FCC Chairman Drops Hint At Agency’s Net Neutrality Decision

Federal Communications Commission (FCC) chairman Tom Wheeler made net neutrality advocates cautiously optimistic on Wednesday, when he talked about the agency’s upcoming vote on the issue in Las Vegas. He didn’t say anything outright, but hinted that the FCC was getting ready to put broadband Internet under Title II of the Federal Communications Act of 1934, which means they’ll refuse to allow Internet service providers (ISPs) to create “fast lanes” and “slow lanes” for access.

Yesterday, Politico reported that Congress might be working on drafting its own legislation about net neutrality. Senators Patrick Leahy (D-VT) and Doris Matsui (D-CA) both revived legislation that would help preserve an open Internet without reclassification. It would give the FCC new authority to ban the type of paid prioritization that the ISPs seek.

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Politico also reported that Rep. Darrell Issa (R-CA) doesn’t understand what’s happening here. He says anti-trust laws are the best regulation there is for preserving net neutrality. However, the ISPs don’t compete directly with each other, which allows all of them to create “fast lanes” and “slow lanes” and charge whatever they want for access to the fast lanes. That won’t just make it so some consumers might not have a choice about what streaming service they use (Amazon or Netflix), it will also crowd out smaller websites–like blogs and mom-and-pop retail sites–who can’t pay the premium. The slower load time will drive customers to the bigger companies with faster loading websites.

What net neutrality advocates want is for the FCC to do something to prohibit that. The problem, thus far, is the fact that courts have twice ruled that the FCC does not have that authority. Reclassification under Title II would give them the needed authority, which would make them legally able to draft rules regarding paid prioritization.

Broadband Internet, according to CNET, was originally defined as an information service, which slaps it squarely under Title I instead of Title II. Title I entities are only lightly regulated. Reclassifying broadband under Title II would mean much heavier regulation.

That leads to what the entire industry, and other related industries, are doing in order to scare the FCC away from that. Companies such as Intel, Qualcomm, Cisco, and IBM, warned the FCC in an open letter that upholding net neutrality by reclassifying broadband will lead to a serious drop in infrastructure investments and innovation.

“And as some have already warned, Title II is going to lead to a slow down, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it. One study estimates that capital investment by certain broadband providers could be between $28.1 and $45.4 billion lower than expected over the next five years if wire line broadband reclassification occurs. If even half of the ISPs decide to pull back investment to this degree, the impact on the tech equipment sector will be immediate and severe, and the impact would be even greater if wireless broadband is reclassified.”

The ISPs will make good on that threat too, if only just to say “I told you so,” and galvanize Congress into some type of action that will help re-inflate their profits. Big business cannot be trusted.

There’s a huge tangle of problems with the entire telecom industry. For instance, the telecom companies must work with, and pay, local governments for access to public rights-of-way, and they have to work with local governments and existing utilities (like the electric companies, for instance) over “pole attachment” contracts.

But the telecom companies also don’t compete directly with each other. Comcast’s Executive Vice President, David Cohen, said to Ars Technica last year that it’s too expensive for the cable companies to compete with one another. That’s why Comcast didn’t see a problem with acquiring Time-Warner; the two don’t compete at all. In most markets, consumers are the victims of this. They have one, or if they’re lucky, two choices, for cable and broadband Internet service. Only a few markets have more than two choices.

That could be due in part to the issue with local governments and existing public utilities, but nobody can argue that it doesn’t inflate the telecom companies’ profits when consumers have a choice to either go with the crappy company, or go without. For cable, that may be an easy decision. For broadband Internet, not so much, since the Internet is less and less of a luxury these days.

In other words, the entire telecom industry is a glaring example of why the so-called “free market” that we keep hearing about from Republicans doesn’t work.

Ending net neutrality would take away the ability of a small company to compete with a big company on the Internet. The big companies can afford the premium for the “fast lane,” while the small companies can’t. The ISPs don’t care; they want money. The rest of us, who see the Internet as the only equalizing force between small start-ups and blogs, and the huge multinationals, will continue to fight for it.


H/T Mashable | Featured image by Free Press. Licensed under CC BY-NC-SA 2.0, via Flickr

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