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The Stakes and FCC Options to Preserve Net Neutrality

This entry is part 3 of 5 in the seriesNET NEUTRALITY AT THE CROSSROADS Series

 


NET NEUTRALITY AT THE CROSSROADS Series offers a look into what might go down as the most important week in the life of the Internet. Part 3 in this series outlines various options before the Federal Communications Commission [FCC] to continue its promotion of Net Neutrality in the wake of recent legal developments (discussed in Part 2).


 

 

Following the U.S. Court of Appeals, D.C. Circuit ruling in Verizon v. FCC, No. 11-1355, FCC Chairman Tom Wheeler released a statement to affirm his continued support for Net Neutrality principles:

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.

Internet_map_1024
An Opte Project visualization of routing paths through a portion of the Internet. Created by Barrett Lyon, Opte Project is setting out to use visual graphics to accurately depict the expansiveness of the Internet. Source: Wikipedia Commons

The proposed rules scheduled for release by the FCC on May 15 will signal Wheeler’s level of commitment to arguably the most important policy issue during the Chairman’s tenure. 

THE STAKES…

Many analysts are anticipating the FCC will release proposed rules that will provide Internet Service Providers [ISPs] to charge edge users (i.e., content providers) for transmitting traffic along “high speed” Internet lanes. Expected to emerge on May 15, the proposed rules will likewise give ISP the power to completely block websites, effectively forcing content into premium categories. To the casual Internet user, the opposite of Net Neutrality would be tantamount to a track race where one lane is constructed with ordinary rubber, while another consists of mounds of sand. 

The easiest way to describe the implications would be to think about our postal service system. Domestic mail service is not homogeneous, but one where customers pay a premium to guarantee faster delivery. For instance, with a high fee, one can send mail via Priority Mail Express to ensure overnight delivery. The proposed pay-for-priority service would require additional charges to speed-up broadband deliver of information.

Also looming in the background of a de-regulated broadband environment is windfall profits that accrue to ISPs that hold virtual monopolies on local Internet access. Consolidation has gradually shrunk the range of choices for access across America’s metropolitan areas. Ownership de-regulation that led to merger and acquisition across the landscape of phone, satellite, and cable shifts the balance of market power to the smaller number of corporations that own these assets. The end of Net Neutrality positions these corporations to impose pricing schemes that yield larger profits for themselves, while content providers pay premiums to enjoy fast connections. 

 

From the genesis of the Internet, the FCC has protected both content providers and users from the costly imposition of paying to deliver and receive content that originates at certain servers at a higher-than-normal speed. As content providers, everyone from mom-and-pop businesses to bloggers could ensure that companies like AT&T, Verizon, Comcast, or Time Warner Cable were not discriminating one packet from another. Likewise, information consumers have enjoyed the idea of accessing various formats with relative assurance that transmissions follow some measure of consistent speed, quality, and openness (i.e., lack of blocking).

Consumer Reports [CR] notes, for instance, that large operators such as Netflix and Youtube will be able to serve smooth video, while smaller operators will be relegated to slower, lower quality offerings. CR calls into question Wheeler’s vague language used to suggest the FCC will require ISPs to offer fast lane services on “commercially reasonable” terms.

One can imagine an infinite number of scenarios where premium services ultimately lock Internet users in a “lesser evil” dilemma. Consider a commercial bank that currently offers its customers a choice of paper statements for a fee or free online banking statements. Under a future premium-based transmission regime, ISPs would be able to charge banks to deliver their Internet communications at a speed acceptable to bank customers. Those fast-lane premiums would be passed onto bank customers, leaving them in a predicament of paying ancillary fees for either paper statements or online banking.

 

Series Navigation<< A History of Net Neutrality BattlelinesPrivate: Petition: Protect the Internet by Saving Net Neutrality >>The Death of Net Neutrality: Can It Live Again? >>
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