Federal Communications Commission (FCC) chairman Tom Wheeler will today present his proposals for net neutrality – which reportedly include the provision that content firms should in some cases be allowed to pay for faster access to customers’ homes.
According to reports, companies such as Netflix or Disney would be allowed to strike deals with service providers such as AT&T, Comcast or Verizon guaranteeing faster access for their services. Internet service providers would not, though, be able to block or slow down access for others, and would be required to give more information about their service speeds on the last mile to the customer’s home.
A new set of rules is required following a court decision in January striking down the previous version. The court said that internet service providers couldn’t be regulated in the same way as telecommunications service providers – indeed, the FCC had categorized them separately itself.
Many public interest groups have been calling for the FCC to simply redesignate internet service providers as public utilities like telecommunications service providers.
However, the FCC has previously said that it would instead consider evaluating fast-lane deals on a case-by-case basis under Section 706 of the Telecommunications Act of 1996, making sure that they’re commercially reasonable.
If the reports are accurate, the new proposal is something of a surprise, given the FCC’s previous stance on the issue: that all content providers should be operating on a level playing field, with users receiving equal access to all services. While Wheeler has denied that the FCC is engaged in a “turnaround in policy”, allowing commercially reasonable discrimination would be very different from not allowing discrimination at all.
“The very essence of a ‘commercial reasonableness’ standard is discrimination,” says Michael Weinberg, vice president at campaign group Public Knowledge. “And the core of net neutrality is non-discrimination. This is not net neutrality.”
While something may be commercially reasonable, he says, this doesn’t mean it is good for the market. He points out that when the same standard was applied for wireless data roaming, the FCC concluded that it was commercially reasonable for a broadband ISP to charge an edge provider higher rates on the grounds that its service was competitively threatening.
“It is hard to see how the commercial reasonableness standard, which inherently offers less protection than the standard in the previous Open Internet Rules, can serve the same policy goals,” he says.
“Additionally, approaching discrimination on a case-by-case basis creates less certainty than clear rules, and disadvantages small businesses and entrepreneurs.”
Free Press goes even further, describing the move as a proposal for a “payola internet”.
“The FCC apparently doesn’t realize the dangerous incentives these rules would create. The routing of data on the internet is a zero-sum game. Unless there is continual congestion, no website would pay for priority treatment,” says president and CEO Craig Aaron.
“This means the FCC’s proposed rules will actually produce a strong incentive for ISPs to create congestion through artificial scarcity. Not only would this outcome run counter to the FCC’s broader goals, it actually undermines the so-called Section 706 legal basis for these rules.”
The proposals would be good news for large companies such as Netflix or Google – and for broadband providers, which would be able to raise extra revenues from prime customers. But start-ups could have great difficulty getting their services off the ground. This has been a concern for the Obama administration, which in February issued a statement warning that: “Absent net neutrality, the internet could turn into a high-priced private toll road that would be inaccessible to the next generation of visionaries.”
The new proposals will be released today to the FCC’s other four commissioners, and will be opened for public comment on May 15. The commission will take a vote by the end of the year.