The FCC Net Neutrality Framework: Ready for Prime Time?
Some action needs to taken on defining the Open Internet.
The FCC rules for an open Internet are to be voted on soon. This will spark great debate, with Internet providers mostly against the rules and content providers and consumer groups for the rules. The rules are relatively mild, but I think the service providers will still fight them and also engage Congress on their side. With Republicans taking over the Congress, I expect that the FCC will be battling legislation that would strip the FCC of any Internet oversight.
In a press conference delivered on December 1, 2010 by Chairman Julius Genachowski, "Remarks on Preserving Internet Freedom and Openness", the chairman spoke of the of a framework, draft rules, for an open and free Internet. This is in anticipation of the December 21 FCC meeting that has the Open Internet Order as one of the agenda items. The FCC has received over 100,000 comments on the open Internet issue. A major concern is the continued business growth that the Internet has stimulated while protecting the users from restrictions.
Chairman Genachowski stated:
A central goal of the proposed open Internet framework is to foster this cycle of massive investment in both the edge and the core of broadband networks to the benefit of consumers and our economy. Protecting the Internet freedom will drive the Internet job creation.
The crux of the proposal, which would benefit open Internet rules for the first time, is straightforward.
First, consumers and innovators have the right to know basic information about broadband service, like how networks are being managed. The proposed framework therefore starts with a meaningful transparency obligation, so that consumers and innovators have the information they need to make smart choices about subscribing to or using a broadband network or how to develop the next killer app.
Second, consumers and innovators have the right to send and receive lawful Internet traffic.... Thus the proposed framework would prohibit the blocking of lawful content, apps, services and the connection of non-harmful devices to the network.
Third, consumers and innovators have a right to a level playing field. No central authority, public or private, should have the power to pick which ideas or companies win or lose on the Internet.... And so the proposed framework includes a bar on unreasonable discrimination in transmitting lawful network traffic.
The proposed framework also recognizes that broadband providers must have the ability and investment incentives to build out and run their networks.... To this end, broadband providers need meaningful flexibility to manage their networks.... Reasonable network management is an important part of the proposal.
Some action needs to taken on defining the Open Internet. Service providers like Comcast are becoming more aggressive in hopes of increasing their revenue. Comcast and Level 3 are arguing over a peering fee that Level 3 deems unreasonable. Neflix video streaming traffic has more traffic going to Comcast than Comcast traffic going to Level 3's network.
Level 3 is claiming that the Comcast fee charged to Level 3 "violates the spirit and letter of the FCC's proposed Internet Policy principles" by asking for a recurring fee from Level 3 to carry traffic from its network. The issue is that most network operators work on a mutually equal traffic flow in both directions. Comcast sees the unequal traffic condition as unreasonable and wants to charge a fee.
A major problem for Comcast is that Netflix traffic from Level 3 to the Comcast network can significantly erode the video-on-demand fees Comcast charges their subscribers. It is an action like this that is helping drive the push for a clear set of enforceable rules for the Open Internet.
The proposed rules do not call for reclassifying broadband services as a Title II telecommunications service, an action that would create even a bigger battle with the providers. The rules are focused on wireline broadband services. It is acknowledged that wireless services are of importance as well. The wireless broadband rules include the transparency requirement and a no-blocking-of-traffic rule for services that compete with the broadband providers' services. This would stop providers from blocking competing services like movies and other applications.
Three of the FCC Commissioners will have to vote in favor for the new rules. However, FCC Commissioner, Michael J. Copps is calling for stronger Open Internet protections than what are proposed. If Copps does not vote in favor of the rules, it is very likely that the rules will not be approved.
Even if the rules are approved, expect Congressional action against the FCC and court challenges to be forthcoming soon. Watch for pro and anti-rule statements from many sectors of the industry and politicians on December 21, 2010 independent of which way the vote turns out.