In December 2010, the FCC announced its new ‘net neutrality’ rules, in efforts to promote “freedom and openness” of the Internet and to prevent service providers from limiting which Internet sites and services their customers can access and controlling access speed. Proponents view this as a noble effort to maintain Internet values, but critics believe the FCC is overstepping its boundaries and that such limitations will cause broadband investment to suffer. Verizon Communications and MetroPCS Communications filed suit against the FCC in early 2011, alleging the agency had overstepped its regulatory power. Their complaints were speedily dismissed, not on merits, but because the two had brought suit too quickly, before the new rules had even been published in the Federal Register.
The new rules are now officially published, and Verizon is again challenging the FCC’s authority in regulating Internet traffic. The telecommunications giant is bringing this suit (like the previous one) in the D.C. Circuit — the same court that held in April 2010 that the FCC could not prohibit Comcast from slowing access to certain Interest sites, likely in hopes that the court will similarly limit the agency’s authority this time around. The ruling called into question the Commission’s regulatory power over Internet services and prompted analyst predictions that the FCC or Congress would adopt new rules to clearly define the agency’s power, and it looks like they were right.
Published in the Federal Register on September 23, The Commission’s new rules codify three protection principles:
“First, transparency: fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and commercial terms of their broadband services. Second, no blocking: fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services. Third, no unreasonable discrimination: fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.”
While the rules aim to provide equal access to Internet sites and services, they also establish different standards for wired (such as Comcast) and wireless (such as AT&T) service providers, giving a little more flexibility to the latter to limit access (due to the challenges of managing data traffic on the more easily overwhelmed wireless networks). The next lawsuit comes in here — Free Press, a media advocacy organization, has filed a lawsuit against the FCC claiming the wired and wireless distinction is nothing more than arbitrary. There is much criticism for the rules in general, not only for the wired/wireless distinction, but there are also accusations that the FCC has only provided vague policy still full of loopholes.
Congress itself isn’t entirely on board either. Back in April, the House voted to repeal the rules, questioning the need to further regulate the Internet and highlighting fears that limitations on broadband systems would discourage investors. Without Senate support however, the rules are still on track to go into effect on November 20.
The biggest question and concern, however, is how these new rules will effect the consumer and the Internet landscape for future innovators of Internet sites and services. It’s pretty to clear to see how prohibition on access limitation is a plus for the average web browser. But regulation could come at a price for everyone. Problems faced by services providers are legitimate from a business model perspective, and could ultimately negatively affect the consumer if there is no leeway in controlling access. Given the volume of data transfer and finite capacity of broadband systems, some connection is going to slow down somewhere for someone, providing more ground for usage-based pricing models and tiered-access packages.
Can the regulators and providers keep speeds up and prices down? There is much to be seen as the rules become effective and the lawsuits roll in.