As the Trump Administration continues its efforts to undo much of the regulation put in place during President Barack Obama’s term in office, the FCC’s efforts to peel back net neutrality rules will be particularly controversial, as the issue has sparked fierce debate for several years. While much of the regulatory rollback happened quickly using the Congressional Review Act, a law that allows for expedited removal of recent regulations under a new president, the net neutrality rules will take quite a bit more time. In fact, this is just the latest development in a regulatory dispute that has been going on for nearly 10 years. Read on to see why this is such a contentious issue, what the proposed regulations would do, and what we can expect in the weeks and years ahead.

Quick Refresher: What is Net Neutrality?

While many people have heard the term network neutrality, understanding of it tends to vary widely. That may be because net neutrality is more of a general concept than a set of clear rules. The principle behind it is the idea that all online content should be treated equally and that no internet provider should be able to discriminate or block content regardless of the source or type. Most people support net neutrality, or at least the general concept behind it, but disagree on what needs to be done to ensure that networks are designed in a way that lives up to that principle. That disagreement is what brings us to the current debate over internet regulations. Some advocates argue that regulations blocking internet providers from discriminating against or privileging certain content or sources are necessary to protect a free and open internet. Opponents argue that absent these regulations we still wouldn’t have a problem with content discrimination and we should have as few regulations as possible to allow for internet investment and innovation.

The two major categories of groups involved in these debates are Internet Service Providers (ISPs) and content companies. Internet service providers are the companies that sell access to the internet, like Timer Warner Cable, Verizon, Comcast, and AT&T. Content companies are the businesses that create and distribute the things you find online–notable examples of these include Netflix, Google, and Facebook, but every website or online service is essentially a content company. The three core priorities for net neutrality regulation have been to prohibit blocking, slowing, and the paid prioritization of a source or type of content as it makes its way through the network to consumers.

While many agree that blocking and slowing shouldn’t be allowed, the issue of paid prioritization is one that tends to have more gray areas. This debate manifests itself in the context of internet fast lanes, where companies can pay up to ensure that consumers can download their services as quickly as possible, giving them a potential edge over the competition. For more on the fast lane debate, check out this explainer.

What Were the Old Rules?

Before we can get into the FCC’s proposal to peel back net neutrality rules, let’s take a quick look at how we got here. While Columbia Law professor Tim Wu coined the phrase in a journal article published in 2003, the regulatory debate didn’t really come into play until 2008, when it was revealed that Comcast was blocking or slowing BitTorrent traffic on its network. After that dispute, the FCC tried to intervene to prohibit companies from slowing or blocking traffic, but a federal appeals court ruled against the commission, concluding that it had limited authority over internet traffic. Two years later, the FCC issued an Open Internet Order establishing rules that sought to ensure neutrality with a focus on blocking, discrimination, and transparency. However, Verizon sued the commission, and in 2014, a federal appeals court struck down the bulk of those rules and concluded that under the internet’s current classification, the FCC didn’t have the authority to prevent ISPs from slowing or blocking web traffic.

At the center of the issue was the FCC’s initial decision to classify the internet as an information service and not a telecommunication service. The Communications Act of 1934–which created the FCC and was most recently overhauled in 1996–gives the commission varying authority when regulating these different services. The courts ruled that under the initial classification of the internet, the FCC did not have the authority to prohibit the blocking or slowing of web traffic. Following those decisions, the FCC decided in 2015 to reclassify the internet as a telecommunications service under Title II of the Communications Act, which gave it much greater authority to regulate. It then imposed regulations that were similar in principle to the original rules, but were upheld initially by the courts due to the new classification. This change, classifying the internet as a public utility, allowed the FCC to regulate providers as common carriers to block any form of traffic discrimination.

The FCC’s New Plan

Although the Obama-era FCC, led by former Chairman Tom Wheeler, went through the process of reclassifying the internet to allow for stricter regulation, that effort will likely be reversed under President Trump. The 2015 rules were adopted after a 3-2 vote by the FCC and one of the commissioners voting against the measure, Ajit Pai, now holds the reins as the commission’s chairman and has since vowed to undo those regulations.

Re-Reclassification

The FCC recently took the first step in its efforts to remove the utility-style regulations placed on the internet. While the whole process will likely take some time and face several lawsuits along the way, much like the original reclassification process, most expect Commissioner Pai to be successful. The process for creating new regulations is governed by the Administrative Procedures Act, which requires a notice and comment period for all proposed changes. This means that the FCC is required to notify the public that a rule change is coming, then seek public comments and take those into consideration as it develops the final rule. The FCC issued its notice of proposed rulemaking on May 18 to begin that process. While we do not know exactly what the new rule will involve–after the comment period, the final rule will be drafted, debated, and then adopted–the public notice outlined the commission’s goals going forward.

First, the rule would reclassify the internet to remove Title II regulations from internet service providers, moving back to what proponents call a light-touch framework under Title I. It would also reclassify mobile broadband, provided companies like AT&T and Verizon, as a private mobile service, which currently faces the same common carrier regulations after the 2015 rule change. Finally, the notice also asks for comments on what are known as the FCC’s bright-line rules, which are the central components of past net neutrality regulations. Specifically, these rules prevent providers from blocking, slowing, and creating paid prioritization deals with content companies. Finally, the proposal would remove a conduct standard created under the Title II regulations that applied to all ISPs.

While blocking and slowing have been important issues in the past, the possibility for paid prioritization, or internet fast lanes, under the new rules could have the biggest effect on the direction of the internet. This form of prioritization would allow large content companies like Netflix and YouTube to negotiate deals with ISPs to ensure that their content is delivered to consumers faster than other services. While competitors may be able to strike up their own deals in an effort to level the playing field, new companies may not have sufficient money in the early stages of development to secure these deals, making established companies more difficult to challenge.

In the video below, Chairman Pai outlines his goals for the new regulation:

FCC Chairman Pai argues that these rules will spur investment, leading ISPs to expand and improve upon their networks. He says that the utility-style regulation under the current rules places too much of a regulatory burden on internet companies making additional investment less attractive. In Pai’s view, investing in innovation and infrastructure is one of the most important issues facing the internet today, so he prefers fewer regulations in an effort to spur that investment.

Opponents argue that net neutrality is core to the innovative nature of the internet, and note that several companies have said that such rules would have little impact on investment decisions. Moreover, they note that given the ubiquity of the internet in our personal and professional lives, we should start to look at it like another utility company. Instead of loosening regulations to allow companies to innovate, we should view these networks like we do the electrical grid–as essential to our daily lives–and regulate them as such. The video below outlines the rationale for viewing ISPs as utilities:

Conclusion

Internet rules have been one of the most controversial regulatory issues in the last several years and the FCC’s recent efforts to change them once again mean that they will continue to be a hot-button issue in years to come. While the concept of net neutrality is quite broad, most of the current discussion focuses on whether we need rules to prevent blocking, slowing, and paid prioritization of online content–the so-called bright-line rules.

Amidst these larger debates are more technocratic ones relating to the extent of the Federal Communication Commission’s authority to regulate the internet. When previous attempts to enact bright-line rules to prevent discrimination against any kind of traffic have failed when challenged in the courts, the FCC under President Obama decided to reclassify the internet in order to make those rules with the necessary authority. While the Title II, utility-style regulations were initially upheld by the court, it’s unclear whether that question will be answered now that the new chairman is already working to undo past efforts. Given the level of interest across the political spectrum and from private citizens and large corporations alike, more court cases are likely to follow. But many still expect these changes, once they have worked their way through they regulatory process, to be upheld in the courts. Given the number of changes to internet regulation in the past several years, many observers have called on Congress to settle the issue once and for all. While the future of net neutrality remains uncertain, we can expect the ensuing regulatory debates to continue to ignite the vigorous public debate.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post Behind the FCC’s New Plan to Peel Back the Net Neutrality Rules appeared first on Law Street.

The FCC is on the verge of allowing internet fast lanes that would allow content providers to pay for faster access for their customers. Read on to learn why this proposal has generated so much controversy.

What is an internet  fast lane?

When commentators say “fast lane,” they are usually referring to paid prioritization. This is when an Internet Service Provider (ISP), such as Comcast or Time Warner, charges a content provider, such as Google or Facebook, an extra fee for faster “lanes” of bandwidth. Effectively, the ISPs would be allowing content providers to pay for easier access to customers.

Netflix recently agreed to pay Comcast for faster access to its customers. This is the first deal of its kind.

Netflix is not happy about the deal at all. In a blog post, CEO Reed Hastings referred to the fee as an “arbitrary tax” and expressed concerns that escalating fees could continue to be charged to Netflix and other content providers. Netflix may have agreed to pay this fee not to gain an advantage but to gain download speeds they once had. This graphic from the Washington Post shows that Netflix’s download speeds on Comcast tanked during the negotiations and then suddenly spiked once Netflix agreed to pay the fee:

Why are ISPs allowed to create fast lanes?

ISPs like Comcast are allowed to charge content providers for faster access because of a recent court decision that struck down the Federal Communications Commission’s (FCC) rules regarding net neutrality. The FCC is the federal agency in charge of regulating communications over mediums such as radio and television.

Net neutrality is the concept that all data on the Internet should be treated equally. You should be able to load a Netflix page just as fast as you can load a YouTube page. This video from Mashable provides a clear visualization of the concept.

The FCC created regulatory rules in 2010 that would enforce net neutrality. Cable companies and other ISPs immediately cried foul and filed lawsuits.

On January 14, 2014, a U.S. appeals court overruled the new rules. The reason? Broadband Internet is classified by the government as an information service. The FCC does not have the authority to regulate information services. The Internet used to be classified as a telecommunications service until a 2005 Supreme Court ruling. The FCC is allowed to strictly regulate telecommunications services.

What is the FCC doing about fast lanes?

In the wake of the court ruling, the FCC is in the process of writing a new set of Internet rules that allow for fast lanes. For the past few months, the FCC has allowed public comment on its website on one main question: should the new rules allow fast lanes?

There is a possibility that these rules would permit only some heavily regulated fast lanes to exist. The FCC says that the rules would require these lanes be “commercially reasonable,” but that’s a vague requirement that could be exploited.

There’s also a possibility that the FCC could go in the opposite direction and ban prioritization. The FCC would do this by reclassifying broadband Internet as a telecommunications service, giving it the power to strictly regulate ISPs. This reclassification would almost certainly face a legal challenge by ISPs, as well as a challenge from Congress.

How have people reacted to this proposal?

The FCC received more than one million online comments about the proposed rule change in the span of five months. That is the most comments the agency has ever received, and almost topped the number of complaints the Commission received after Janet Jackson’s “wardrobe malfunction” at the Super Bowl.

Activists and content providers alike are not happy that the FCC is even considering legalizing fast lanes.

The Internet Association, an industry group that represents companies like Amazon, Google, and Uber, submitted a lengthy comment to the FCC’s website arguing, in part, that “charging for enhanced or prioritized access […] undermines the Internet’s level playing field.”

The association also expressed concern that ISPs might provide prioritization to their own content. For example, Comcast owns NBC Universal. A fast lane rule would allow Comcast to prioritize access to NBC television streaming over the quality of other network streaming services.

John Oliver, host of HBO’s Last Week Tonight With John Oliver, took a more cynical view in this widely shared segment. Oliver accused the FCC and Chairman Tom Wheeler, who used to be a lobbyist for cable companies, of corruption. He also called on Internet trolls to flood the FCC with comments.

MoveOn, the liberal activism website, released this television ad encouraging viewers to call the FCC in support of network neutrality.

MoveOn’s lead campaign director Victoria Kaplan also released a statement saying that “MoveOn members strongly support Net Neutrality and are calling on the FCC to scrap proposed rules that would undermine an open Internet.”

ISPs, for the most part, are issuing vague statements about how they support an “open Internet.” For example, Comcast released a statement saying that “we support the FCC putting in place legally enforceable rules to ensure that there is a free and open Internet, including transparency, no blocking, and anti-discrimination rules.” This doesn’t really say anything specific. Comcast argued later in the statement against a reclassification of broadband Internet, but never argued why they should be allowed to charge for fast lanes.

In stunning contrast, AT&T provided a robust defense of fast lanes in its FCC comment. The whole document is definitely worth a read, but here’s the most important quote:

“In no other area of the economy does the government ban voluntary market transactions (here, for example, quality-of-service enhancements) specifically in order to prevent those with superior resources from offering better services to their own customers.”

The line AT&T concluded the paragraph with is equally important to understanding the company’s argument:

“In short, the theoretical basis of this rationale for a strict nondiscrimination rule is thoroughly unsound and anathema to a market economy.”

AT&T’s argument is pretty unique. It is essentially saying that not allowing content providers to pay for a fast lane or not allowing ISPs to offer such an “upgrade” goes against the very foundation of a capitalist economy.

What’s important about this argument is the claim by AT&T that the fast lane would only amount to an “enhancement” in service for some companies and not a downgrade in service for companies that do not pay the fee.

Many activists doubt this will be the case. Instead, the “free” lane would be significantly slower. As John Oliver put it in the previously embedded segment, “if we let cable companies offer two speeds of service, it won’t be Usain Bolt and Usain Bolt on a motor bike. They’ll be Usain Bolt and Usain Bolted To An Anchor.”

Conclusion

Soon, the FCC will create a new set of rules governing the Internet. It will either allow fast lanes to exist and face harsh public criticism or it will fight for net neutrality and face a barrage of lawsuits and challenges from ISPs and Congress. This is an issue you will want to keep an eye on if you use the Internet regularly.

Resources

Primary

FCC: FCC Launches Rulemaking On How To Protect The Open Internet

FCC: Comment: AT&T

FCC: Internet Association: Comment

Additional

Netflix CEO: The Case for Net Neutrality

Wall Street Journal: Court Tosses Out Open Internet Rules

CNET: 2005: FCC Changes Internet Classification

Hill: Former FCC Chairman on Net Neutrality

NPR: One Million FCC Comments Filed

Comcast: Comment

Guardian: Welcome to the Age of Digital Discrimination

MoveOn: Keep Internet Open

NextGov: The FCC is Getting Serious

Geeksided: MLB Speaks Out Against Fast Lanes

Eric Essagof

Eric Essagof attended The George Washington University majoring in Political Science. He writes about how decisions made in DC impact the rest of the country. He is a Twitter addict, hip-hop fan, and intramural sports referee in his spare time. Contact Eric at staff@LawStreetMedia.com.

The post Internet Fast Lanes Will Change How You Use the Web appeared first on Law Street.

The difference between believing that the internet is vital to life and just accepting it as a useful tool is the difference between having government regulation and allowing the market to regulate it on its own. Nobody supports unwarranted government interference, but it would be unwise to think government involvement for the purpose of regulating industries is unnecessary. This brings me to the topic of Open Internet, also known as net neutrality.

In January, the US Court of Appeals in the District of Columbia changed several rules established in 2010 by the Federal Communications Commission’s Open Internet Order. The Court’s decision rolled back the rules that disabled the blocking of legal content and enforced nondiscriminatory practices, but upheld the rule that enforced transparency. The Court’s decision terrified many people and left us wondering how open and free the internet will remain. Recently, an official document was leaked that may give insight to exactly where the FCC is headed in regulating net neutrality, and unfortunately the odds look like they’re in favor of major Internet Service Providers.

The leaked FCC documents show that the Commission is considering allowing major Internet Service Providers to give large, well known companies the option of paying for faster lanes through which their videos and other content travel. This amounts to deregulating the more equalizing practice of having all content from all companies travel the same internet lanes. This means that well established companies will have an extra advantage in supplying their content to their users. How is this harmful to small startups and new innovation?

In the age of faster is better, the ability to use a service faster is more likely to be chosen over a service that runs slower. For example, you can either choose wireless internet or dial-up. They both supply an internet connection, but when was the last time you heard the screeching sound of a dial-up connection?…. Exactly!  If the FCC follows through with this idea, small startups will not be able to compete against the financial strength of giants that have the resources to provide speedier service. In addition, these costs for faster internet lanes may be passed to consumers as companies work to maintain profits.

Another possibility that hasn’t been talked about is the larger companies’ ability to recreate the innovations of smaller, lesser known companies. For example, if Company X creates a new way to shop on the internet and the larger Company Z recreates this technology, Company Z would have the advantage of faster internet speed to their site over Company X.  Even though Company X created the technology, Company Z would benefit, leaving small startups asking “what’s the point in trying?”

With our economy’s strength and growth hinging on new innovation, it is counterproductive to have an unfair system that doesn’t allow companies both large and small to have the same service capabilities. This goes directly against the entrepreneurial spirit of our country and shows that lawmakers have gotten it wrong in their assertion that the internet is important but not vital.

__

Teerah Goodrum (@AisleNotes), is a graduate student at Howard University with a concentration in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football.

Featured image courtesy of [Svilen.milev via Wikipedia]

Teerah Goodrum

Teerah Goodrum is a Graduate of Howard University with a Masters degree in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football. Contact Teerah at staff@LawStreetMedia.com.

The post Leaked FCC Documents Signal Bad News for Startups appeared first on Law Street.