How can the FCC preserve an open Internet while gutting Net neutrality?

Chairman Tom Wheeler thinks fast-lane arrangements are not antithetical to an open Internet, but VCs and Internet giants disagree

The FCC's meeting on proposed Net neutrality rules promises to be a display of contortionism worthy of Cirque du Soleil. Chairman Tom Wheeler apparently sees no contradiction between permitting pay-for-priority agreements while purportedly defending an open Internet, but the country's venture capitalists -- not to mention more than 100 online companies including Google, Amazon, and Facebook -- beg to differ.

So does one of Wheeler's own commissioners, who on Thursday called for a delay of the scheduled May 15 vote. Commissioner Jessica Rosenworcel said she has "real concerns" about Wheeler's proposal, which "has unleashed a torrent of public response" and needs time for further input.

The FCC's expected Net neutrality ruling is already scaring venture capital firms away from media-heavy startups. They fear that if the FCC allows ISPs to charge extra fees to content providers, it will increase operational costs and make it more difficult for startups to operate on small budgets. Brad Burnham, managing partner at venture capital firm Union Square Ventures, told MIT's Technology Review that it "is absolutely part of our calculus now" that if deep-pocketed companies can pay for a faster, more reliable service, startups face a huge disadvantage.

Absent clear rules, some ISPs are testing the waters and negotiating access fees. Netflix recently agreed to pay Comcast to ensure a high quality of service, but Netflix CEO Reed Hastings then argued in a blog post the need for a strict form of Net neutrality with no such fast lanes.

"Consumers who [already] pay a lot of money for high-speed Internet" shouldn't have to suffer "high buffering rates, long wait times and poor video quality," he wrote, adding:

If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future....Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service.

Meanwhile, in a joint letter this week to the FCC, Google, Amazon, and other online giants warned of "grave consequences" if the agency fails to protect the openness of the Internet, and they urged the FCC to protect Internet users against all "blocking, discrimination, and paid prioritization." Unconvinced by former cable industry lobbyist Wheeler's assurances that the agency will look at traffic-management practices on a case-by-case basis, they wrote: "This commission should take the necessary steps to ensure that the Internet remains an open platform for speech and commerce so that America continues to lead the world in technology markets."

The issue of an open Internet resonates deeply; tens of thousands of people have sent comments to the FCC's open Internet inbox, and Senator Al Franken calls it "the free speech issue of our time." InfoWorld's Paul Venezia insists the very fate of a free society rests on enshrining the open Internet.

We have enjoyed an open Internet since its creation, but Comcast, Time Warner, Verizon, and AT&T want a closed Internet.... They want to get paid coming and going, by both content producers and content consumers, funneling all of that traffic through circuits paid for in large part by the very taxpayers who are also their customers. This isn't business, this is just bald-faced extortion and double-dealing.

InfoWorld's Andrew C. Oliver points to the regulation of railroads in the last century and argues for similarly designating ISPs as common carriers:

Net neutrality simply means that if you set up a website or online service, a Time Warner or a Comcast can't charge you extra to deliver that content to consumers or businesses connecting via their service, nor can they favor someone else's content over yours when it comes to things like delivery speed. This equitable approach has deep roots in U.S. history, going back to the early regulation of the railroads. Back then, legendary mogul John D. Rockefeller negotiated a deal with the railroads to set high rates on shipping barrels of oil but to get "rebates" whenever his own companies shipped it. The feds decided that such arrangements were illegal because the railroads were "common carriers."

However, big telecom has lobbied hard -- and successfully so far -- not to be treated as common carriers. So Mozilla this week came out with its own version of Net neutrality rules that proposes the FCC treat only some portions of broadband networks as common-carrier services. In a blog post, Mozilla Senior Policy Engineer Chris Riley suggests the FCC create separate rules for how ISPs manage traffic for end users and websites and for Web-based service providers, such as Dropbox. Mozilla's proposal, which Riley says is "grounded in a modern understanding of technology and markets," would keep broadband providers' relationship with customers as lightly regulated as it is today and might be more politically feasible since it doesn't require any changing of the current law and precedents that are out there.

The FCC is scheduled to hold an open commission meeting on May 15 to discuss its proposed rules for the Internet. There's still time to tell the FCC and your representatives in Washington to regulate the Internet service providers as common carriers. As Oliver wrote, "[E]nd the charade that is [the FCC's] 'trust us, we'll monitor for bad behavior' current proposal."

This story, "How can the FCC preserve an open Internet while gutting Net neutrality?," was originally published at Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow on Twitter.


Copyright © 2014 IDG Communications, Inc.