Internet Neutrality Rules Alarm Even Online Giants

InternetThe proposed internet neutrality rules announced by Federal Communications Commission (FCC) Chairman Tom Wheeler recently have alarmed even online giants, such as Google, Microsoft, Facebook, Twitter and Amazon. Although the text of the proposed rules are not yet available to the public, a furor arose when Wheeler stated the new rules would allow for broadband internet service providers (ISP’s) to negotiate with content producers for enhanced service so long as any agreements are commercially reasonable. Google, Facebook, Amazon and other large online companies joined together to send a letter to Wheeler and the other four commissioners expressing their opposition to the proposed rules.

Even without the opposition from the alarmed online giants, the proposed internet neutrality rules may be dead on arrival. The FCC is governed by five commissioners, all appointed by President Obama. Three of the Commissioners are Democrats, including Wheeler. The other two commissioners are Republicans because the president is only allowed to appoint three members from the same party. An FCC vote to continue forward with the rule making effort is scheduled for May 15. Besides Wheeler, the other two Democrats have expressed concerns over the proposal. Jessica Rosenworcel said she wants to table the vote for a month to respond to a groundswell of negative public opinion and Mignon Clyburn posted her reservations about the proposed rules in her blog. The two Republicans, Ajit Pai and Michael O’Rielly, are opposed to any rules governing net neutrality and are expected to vote against the proposal. Wheeler appears to need the support of the two Democrats to move forward with the rule making.

Commentators have characterized Wheeler’s proposal as setting up internet fast lanes and slow lanes. The proposal announced by Wheeler is the agency’s response to its prior internet non-discrimination rules being struck down by a federal appeals court in January. Wheeler’s proposal would allow for more agreements like the deal between Netflix and Comcast to provide priority service for the streaming content provided by Netflix. Many see the potential “pay to play” service upgrades for larger content providers as creating an internet slow lane for everyone else.

The federal appeals court which struck down the non-discrimination rules left open a clear avenue for reinstituting the rules if the FCC reclassifies the ISP’s as telecommunications services providers under the Telecommunications Act of 1996. Wheeler, a former telecommunications company lobbyist, has resisted reclassification, although he said the option is still on the table. The debate over the form of regulations pits the broadband ISP’s against smaller content providers, tech giants and many internet users. The large technology companies cite the unprecedented innovation that has occurred over the last several years based on a free and open internet and express their fear that such innovation could be stifled if new content providers are relegated to an internet slow lane.

Many internet users will have mixed feelings about the proposed rules. If their web use is limited to streaming Netflix fare or other content from larger providers, then users may favor the rules. For those regularly engaged in web browsing for other content, the rules could make such browsing more time consuming as small site traffic loads slower because of the priority access provided to the larger content providers.

Given the alarm bell struck by the online tech giants in their letter to the FCC Commissioners regarding the proposed internet neutrality rules, the even internet playing field promised by Chairman Wheeler may be “even” only in concept. The large tech companies are worried that the even field may provide a better bounce to those content providers paying for enhanced service. The FCC Commissioners will have some difficult decisions to contend with next week regarding how to move forward with new rules.

By William Costolo

National Journal
Wall Street Journal
New America