FCC Preparing Diluted Version of Net Neutrality Rules

No actual text has been publicly released, but it appears that the FCC’s draft plan for protecting Internet openness (a.k.a. net neutrality) would prohibit Internet providers from blocking Internet content, while providing considerable leeway for discrimination in the form of “pay-for-priority.” This shouldn’t come as a major surprise; the FCC had previously indicated that it wants to base its rules on a particular legal approach (“section 706,” if you’re following the legal wranglings) that likely imposes significant limits on how far the agency can go.  As CDT has put it, the FCC has tied its own hands through its regulatory classification of broadband.  More robust protections would require the agency to cut through that tangle of self-imposed restraints.  There’s ample legal and policy justification for doing that, but the FCC hasn’t been eager to take on the political challenge.

It’s still early in the process.  The details of the FCC’s proposal should come out in May, and the agency will solicit public comments on how to improve it.  For stronger approaches to prevail, Internet openness supporters are going to need to make their voices heard.

As CDT recently told the FCC, and as we’ve stressed in our advocacy regarding Europe’s pending legislation, a robust open Internet rule has to include a general requirement for nondiscriminatory treatment of Internet traffic.  That’s what makes the Internet so open to innovation, competition, and free expression. Anyone can transmit traffic over the network and have a fair shot at reaching Internet users everywhere, without having to worry about negotiating for special treatment on a carrier-by-carrier basis.  There may be exceptions, such as the “specialized services” or “reasonable network management” practices envisioned by the FCC’s 2010 rules,  but nondiscrimination is the general rule.

The FCC’s expected proposal has drawn fire for apparently endorsing a particular form of discrimination:  “pay-for-priority,” or the practice of carriers selling the right for some services and websites to have their Internet traffic cut in line in front of other, non-paying traffic.  As I’ve noted, the FCC’s 2010 rules allowed carriers to make special arrangements separate from their Internet services, via “specialized services.”  So there was always some room for carriers to sell special delivery services. But from what we can tell, the new rules would allow paid discrimination on the Internet service itself.

FCC Chairman Wheeler, in a statement put out today, says that the FCC’s proposed rules will not give carte blanche to such practices, and indeed will allow them only where “commercially reasonable.”  He also says there will be a “high bar” for commercial reasonableness.  We’ll have to see what that looks like in the actual proposal.  But instead of making nondiscrimination the general rule, and discrimination the exception, this approach would appear to establish the general rule that paid discrimination on the Internet is permissible.  In short, it sounds as if the new proposal changes the fundamental baseline, so the FCC shouldn’t be surprised that Internet openness advocates aren’t happy.

What’s wrong with pay-for-priority?  First, it impairs the “innovation without permission” environment that makes the Internet so vibrant.  Startups and innovators shouldn’t have to negotiate deals with all the different carriers for all the Internet users they hope to serve.  But when the established players strike deals for fast delivery, startups will either have to follow suit, or accept that their traffic goes to the back of the line.  Second, it can create perverse incentives for bandwidth deployment.  Paying a carrier for priority treatment only makes sense if the network is congested.  If revenues from paid priority became significant, carriers would have to think twice about how much to increase their generally available network bandwidth, lest they undercut the need for anyone to purchase prioritization.

CDT will be engaged in the FCC’s process and will most certainly be submitting comments.  You can keep track of the latest developments on our Internet Neutrality campaign page.

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