobbying fees to help extract more.

UPDATE: Responding to a furor that erupted on the Internet today over the reports chronicled in this post the FCC has issued the following statement:

“There are reports that the FCC is gutting the Open Internet rule. They are flat out wrong. Tomorrow we will circulate to the Commission a new Open Internet proposal that will restore the concepts of net neutrality consistent with the court’s ruling in January. There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted.”

Tomorrow should be an interesting day.

1 Comment

1 Comment

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