Eight questions on what the US’s new era of net neutrality really means

13 Mar 2015 | Author: | No comments yet »

Critics attack FCC as it releases new rules to protect net neutrality.

Most Americans, whether willingly or not, have likely heard the pros and cons of net neutrality—ad nauseum. If you’ve run out of magazines and are looking for some quality bathroom reading, the Federal Communications Commission has released the full text of its net neutrality rules.The FCC finally released its final 400-page plan Thursday that outlines the new internet rules and regulations approved by the five commissioners February 26.Over several years, leading lights of the Web—among them Netflix,Google and Tumblr—importuned the Obama White House to align itself with the cause of net neutrality. “Net neutrality,” like so many progressivist-y causes—climate change, health care for all—is a phrase designed to be embraced rather than understood.

Bonus points (and my condolences) if you’ve been dragged into the policy vortex so far as to invoke Title II of the nation’s Communications Act in polite, cocktail-party conversation. The length of the document, according to one senior FCC official, is to make sure that the court has enough information in front of it “if and when” the decision winds up in court. The 313-page document is now being scrutinised by an army of communications lawyers as the cable and telecoms industry considers whether – or more likely when – to sue the regulator in the hopes of overturning the new rules. Either way, the FCC’s recent 3-2 decision to deepen its day-to-day involvement in the Internet’s oversight marks a new chapter in U.S. consumers’ broadband, and particularly mobile, experience.

It means consumers will demand more and better broadband as they enjoy new Internet services, applications and content.” “This Order,” adds the agency, “implements bright line rules to ban blocking, throttling and paid prioritization (or “fast lanes”) and, for the first time, the rules fully apply to mobile.” “One thing is for sure: the Commission’s claim that it is not imposing price regulation is clearly false,” said Lawrence Spiwak, president of the Phoenix Center in Washington. “As the D.C. We are rapidly transitioning from celebrating or bemoaning the changes, into witnessing a tiresome partisan debate about the real-world consequences of Internet regulations. Circuit made clear in Verizon, the agency’s attempt at a ‘non-discrimination’ and ‘no blocking’ rule is plainly regulation at a price of ‘zero.’” Daniel Berninger, founder of “tech elders,” restated opposition to the use of Title II regulation. The rules followed a call from Barack Obama for the “strongest possible” regulations to protect net neutrality – the principle that all services and information should have equal access to the internet.

Will this sea change in US Internet policy go down in history as a win, an inconsequential whimper, or a waste of our nation’s global innovation leadership? Now that it has, all but certain is the possibility that the agency will find itself defending the controversial “power grab,” as one Republican senator called it, in court. “I still think that they have approached this in a very political way and if you look at the statements that are being made by the Republican members of the commission, this is going to be a very partisan vote and issue where it could be very bipartisan if they would have allowed a legislative process to go forward and us to work with Democrats on Capitol Hill,” Sen. With the 400 pages of the FCC’s new rules finally public today, here are eight key questions to ask: In our brave new Title II world, nobody quite knows for sure whether American consumers will be forced to spend more time staring at the dreaded loading symbol of doom.

The Order bars the kinds of tariffing, rate regulation, unbundling requirements and administrative burdens that are the hallmarks of traditional utility regulation. The FCC cited streaming video initiatives by Dish Network Corp., CBS Corp. and Time Warner Inc.’s HBO as examples of innovation that blossomed under earlier open-Internet rules. In his remarks to the commission just before the vote, Republican FCC Commissioner Ajit Pai agreed with Thune, calling the plan a “monumental shift toward government control of the Internet” and a “rapid departure” from market-oriented approaches.

Republican opponents of the rules have already called for the orders to be overturned, charging that they give too much power to the FCC and will stifle innovation. The lesson, the agency said, “is that carefully tailored rules to protect Internet openness will allow investment and innovation to continue to flourish.” The FCC has “instituted a regulatory regime change for the Internet that will lead to years of litigation, serious collateral consequences for consumers, and ongoing market uncertainty,” Brian Dietz, a spokesman for the National Cable & Telecommunications Association, said in an e-mailed statement. Rate regulation is “still a question” if the complaint process is used “in an aggressive manner,” Evercore ISI’s Head of Policy Analysis Terry Haines said in a note.

But it seems like companies that are pursuing their commercial interests including us have to arrive at something like that.” The Internet’s descent into the Washington heart of darkness is a perfect example of that famous Santayana-ism: Those who cannot remember the past are condemned to repeat it. He said the regulator was turning its back on 20-years of light regulation without justification. “We are flip-flopping for one reason and one reason alone: president Obama told us to do so,” he said. For our purposes, the personification of this forgotten wisdom would be David Karp, the 28-year-old founder of the Web’s popular blogging platform, Tumblr. Case in point: Netflix just cut a deal in Australia to ensure consumers there can stream as many TVshows and movies as they like without any data charges. But as Chile, the Netherlands, Norway and Slovenia already have ruled, it could now be argued here in the U.S. that such an approach violates the amorphous new “general Internet conduct standard,” and thus should be prohibited.

Since the commission vote, the text has undergone final edits to respond to the dissents of the two Republicans on the five-member agency led by Chairman Tom Wheeler, a Democrat. Wheeler said in his statement the rules preserve incentives for private investment while ensuring networks “are fast, fair, and open for all Americans.” Next steps include publication in the Federal Register, which sets the stage for expected lawsuits by companies that say the regulations are an unfair restriction that could lead to rate regulation. The rules prohibit fixed and wireless Internet service providers led by AT&T, Verizon Communications Inc. and Comcast from interfering with online traffic, or offering faster service in return for payment — known as fast lanes.

The company’s CFO told an investment crowd last Wednesday that Netflix made a mistake in supporting Title II and would prefer “a non-regulated solution.”And speaking of Pandora, the jury is literally out as to whether this or a future FCC will outlaw under Title II such innovative new services like T-Mobile’s Music Freedom, providing consumers streamed music without using their data plans. Hearings have been called by Representative Greg Walden, an Oregon Republican who has said the FCC action is “a mistake” that will depress investment, and Senator John Thune, a South Dakota Republican who has said the rules will discourage innovation. President Barack Obama welcomed the rules, saying they will protect innovation and “create a level playing field for the next generation of entrepreneurs.” Karp and the rest of the 20-something and 30-something Peter Pans in the app development world should find their way to the 80-something communications lawyers and lobbyists retired in Florida for a tutorial on what it’s like trying to get Washington off your back once it has climbed on. The Secretary General of the center-right European People’s Party was baffled that our nation is pursuing a path that “led Europe to fall behind in levels of investment.” An executive from investment bank Rutberg & Co. summed up the takeaway abroad in this way: “The top-line message is that Obama is regulating.”And the former chairman of Europe’s telecom association expressed chagrin at the risky precedent set for rising Internet regulation around the world, while noting the opportunity for non-U.S. companies to catch up.

Briefly, in 1987 the FCC proposed partially deregulating its ancient control of long-distance telephone rates; and it proposed allowing more competition among AT&T, other national carriers and the regional Bell operating companies, or Baby Bells. In order to encourage other governments to establish policies to protect the free exchange of ideas on an open, unrestricted Internet, we must first protect those values at home. Iowa Utilities Board (involving, among other things, the “pick and choose” rule), Justice Antonin Scalia said the 1996 act “is in many important respects a model of ambiguity or indeed even self-contradiction.” For sure. In contrast, Title II, by far one of the most cumbersome, complicated and clumsy of all regulatory frameworks ever conceived by our government is the antithesis of these values. Much has been made of the Section 201(b) authority in Title II under which the Commission may hear complaints and respond to conduct that violates our Open Internet rules.

With Facebook extending an olive branch and Netflix playing both sides on Title II, will there be mounting pressure to achieve a more rational middle ground, perhaps via Congressional action? A congressional staffer called the law “a communication lawyer’s dream.” About the only faction unabashedly cheering the FCC’s capture of the Internet is the Occupy-everything left. Along the partisan divide, the Internet providers—AT&T, Verizon,Comcast—are seen largely as part of the Republican donor base, while the new Web companies and their high-asset employees trend Democratic for reasons, they say, of social conscience. While this path is sure to finance many lawyers’ second homes in Tahoe, Cape Cod and the Hamptons, it’s hard to envision how such a “mother may I” approach doesn’t add to the uncertainty surrounding this still as-yet-unseen rule.

It is my view that the FCC’s divisive and unnecessarily politicized decision to impose utility-style regulations on the nation’s broadband infrastructure effectively pumps the brakes on an unprecedented era of American innovation. How the FCC uses (or abuses) its wide-ranging new authorities, and how Congress, the courts and consumers respond, will ultimately determine what comes next. As tempting as it would be to breathe a sigh of relief that the debate is finally over, now is the time for mobile consumers and innovators alike to truly lean in.

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