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Is net neutrality dying? Has the FCC killed it? What comes next? Here’s what you need to know

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24 April 2014, 9:16 pm by: Mathew Ingram

The issue of net neutrality is back in the news again, thanks to some proposed rule changes by the Federal Communications Commission, changes that the regulator says are aimed at protecting a “free and open internet.” A chorus of critics, however, say the commission is trying to eat its cake and have it too — by pretending to create rules that will protect net-neutrality, while actually implementing what amounts to a pay-to-play version of the internet, one that favors large incumbents.

It’s a complicated topic, and one that is prone to a certain amount of hysteria and hyperbole. So what follows is a breakdown of what you need to know, and what some legal experts, technology insiders and advocacy groups are saying about it:

Why is the FCC changing its rules?

The regulator’s ability to monitor and punish breaches of net neutrality was thrown into limbo by a court ruling in January, which said that the commission didn’t have the authority to crack down on certain kinds of behavior because it hadn’t defined cable networks as “common carriers,” the way phone networks are. Since that ruling, the FCC has been trying to find a way to repair those abilities.

The commission has said that it remains committed to upholding the principles of net neutrality, and that under the new rules “behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted,” but others have a less charitable view of what it is up to, and say it is betraying the promises President Obama made to uphold net neutrality.

Time for Silicon Valley donators to @BarackObama to withhold their donations and demand a clear defense of net neutrality— Om Malik (@om) April 24, 2014

Why are the changes controversial?

According to a report in the Wall Street Journal on Thursday, among the changes that the FCC is considering are rules that would permit networks and carriers to create “fast lanes,” in which certain content providers who pay for the privilege are given preferential treatment. This, many critics argue — including our own Stacey Higginbotham — would be a direct violation of the principle of net neutrality that the FCC is supposed to be upholding.

In a post at the New Yorker site, Tim Wu — the Columbia Law School professor who is credited with inventing the term “net neutrality” — said that the kinds of loopholes the FCC appears to be considering are exactly what cable providers have wanted for a decade or more: namely, the right to speed up or slow down certain kinds of traffic. But the outcome could be disastrous, he says:

“This is what one might call a net-discrimination rule, and, if enacted, it will profoundly change the Internet as a platform for free speech and small-scale innovation. It threatens to make the Internet just like everything else in American society: unequal in a way that deeply threatens our long-term prosperity.”

Veteran technology writer Dan Gillmor says that the FCC is trying to “axe murder” net neutrality, and that while pretending to fix the problem it is “actually letting it get worse, by providing a so-called ‘fast lane’ for carriers to hike fees on sites trying to reach customers like you and me.” Gillmor called the FCC’s moves “a potentially tragic turning point in American politics.” Instapaper creator Marco Arment said:

“This is not building anything new — it’s discriminating and restricting what we already have. This is not making anything faster — it’s allowing ISPs to selectively slow down traffic that they don’t strategically or financially benefit from, and only permit traffic from their partners to run at the speeds that everything runs at today.”

In the WSJ story, BitTorrent CEO Eric Klinker says that “For technologists and entrepreneurs alike this is a worst-case scenario. Creating a fast lane for those that can afford it is by its very definition discrimination.”

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What does the FCC think it is doing?

In response to the stories in the Wall Street Journal and New York Times, FCC chairman Tom Wheeler published a statement that said the reports about the regulator’s plans were filled with “misinformation.” Wheeler said that under the new rules, the commission would continue to ensure that ISPs and networks “do not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

For at least some critics of the commission’s approach, this statement still leaves holes you could drive a fleet of cable trucks through — including the definition of what is “commercially unreasonable,” and the question of whether the regulator will care if a network or provider favors certain kinds of traffic, provided that traffic doesn’t come from an “affiliated entity.” As Stacey put it, the FCC might not want to kill net neutrality, but it might end up doing so anyway.

“Whether or not you think this is a good idea, inserting any sort of commercial relationship into delivering last mile web content – outside of what the end-consumer pays the ISP — is not network neutrality. So let’s stop calling it that. The FCC should man up and say exactly what it is doing here: It is implementing a double-sided market for the internet that could allow businesses to enter into commercial relationships with ISPs — who do not operate in a competitive market in the U.S. — for faster delivery of their content”

What is net neutrality?

Net neutrality is a principle which states that networks should not discriminate when it comes to the content that flows through their pipes — that they should not give certain kinds of content or certain providers preferential treatment in return for money. In other words, one bit should be treated like any other bit. As former Wired writer Ryan Singel put it in explanatory piece at Medium:

“Net Neutrality is the simple concept that the company that provides you internet access on your phone and at your house should be a utility — like a phone company. It should deliver you the information you ask for at the speed you are promised without playing favorites or blocking or degrading services.”

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Why is net neutrality important?

Technology-industry advocates and open web supporters argue that if networks start to charge content providers for special treatment, then only those who can afford to pay these extra charges will be able to reach the end user. That would be fine for existing content companies, but could disadvantage smaller competitors and thus lead to a decline in internet-related innovation. As Stacey says:

“The idea that we would let ISPs make decisions that could lead to ISPs setting commercial terms that would impose taxes on startups and existing companies all without ensuring any sort of lowered price for consumers or network upgrades from the ISPs, is ridiculous. Broadband networks are not a public utility, but they are the foundation for our economy.”

One recent example of a deal that caused a lot of consternation among net neutrality advocates is the one that Netflix cut with Comcast, which gave Netflix preferential access to Comcast’s customers. Although this deal is actually more about what the industry calls “peering arrangements” than it is about true net neutrality, it brings up many of the same issues around discriminatory access to content. In a statement it posted on its website Thursday, Netflix said:

“In sum, Comcast is not charging Netflix for transit service. It is charging Netflix for access to its subscribers. Comcast also charges its subscribers for access to Internet content providers like Netflix. In this way, Comcast is double dipping by getting both its subscribers and Internet content providers to pay for access to each other.”

In a response, Comcast suggested that Netflix’s argument was disingenuous, and that the content company itself chose to make the deal with Comcast willingly in order to “improve its business model.” The cable network said that it remains committed to an open internet, and supports “appropriate FCC rules” to ensure consumers’ access to the internet is protected “in a legally enforceable way.”

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What should the FCC do?

Net neutrality advocates argue that the simplest and most effective route for the regulator to take is to declare unilaterally that cable networks like Comcast are “common carriers” in the same way that phone networks are, a door that the January court decision left open to it. Under that system, networks would be more like utilities than anything else — dedicated to carrying content without discriminating between different types. As Ryan Singel puts it:

“The FCC has a very simple way to create simple, fair and enforceable rules to protect innovation, free speech and commerce. It lacks the courage and (perhaps) political capital to re-grant itself this power. Lacking this power, [it] is relying on a small loophole given to it by the courts [and] that loophole requires the FCC to allow Verizon, Comcast and AT&T to create slow and fast lanes. The FCC wants to call this ‘net neutrality.’ It’s nothing of the sort and the proposal needs to be killed. It’s a bargain that will kill innovation on the net.”

Some critics of this kind of move, including Andreessen Horowitz founder Marc Andreessen, have argued that turning cable networks into utilities could make them less likely to devote the kind of resources to improving the internet, and that this kind of investment is required if we are to have the kind of broadband innovation America needs to support its economic future.

What happens next?

The FCC’s proposed changes will be opened up for comment and then voted on, and then the regulator will enshrine some or all of them in legislation — and hope that what it has implemented doesn’t run afoul of the law, the way the previous version did. As Stacey describes it:

“The agency’s hope is to have new rules in place by the end of this year, and it plans to release a public document called a Notice of Proposed Rule Making (NPRM) outlining its thinking and asking questions about the new rules. It plans to release this NPRM in three weeks at its May 15 open meeting. Once the documents are released, the public will have a chance to comment on them.”

Sanders on Net Neutrality: sanders.senate.gov/newsroom/press… #FCC http://t.co/FBe9X3xvgs— Bernie Sanders (@SenSanders) April 24, 2014

In the meantime, lobby groups dedicated to the open internet and net neutrality will be mounting a campaign aimed at convincing legislators that they need to take action to ensure that net neutrality remains in force. Craig Aaron of the non-profit advocacy group Free Press said in a post that such pay-for-priority schemes “would be a disaster for startups, nonprofits, independent content creators and everyday Internet users who wouldn’t be able to pay these unnecessary tolls. And the stifling of future competitors and disruptive innovators would be a fringe benefit for the big ISPs as they line their pockets.”

Todd O’Boyle of Common Cause’s Media and Democracy Reform Initiative, told the New York Times that “If it goes forward, this capitulation will represent Washington at its worst. Americans were promised, and deserve, an Internet that is free of toll roads, fast lanes and censorship — corporate or governmental.” The Electronic Frontier Foundation said that a pay-to-play model would be “profoundly dangerous for competition. New innovators often cannot afford to pay to reach consumers at the same speeds as well-established web companies [and] that means ISPs could effectively become gatekeepers to their subscribers.”

Post and thumbnail images courtesy of Thinkstock/ Chuyu

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