Compromise on Net Neutrality?

Network_neutrality_poster_symbolThe FCC is considering a compromise solution to net neutrality that already is satisfying almost nobody. Both through speeches given by FCC Chairman Wheeler along with some leaked memos, it’s clear that the FCC is strongly considering a solution that falls halfway between allowing fast lane deals and in regulating ISPs as common carriers.

While nobody has seen any actual proposed rules, the industry has already reacted strongly to the proposed solution. Apparently, what the FCC has in mind is to reclassify the interactions of the ‘back-end’ Internet as common carrier business while leaving the interactions between ISPS and end users the same as they are today, which is largely unregulated.

This means that the FCC would have the ability to overlook deals between companies like Level3 and Comcast, between companies that transport and switch the Internet. One would have to assume that if this was considered as a regulated common carrier business that rules similar to the way that large carriers interact today would apply. For example, there are rules in place today for agreements between telecom carriers that dictate defined timelines for the completion of a negotiated arrangement as well as defining some broad parameters that must be followed in such agreements. The current interconnection rules have stopped a lot of the abusive practices due to the natural advantage that large carriers hold over small carriers and tends to make the negotiations open and fair to both parties.

The FCC’s compromise is said to have come from a proposal submitted by Mozilla, although to me it seems to differ a lot from that proposal. Mozilla had suggested two forms of regulation. First, they had recommended common carrier regulation between the companies that own the networks that physically carry Internet traffic, about the same as what the FCC is now considering. But Mozilla went on to also say that the FCC should regulate arrangements between ISPS and content creators like Netflix, which Mozilla called “remote delivery services”. Mozilla thought this created a back-door way for the FCC to still have some say over deals that affect the last mile between consumers and the ISPs. That part of the Mozilla proposal seems to have been left on the floor.

I’ve given this some thought all weekend and there seems to be two things that this proposal gives the FCC. First, by not reclassifying the whole Internet business as Title II the FCC is probably trying to create a solution that has a chance of withstanding legal challenge. This proposal does not drastically change the industry enough to create a fatal flaw that would inevitably reverse the decision.

But unfortunately this is still very much a proposal that favors the large ISPs. They will rant and rave and say they hate it, because that is the public relations games they must play, but they will all be pleased and they will all chalk this up as a victory. I find it unlikely that they will challenge this, because if they do then the FCC is going to be left with little option but to try for total Title II regulation of the industry under the common carrier rules.

What I dislike about this, and what the public is going to dislike after they understand it is that this still allows for ISPs to do almost anything they want to consumers. They can cook up plans that give people special pricing if they limit their content to certain providers like Facebook. The ISPs are going to be free to implement more stringent data caps or to introduce plans that charge more for certain types of content. This ruling will make it clear that the FCC has given the ISPs free reign to do whatever they want at the customer level. The ISPs have been held in check for the last years from doing anything too crazy with customers due to this impending ruling. But once this is resolved the ISPs will be free to impose almost anything on customers they want to try.

When I first saw the headlines that there was a compromise solution I had a moment of hope where I thought the FCC would declare the connection to customers as common carrier business but would leave the network connections unregulated. Such a regime would be effective because the ISPs would be free to do whatever they want, up to the point of harming the customer product.

Regulating the customer connection is the only way to protect customers. The Mozilla proposal did this through regulating what they called the ‘remote delivery service’ aspects of the customer experience, meaning that ISPs could not undertake policies that would slow down Netflix at the customer level. To me that was a compromise because it still did not necessarily regulate everything about the customer interaction. For example, DSL services offered by the phone company have always been regulated, and years ago the FCC said that telcos must provide ‘naked DSL’, meaning they must sell DSL as a standalone service without requiring that it be bundled with something else. The FCC has no such authority over cable modems or fiber networks due to the lack of regulating the customer side of the Internet.

This proposal is no safe or wise solution and it is not cutting the baby in half like was done by the wise King Solomon. This is being made to look like a compromise, but it gives the ISPs what they have always wanted, which is free reign to offer any plans they want to consumers. One only has to look at our Internet to know that the ISPs are about nothing but their own bottom line, I saw several articles last week that reminded us that the US internet product is both the slowest and most expensive product among western nations. And this ruling is not going to change that.

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