No Jitter is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Net Neutrality Matters

You have read about the FCC and Net Neutrality. The FCC wants to have more control over broadband services, which will define the rules for broadband providers. The broadband providers are attempting to stop this action by, among other things, threatening to reduce their broadband investment, which they say will also cost jobs in the industry.

So why is Net Neutrality important? Net Neutrality and the FCC's Broadband plan are connected; broadband regulation affects Net Neutrality. The FCC Broadband Plan took into account over 100 comments made to the FCC concerning the future of broadband access and its control and regulation. It is a plan, not a ruling or legislation. The plan calls for a 10-year effort to expand broadband access to nearly everyone in the U.S.

To date, we have effectively been operating with the Net Neutrality philosophy. It wasn't until providers like Comcast started to impose restrictions on traffic flow that Net Neutrality really surfaced as an issue, and a concept that the carriers wanted to challenge. The FCC ruling against Comcast's practices was struck down by a Federal court, so the FCC is looking into other ways of increasing its broadband control in order to retain Net Neutrality. Net Neutrality benefits end users and content providers, but is opposed by the carriers that connect these two constituencies.

Net Neutrality will make managing the traffic more difficult for the providers. A major challenge to the FCC and Internet users is the service providers' insistence that they alone are the arbiters of how and when traffic is carried over their networks. Another problem is the application of Net Neutrality rules to wireless services.

The FCC could retain authority over broadband by reclassifying it, from an information service to a carrier service. However, the FCC is also considering adopting a "third way" alternative to such reclassification. This "third way" would be light control over the broadband providers without classifying them as a carrier, but still preserving Net Neutrality.

It is not clear what the FCC will be able to do, since Congress is preparing to weigh in on the issue and may prevent any solution.

Defining Broadband
The very definition of broadband could potentially be changing. The FCC definition of broadband can found at "What’s Broadband". The FCC definition for broadband is any Internet service that has a speed of at least 200 kbps in one direction, which rules out dialup connections and older wireless services. This definition may be changed in the future, however; the FCC is asking for comments, and many of the initial comments recommend raising the defined minimum broadband speed to at least 768 kbps.

Many in the industry believe that even 768 kbps is too slow a speed to define as broadband, because most experiences with video, music and picture files really need higher speeds. If the broadband speed definition is raised only to 768 kbps, then 2G wireless networks are still too slow and many 3G connections would probably not meet the broadband definition. The wireless networks of AT&T, Verizon and Sprint may not meet the broadband definition if the minimum broadband speed is raised.

Defining Net Neutrality
The FCC has been operating under four principles, which are necessary but not sufficient to curb the practices of the Internet service providers. FCC chairman Julius Genachowski summarized the four existing principles as:

Network operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

His new fifth and sixth principles are:

The fifth principle is one of non-discrimination--stating that broadband providers cannot discriminate against particular Internet content or applications. This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider. The sixth principle is a transparency principle--stating that providers of broadband Internet access must be transparent about their network management practices. Why does the FCC need to adopt this principle? The Internet evolved through open standards. It was conceived as a tool whose user manual would be free and available to all. But new network management practices and technologies challenge this original understanding.

Another point made by the FCC chairman is that the choice of access technology, i.e., wired vs. wireless, should not affect the six principles. This is especially important since so many wireless devices, smartphones and data cards are currently used for Internet access. The wireless carriers are opposed to this direction.

Court Decision on Broadband Regulation/Net Neutrality
On April 6, 2010, the FCC lost its case against Comcast. The ruling undermines the FCC's authority to regulate ISPs and therefore to retain broadband control and regulation. If the FCC is not in the picture, then who is in charge of broadband--the ISPs?

To review the court case: The U.S. of Appeals for the District of Columbia, in a 3-0 decision, stated that the FCC did not have the authority to require Comcast to treat all ISP traffic equally. The court said that the FCC "failed to justify exercising jurisdiction" when the FCC ruled against Comcast, which had been blocking peer-to-peer sharing traffic from BitTorrent.

The court's focus was on broadband services. Broadband services are in a different category compared to telephone, wireless and cable transmission. Part of the court opinion stated "The Commission may exercise this 'ancillary' authority only if it demonstrates that its action...is reasonably ancillary to the...effective performance of its statutorily mandated responsibilities." According to the court, the FCC did not meet that requirement.

This outcome will have a profound influence on the next actions of the FCC. Net Neutrality is at stake. It appears that the FCC would have to reclassify broadband service as a common carrier service in order to obtain the desired authority.

The court ruling also places the FCC's authority in question as it relates to the $8 million federal phone (Universal Service Fund) subsidy to provide broadband for rural areas of the U.S.

If the FCC does not obtain authority over broadband and ISP services, then the ISPs can do whatever they want in pricing, traffic management, content delivery and access speeds. An example could be that Comcast might block traffic from web sites that provide competing video services, such as Hulu and Netflix.

An FCC spokesperson responded to the court decision:

The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans. It will rest these policies--all of which will be designed to foster innovation and investment while protecting and empowering consumers--on a solid legal foundation. Today's court decision invalidated the prior Commission's approach to preserving an open Internet. But the Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.

Public interest groups did not like the court decision. One commented that the Comcast decision will drive the FCC to seek tighter regulation, most of which will not be favorable to the ISPs. Comcast may have actually accelerated at least the effort by some to enact more broadband regulation.

The FCC
Even before the Comcast court ruling, the FCC had issued a rulemaking document, "In the Matter of Preserving the Open Internet Broadband Industry Practices" on October 22, 2009. The document solicited comments from the public on drafting rules to preserve an open Internet. The Introduction and Executive Summary of this document are worth reading to understand the position of the FCC.

Since receiving the public comments in March 2010, the FCC is proposing to create a middle ground (Third Way) on Net Neutrality by working out a deal with ISPs about how it will regulate what is carried over their networks. The thrust of the deal is that the FCC would not make major changes in how it regulates the Internet--the FCC would still have the authority to enforce Net Neutrality rules. The rules would prevent service providers from throttling down the speed of a subscriber's connection or blocking bandwidth-hungry applications.

Net Neutrality in Other Countries
To get a sense of how other countries are dealing with this issue, consider a report, "Next Generation Connectivity: A review of broadband Internet transactions and policy from around the world" produced by the Berkman Center for Internet and Society at Harvard University.

The question of ISP traffic management, which affects Net Neutrality, has already been tackled in Canada. The Canadian Radio-television and Telecommunications Commission (CRTC) allows limited traffic management by the ISPs. There are two qualifiers for the traffic management: First, the traffic management policies must be neutral and not preferential. Second, the traffic management policies must be clearly stated for consumers and wholesale buyers. The Canadian rules only apply to wireline service. Wireless service may be included in the future.

The Service Providers' Positions
The service providers have commented on the broadband plan contents. An article in the Washington Post published on March 25, 2010 provides some insight into the positions of Verizon and AT&T on this subject:

Tom Tauke, Verizon's top lobbyist, urged lawmakers to rethink the way the government oversees broadband, arguing that the FCC should shift to more of an enforcement role--like that of the Federal Trade Commission -- from its current status as a rule-making body.

"In my view, the current statute is badly out of date. Now is the time to focus on updating the law affecting the Internet," Tauke said in a speech before a tech policy forum in Washington. "To fulfill broadband's potential, it's time for Congress to take a fresh look at our nation's communications policy framework."

Tauke's comments echo recent questions raised about the FCC's jurisdiction over Internet services. Currently, the agency says it can oversee broadband providers as part of its supervision of other communications services. However, that power has been tested by a lawsuit filed against the FCC by cable giant Comcast that is before a federal appeals court.

"In my view, the current statute is badly out of date. Now is the time to focus on updating the law affecting the Internet," Tauke said in a speech before a tech policy forum in Washington. "To fulfill broadband's potential, it's time for Congress to take a fresh look at our nation's communications policy framework."

Tauke's comments echo recent questions raised about the FCC's jurisdiction over Internet services. Currently, the agency says it can oversee broadband providers as part of its supervision of other communications services. However, that power has been tested by a lawsuit filed against the FCC by cable giant Comcast that is before a federal appeals court.

AT&T has also voiced its opinion that Congress, not the FCC, determines the laws for Internet oversight. A senior vice president of AT&T, Jim Cicconi, is quoted in the Washington Post article as stating:

If there are any questions about the authority of the FCC in the Internet ecosystem, the proper answer is not for the FCC to get adventurous in interpreting its authority, as some are urging.

The Politics of Net Neutrality
Some providers are very much against regulation. So are some politicians. The ISPs say there is no problem here to worry about. My thought is that regulation seems to come after the abuse is obvious. Should we wait for the abuse? Is it already here now? Senator John Kerry (D-Mass.) noted,

To whatever degree people were alleging that this was a solution [regulation] in search of a problem, it has found its problem. As you work at home or on the road, how frustrating will it be when your large up- or download is either significantly delayed or blocked? What about the emerging voice, video and web conferences, will they work acceptably?

The threat by the broadband providers is that if the FCC gains regulation, then the providers will reduce their investments in broadband services. I doubt this (the services are too profitable), except for low income and rural areas. However, conservative groups such as the Cato Institute applauded the court's decision in favor of Comcast. Cato believes that this technology issue will have little traction with the technologically challenged members Congress and the Senate.

Senator John McCain opposes Net Neutrality rules that would extend to wireless carriers. He issued a press release stating:

The wireless industry exploded over the past twenty years due to limited government regulation. Wireless carriers invested $100 billion in infrastructure and development over the past three years which has led to faster networks, more competitors in the marketplace and lower prices compared to any other country. Meanwhile, wired telephones and networks have become a slow dying breed as they are mired in state and Federal regulations, universal service contribution requirements and limitations on use.

The Congressional reaction to the "third way" option has been mixed, with support mostly from Democrats. Congressman Henry Waxman of California and Senator Jay Rockefeller of West Virginia, of their respective chambers’ Commerce Committees, sent a letter to the FCC chairman asking the commission

to use all of its existing authority to protect consumers and pursue the broad objectives of the National Broadband Plan.... This includes a change in classification, provided that doing so entails a light regulatory touch, with appropriate use of forbearance authority.

249 of the 435 House members and 37 Senators--mostly Republicans--opposed the "third way." Congressman Cliff Stearns (R-FL) of the House Communications, Technology, and the Internet Subcommittee, has introduced the Internet Investment, Innovation, and Competition Preservation Act. This bill

would require the FCC to conduct a rigorous market analysis before mandating new network regulations. The FCC would need to prove that regulations are necessary and that there is a market failure that warrants regulatory intervention. In addition, it outlines the steps the FCC should take in completing this analysis. Also, the FCC would have to report the findings to Congress.

The FCC has three Democrats and two Republicans. The Republican Commissioner Meredith A. Baker agrees with the ISPs. She cast a dissenting vote on increased regulation for ISPs at a recent meeting because:

Opening a proceeding creates so much regulatory uncertainty that it harms incentives for investment in broadband infrastructure and makes providers and investors alike think twice about moving forward with network investments under this dark regulatory cloud. This outcome can only harm consumers who need better, faster and more ubiquitous broadband today.

How Will the Outcome Affect You?
So what does this have to do with Net Neutrality? If the FCC has the regulatory power over the Internet, then the FCC's goals for Net Neutrality will move forward. If the FCC does not have the authority, then the service providers will have open season on the operation of the Internet and will pursue operations that most benefit them and not the customer. Not only will we have a more confusing set of broadband offers, the customer will have a harder time comparing providers. There will be more fees, traffic limitations, traffic management practices that force poor quality of service on heavy users, and even possibly limited or closed access to content sites.

ISPs have advertised an all-you-can-use bandwidth model. But unlimited access may disappear without Net Neutrality rules. A new model could surface that behaves like an electrical utility charge structure. The more you use, the more you pay. This would affect everyone's budget and probably discourage ISP usage and website access. This would produce a burden on the users to manage their usage to avoid excessive charges.

ISPs have advertised an all-you-can-use bandwidth model. But unlimited access may disappear without Net Neutrality rules. A new model could surface that behaves like an electrical utility charge structure. The more you use, the more you pay. This would affect everyone's budget and probably discourage ISP usage and website access. This would produce a burden on the users to manage their usage to avoid excessive charges.

The possible scenarios if Net Neutrality is not enforced are:

* Consumers could have their access to web sites slowed, disconnected or blocked if the site producer does not pay an extra fee.

* Content providers could pay extra to have their content accelerated over broadband connections, providing an advantage over their competitors.

* During high traffic periods, broadband providers could discriminate against web sites to control and manage traffic.

* Free content access could be reduced by the ISPs by charging heavy fees.

* It is possible that an ISP could censor content. The AT&T ISP Acceptable Use Policy already has a clause that they can terminate service if they do not like comments about them.

* Even though Google is connected to one ISP, another ISP would be able to charge Google for traffic that traverses that second ISP's network.

* There will probably be a number of different and confusing access plans, some with caps on the amount of content a user sends and receives. Some trials of this nature add the total megabytes in both directions to determine the cap.

* Some ISPs will offer free or discounted services to non-profit and educational institutions to get good press while charging everyone else higher fees.

* Comcast is buying NBC. Comcast could refuse to send the NBC content to subscribers of other ISP services.

Looking Ahead
FCC chairman Genachowski cited three compelling reasons that the FCC and Congress should support an open Internet:

1. There is limited competition among the few large service providers.

2. The economic incentives of the service providers depend on voice and/or cable TV revenue. Therefore the profit motives of the providers may conflict with the best interests of the consumers in choices and completion.

3. The explosion of Internet traffic and high bandwidth applications is causing the traffic to nearly double every two years.

This then means that the rulemaking process has to begin. This will entail circulating the rules as prepared by the FCC staff. A notice of rulemaking will be issued for public comment. You can bet that Comcast and most of the other service providers will be very visible at the FCC meetings.

Genachowski’s comments summarized his intentions.

Some have argued that the FCC should not take affirmative steps to protect the Internet's openness. Let me be clear about what this is about, and what it isn't.

The fundamental goal of what I've outlined...is preserving the openness and freedom of the Internet. We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth and a foundation for democracy in the 21st century. We have an obligation to ensure that the Internet remains a vast landscape of innovation and opportunity. This is not about government regulation of the Internet. It's about fair rules of the road for companies that control access to the Internet. We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.

The fundamental goal of what I've outlined...is preserving the openness and freedom of the Internet. We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth and a foundation for democracy in the 21st century. We have an obligation to ensure that the Internet remains a vast landscape of innovation and opportunity. This is not about government regulation of the Internet. It's about fair rules of the road for companies that control access to the Internet. We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.

Independently, the Telecommunications Act of 1996 may be up for modification. The Congress tried to update the Act in 2006, but it was defeated because it did not contain clauses supporting Net Neutrality.

The FCC recently voted, 3 to 2, to open up a discussion on reclassifying broadband as a Title II common-carrier service. The FCC offered three options:

* continue with the current rule that broadband is an information service;
* reclassify broadband to adhere to Title II's rules; or
* classify broadband as a Title II service but "forbear" from a number of Title II's provisions, a likely compromise.

The FCC vote, offering the three options begins a formal period of public comment on the proposal to overturn a previous commission ruling. This previous ruling classified broadband transmission as an information service, which means very light regulation.

The FCC proposal would designate broadband transmission as a telecommunications service. This would make it subject to stricter regulation similar to the regulation of telephone service.

In response to this FCC vote, the Broadband Internet Technical Advisory Group (BITAG or TAG) was formed by ISPs and vendors of IP technologies to develop best practices for network management.

Without reclassification as a common carrier, the FCC could find itself continually in court. Every time a broadband/ISP provider does not like the FCC decision, they will go to court. The FCC, based on this recent decision, would probably lose the court cases.

If the FCC does reclassify broadband services as a common carrier service, there will be further court challenges. Some in Congress will put forward bills that would prevent the reclassification of the broadband services.

The FCC may be deemed to have that authority of reclassification. If not, then legislation will have to be passed to gain the authority. You can bet that the lobbying dollars will be substantial as the near monopolies of Comcast, AT&T and Verizon fight to control their service offerings without any consumer protection. On the other side, search engine sites and content providers such as Google, Yahoo, Microsoft and thousands of others will be on the side opposite the ISPs.

I have posted several blogs dealing with the issues of Net Neutrality and ISP abuses:

Putting Teeth into Net Neutrality
What's Broadband?
Is Comcast a Phone Company?
More Data on Comcast and Cox Traffic Blocking
Net Neutrality Heats Up in the U.S. and Canada
Comcast, the Internet and Restrictions