Google Leads from Behind on Net Neutrality

1 Nov 2014 | Author: | No comments yet »

F.C.C. Considering Hybrid Regulatory Approach to Net Neutrality.

Winston Churchill quipped that the best argument against democracy is a five-minute conversation with the average voter. The Federal Communications Commission will consider new rules to ensure real consumer choice as the U.S. shifts from copper-based networks to IP networks, agency officials said Friday.If the best compromises make everyone unhappy, Federal Communication Commission Chairman Tom Wheeler and his proposals for regulating the Internet have lot going for them.

The maneuvering is yet another signal that Congress should craft neutrality rules specifically for broadband, rather than leaving the FCC to search for a way to do so under a law written before the first broadband lines reached consumers. The compromise proposal calls for splitting broadband into two different services: a largely invisible one connecting networks to one another, and the public one in which people pay to connect their homes to the Internet. In its consumer-protection proposals, which the FCC would release for public comment, the agency will consider rules for large telephone carriers that are currently required to share their last-mile networks with competitors, often to serve small-business customers.

At issue is whether to treat broadband Internet service providers as “information-service providers” or “telecommunications carriers.” According to the Wall Street Journal’s Gautham Nagesh, Wheeler may try to do both. The FCC could then regulate the back-end service under a stringent legal authority known as Title II without applying the same legal standard to the consumer-facing Internet. Like other possible solutions, it seeks to reestablish the F.C.C.’s authority to enforce net neutrality, the general concept that no Internet traffic should be discriminated against unfairly. A long, long time ago, perhaps it was reasonable to fear telephone companies might try to block voice and messaging apps like Skype and FaceTime that compete with their traditional services. Specifically, Nagesh reported that the chairman is warming to proposals floated by Mozilla and the Center for Democracy and Technology, among others, that would classify only one aspect of a broadband connection — the delivery of data from websites and services to an ISP’s customers — as a telecommunications service.

The FCC is seeking a new legal basis for rules after its earlier open-Internet regulations were voided by a court that said the agency lacked jurisdiction. But unlike policies previously considered, which treated the entire Internet ecosystem as a single universe, the hybrid proposal would establish a divide between “wholesale” and “retail” transactions. Meanwhile, the Internet access service that ISPs provide to subscribers would continue to be treated as an information service, subject to the less rigorous rules that the FCC can impose under Section 706 of the Communications Act. The retail portion, the transaction that sends data through the Internet service provider to the consumer and which allows the consumer to access any legal content on the Internet, would receive a lighter regulatory touch. To protect competition, his proposal would “ensure that small- and medium-sized businesses do not have the benefits of competition yanked away from them,” Wheeler wrote. ”The mere change of a network facility or discontinuance of a legacy service should not deprive consumers or businesses of competitive choices.

A major point of conflict would be the FCC’s reported reluctance to ban paid prioritization—the practice by which Internet providers charge content companies for access to better performance on their networks. The proposal reported in the Journal stopped short of applying the regulations to all Internet service, leaving some room for allowing paid arrangements for content delivery. Court of Appeals for the District of Columbia Circuit planted the seed for this approach in January, when it threw out most of the neutrality rules the commission had adopted in 2010.

Kerry Trainor, chief executive officer of IAC (IACI)-owned video service Vimeo, says that anything short of an outright ban on paid prioritization will effectively give Internet providers wide leeway. “If you have any system where any sort of prioritization is subject to review, you have a system where you have to resort to litigation,” he says. Some public interest groups were critical of the “hybrid” nature. “Such an untested, too-clever-by-half approach is bad law and a bad idea,” Craig Aaron, president of the policy group Free Press that backs using Title II, said in a statement. “It will not survive in court.” First the proposal needs to gain a majority vote at the five-member agency where he is part of the Democratic majority. The traditional copper-based telephone network supplies power to connected telephones, but phones connected to fiber-based networks need their own power source.

If Vimeo had to challenge Verizon (VZ) or Comcast (CMCSA) on the issue, he says, Vimeo would simply be outgunned by the amount of legal muscle the giant ISPs can flex. FCC Republicans have opposed new rules. “I don’t think it’s a done deal,” Robert McDowell, a former Republican FCC commissioner, said in an interview. “This is still a dialog that is entering its final stages.” “The chairman has said that all Title II options are under serious consideration,” Kim Hart, an FCC spokeswoman, said in an e-mailed statement today. A formal proposal could come as soon as next month, although people close to the discussions say that Tom Wheeler, the chairman, has suggested privately recently that the action might be pushed to the first quarter of next year. Tatel, broadband ISPs provide two services: one to their subscribers, which connects them to whatever site or service they choose, and another to sites and services, connecting them to the ISP’s customers. It published a white paper saying that there is no technical distinction between the two types of Internet service, and the idea wouldn’t make it through the courts.

Critics of such an approach say it would discourage investment and slow the type of technological advances that have fueled the growth of online systems. We’re having today’s anachronistic debate for two reasons only: The molasses-like speed of the legal process, still dealing with failed FCC efforts to codify net neut rules a decade ago. The agency has tracked an “unprecedented” number of large-scale 911 service outages this year, not due to storms or disasters, but to software and other technology errors. Jeff Eisenach, the head of the American Enterprise Institute’s center for technology policy, argues that the entire idea was incoherent. “Proposing to regulate half the Internet is like proposing to pollute half a river,” he says. The second reason is the unique situation of Netflix, which generates a whopping one-third of peak Web traffic and implicitly sets the investment agenda of the downstream consumer broadband industry.

In April, a software coding error at a large 911 routing center knocked out service to more than 11 million residents of seven states, including California, Minnesota and Florida, for up to six hours. But second he said such rules couldn’t require ISPs to “offer service indiscriminately and on general terms,” but rather had to allow room for case-by-case evaluation.

Paid prioritization, where a content provider pays for a fast lane to consumers, would be restricted unless it could be proved to be just and reasonable. Google, along with just about every big tech company except Netflix, is a member of the Information Technology Industry Council, which filed comments with the FCC calling for “a light-touch regulatory framework rather than a heavily regulatory common-carriage framework.” Google knows that Title II would cast a pall over broadband investment. That wouldn’t be a huge leap from the 2010 rules, which allowed ISPs to create managed services (such as pay-TV channels) separate from their broadband Internet offerings.

Those possibilities, however, have been judged by a growing consensus of F.C.C. members to either limit the agency’s flexibility or to be vulnerable to criticism and potentially unsupportable in court. Add the fact that Google itself is a broadband suppler through its Google Fiber affiliate, plus has ambitions to be a wireless distributor using high altitude balloons, underutilized TV spectrum and other novel approaches. Some say Google has been scared into silence in the current debate by memories of the name-calling back in 2010, when Google crafted a net neut compromise with arch villain Verizon that was widely praised except by liberal mau-mau groups. And this approach will only serve to squander the political support of millions and millions of Americans who have weighed in at the agency asking for strong rules that will stand up in court.” Public Knowledge, another consumer group, had kinder words for the policy. “Although there are many details that do not appear to have been worked out,” said Gene Kimmelman, the group’s president, “we are confident that the proposal they’re considering could use Title II and other regulatory tools in a manner that effectively addresses the most important issues in the debate.” Mr.

A telecom lawyer who has worked with Google in the past offers a simpler theory: Title II has become a holy fetish among “the cool kids,” and Google is afraid of being seen as uncool. The only things that have changed since then are the broadband connections have become ubiquitous, and so have bandwidth-hogging video streams from the likes of Netflix, Vudu and Hulu. But as long as Google and others refuse to state forcefully what they know and understand about how net neut politics is morphing into regulatory overkill, the rest of us will have to worry, in the words of Frank Louthan of the Raymond James brokerage, that “the ongoing debate over how to ruin the Internet just will not die.” Lawmakers designed the 1996 act to encourage vigorous competition in all forms of communications, envisioning a host of new phone and video services coming to market. It’s conceivable that mobile and fixed wireless networks could emerge as effective competitors to cable modems and DSL services, but they’re not there yet — and they won’t be as along as mobile operators continue to impose strict limits on data usage.

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