FCC's Net Neutrality Rules Draw Faint Praise, Fire

The Federal Communications Commission's decision to enforce net neutrality has already drawn fire from some in the telecommunications industry, and even supporters of the principle were not completely happy with the Commission's new rules.

Net neutrality is the concept that any traffic on the Internet gets treated the same way and is transmitted on a first-come, first-serve basis. The idea is to prevent companies from favoring one providers' content over another. Landline phone calls, for example, operate under a net neutrality principle -- nobody expects their phone call to be slower or of worse quality if it goes to or from a certain place, or if it is on a certain provider.

Under the new rules, communications companies have to be open about their network management protocols, cannot block any lawful communications, content, applications or services, nor can they unreasonably discriminate against content providers, competing or otherwise.

But what constitutes unreasonable hasn't been defined yet. And the Internet service providers -- the communications companies, largely -- have a certain amount of flexibility, as the FCC gave its approval, at least for the time being, of tiered pricing plans in which customers pay more for greater capacity. That leaves wireless providers with more leeway than the wireline providers, since they have been experimenting with tiered pricing for the last few months.

Verizon's executive vice president of public affairs, policy and communications, Tom Tauke, said that while Verizon agrees with the FCC that the Internet should be an open forum, it is not comfortable with the authority the FCC says it has.

Based on today's announcement, the FCC appears to assert broad authority for sweeping new regulation of broadband wireline and wireless networks and the Internet itself. This assertion of authority without solid statutory underpinnings will yield continued uncertainty for industry, innovators, and investors. In the long run, that is harmful to consumers and the nation, Tauke said in his statement.

At Free Press, a media reform organization, Managing Director Craig Aaron support for real net neutrality, instead moving forward with industry-written rules that will for the first time in Internet history allow discrimination online, he said in a statement.

Aaron was especially distressed by the lack of robust protections for users of mobile devices. No longer can you get to the same Internet via your mobile device as you can via your laptop. The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications, he said.

Even though the FCC approved new rules, they haven't been made public yet and will not be for some days yet. Meanwhile, a fight is brewing in Congress over how much statutory authority the FCC has.

The FCC can claim it has the power to regulate the Internet service providers because part of its mandate under the 1996 telecommunications act is to encourage deployment of advanced telecommunications. The FCC could argue that promoting net neutrality encourages more diverse content and hence more investment. The FCC could also assert its authority over voice over Internet protocol calls, as well as its mandate to manage spectrum resources in the U.S.

More conservative thinkers, especially those in the GOP (and two of the Commissioners, Robert McDowell and Meredith Attwell Baker) say the Internet has functioned well without much regulation at all, and that the FCC is overreaching.

Hemanshu Nigam, founder of SSP Blue, a consulting firm for ISPs and web site operators, said a lesser-known positive from the new rules is allowing network providers to police copyright violations, as well as a bit more regualatory certainty because all traffic will be treated equally. By allowing greater protection for content creators, the FCC makes them more comfortable with providing options for access online.

Nigam said he is optimistic that a proper balance will be reached. He noted that such battles occur regularly. This is just step one, he said. The FCC is saying we're going to keep our mind open.

Ultimately, he thinks that as the tug-of-war between the FCC, service providers and Congress takes shape, much of the rhetoric will get less intense. The real debate is who should be policing what, Nigam said.