No Slow Lanes, No Fast Lanes: FCC Adopts New Regulations Treating Internet as a Public Utility

Mar 04, 2015


Should your Internet service provider be regulated in the same manner as your telephone service provider? Despite how quaint this question might sound now that many consumers bundle their ISP, telephone and television service through the same company, this issue has been the source of raging debate throughout the country (and abroad). In a vote held on February 27, 2015, the FCC voted 3-2 along party lines to approve reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. Your Internet service will now be regulated as a public utility.  Prior to last month’s vote, the FCC had delayed a decision on proposed rules in December of 2014.

Netflix buffering screen

Though there will be details to parse, the move is certainly a clear win for those favoring “net neutrality,”  the premise that internet content should flow unfiltered to the consumers who ultimately view that content.  The new regulations will preclude providers both from blocking or slowing particular content and from establishing pay-to-play “fast lanes” for those who are willing and able to pay for more direct content streams to consumers.

The Players

There are three basic constituencies involved every time someone pulls up a webpage: the content provider (e.g., Netflix, Facebook, Wendel Rosen), the ISP (Comcast, AT&T), and the end user (you, reading this blog post while the latest episode of House of Cards plays on the other side of the screen).  At issue is whether and to what extent companies like Comcast can exercise control over how fast your Facebook page and this post pull up and how frequently Kevin Spacey’s diabolical monologues are interrupted for buffering.

Rules Preclude Slowing Service for Particular Content

Netflix comes up a lot in this discussion, and for good reason. The streaming video provider accounts for nearly a third of all evening Internet bandwidth, and it offers a prime example of both the benefits and detriments of net neutrality. Obviously, Netflix customers want to be able to watch their movies and television shows from start to finish without interruption. Without being able to reliably offer such a service, fewer and fewer customers would view Netflix as a reasonable alternative to cable providers, such as—that’s right—Comcast.

So, Comcast has a theoretical incentive to slow Netflix service to its customers. Prior to the introduction of the new FCC rules, in fact, Netflix entered into agreements with Comcast and other ISPs to ensure that its customers could receive faster service. Whether these deals were simply designed to provide more direct connection between the ISPs and Netflix’s content or, rather, involved payment to the ISPs in exchange for not slowing Netflix service is a matter of debate, but Netflix’s deals with ISPs followed a federal appeals court decision striking down the FCC’s previous net neutrality regulations. The new rules would preclude Comcast from treating Netflix in a discriminatory manner.

Rules Preclude Speeding Up Service

The rules ultimately adopted by the FCC also preclude Netflix from paying for the privilege of even faster connections than other content providers receive. Such so-called Internet “fast lanes,” populated by those who can afford to pay for more streamlined connections to their customers, were a major concern for net neutrality advocates when the FCC put out proposed rules for public comment one year ago. The “fast lane,” they said puts less powerful content providers at a greater disadvantage in competing with larger companies. Fast speeds mean quicker download times and fewer interruptions. If it cannot afford to pay for the “fast lane,” a would-be Netflix competitor would have a harder time obtaining significant market share. And it is fair to ask how well-tended the free connections from ISPs to customers will be once the ISPs begin promoting premium paid connections. It appears that these potential ills have been avoided through the new regulations.

What Will Happen Now?

Clouding the discussion of net neutrality is the fact that this is all new ground and the Internet continues to develop on an hourly basis. As such, no one likely knows precisely how the FCC’s new rules will alter the Internet landscape. For their part, the two Republican commissioners who voted against adoption of the regulations say that the FCC is meddling in an unbroken arena in a manner that is sure to slow both investment and innovation. Time will tell who is correct, but what is beyond doubt is that the FCC’s vote is an historic one that will help shape the landscape of the Internet for years to come.


FCC Delays Vote on Net Neutrality Laws

Dec 18, 2014

Last month, President Obama urged the FCC to “reclassify consumer broadband services under Title II of the Telecommunications Act – while at the same time forbearing from rate regulation and other provisions less relevant to broadband services.” Theoretically, under “Title II” regulation, the FCC would be able to regulate broadband services as a utility (e.g., telephone service) but could decide not to apply certain provisions to broadband services, including rate regulations, that might impede market competition. The FCC announced that it would delay its vote on net neutrality rules until early 2015.

Tech giants such as Intel, IBM, and Qualcomm submitted an open letter discouraging the FCC from classifying broadband services under Title II, claiming that the regulations would strangle investment and innovation in broadband technology.

The FCC’s decision comes at a critical time, after a federal district court effectively struck down the FCC’s prior attempt to regulate internet access (FCC Open Internet Order 2010) earlier this year. Additionally, although the U.S. still fares well in the World Wide Web Foundation’s recent annual “Web Index” report, the report identifies certain facets of the broadband service industry that may pose threats to equal access and neutral content, such as widening economic inequality (exacerbated by cable/telephone company monopolies), price discrimination, and surveillance.

For additional background on this topic, visit my colleague’s June 2014 post on net neutrality.