FCC Chair Wheeler Re-Opens Conversation on Net Neutrality

By Tara Seals December 06, 2013

Is the Federal Communications Commission prepared to reverse its stance on Net neutrality? The commission’s new chairman, Tom Wheeler, was slammed this week for implying that ISPs may be able to charge premiums to content providers like Netflix in exchange for prioritizing that traffic—but his remarks were ambiguous.

The FCC's 2010 Open Internet Order, of course, expressly prohibits this type of arrangement:

"[B]roadband providers that sought to offer pay-for-priority services would have an incentive to limit the quality of service provided to non-prioritized traffic," it reads. "For a number of reasons [...] a commercial arrangement between a broadband provider and a third party to directly or indirectly favor some traffic over other traffic in the broadband Internet access service connection to a subscriber of the broadband provider (i.e. 'pay for priority') would raise significant cause for concern. ... [A]s a general matter, it is unlikely that pay for priority would satisfy the 'no unreasonable discrimination' standard."

What Wheeler said regarding that, during a session at Ohio State University, again, is ambiguous:

"I am a firm believer in the market," he said. “I think we’re also going to see a two-sided market where Netflix might say, ‘Well, I’ll pay in order to make sure that you might receive, my subscriber receives, the best possible transmission of this movie.’ I think we want to let those kinds of things evolve. We want to observe what happens from that, and we want to make decisions accordingly, but I go back to the fact that the marketplace is where these decisions ought to be made, and the functionality of a competitive marketplace dictates the degree of regulation."

Of course, Wheeler’s remarks can be interpreted as supportive of giving ISPs the ability to charge content owners for reliable service—something that consumer advocates were swift to condemn. Noting all of the old pro-Net neutrality arguments, Public Knowledge Vice President Michael Weinberg wrote in a blog that "In other words, [he is] giving ISPs the power to pick winners and losers online. This endorsement was all the more unexpected because it followed his explicit endorsement of 'Net Neutrality' and a speech that touted the FCC's role in protecting the public interest.”

"ISPs should not be allowed to charge some websites or services extra just so those websites and services actually work," Weinberg continued, pointing out that “in order for this type of 'fast lane' to make sense there needs to be a 'slow lane' that is bad enough to make someone like Netflix need to pay to get out of it.”

And, “this sort of pricing structure works to freeze out new innovation from companies that cannot afford to outbid incumbents.”

However, when asked directly, Wheeler emphasized that his support for Net neutrality is an unqualified “yes.” In the speech, he noted that “as networks evolve, so should government oversight,” Wheeler said in his speech. “There are some who suggest that new technology should essentially free the new networks from regulation, that market forces are enough to ensure that the public interest will be served. I am a rabid believer in the power of the marketplace. But I have seen enough about how markets operate to know that they don’t always, by themselves, solve every problem.”

In this light, the statement reads in a less sinister fashion. Cable, telco and wireless companies have long complained about “bandwidth hogs,” the top 2 percent of Internet users that consume the vast majority of traffic. They’ve also long complained about the rise of over-the-top (OTT) video services, which are spurring more and more bandwidth usage. ISPs have been focused on upping broadband speeds in the connected device era more effectively and stave off churn, which translates to making significant investments in network infrastructure, a time-consuming process that eats into profit margins and shareholder value. And the ARPUs, as they are, they claim, simply cannot make up for that hit.

So, as an alternative to violating Net neutrality to control what rides their networks, ISPs have been innovating new service packages. For instance, the idea of application-specific packages has been bandied about for years. A consumer could choose to purchase a premium bandwidth tier that would come with unlimited access to a Hulu or Netflix, let’s say, and the ISPs would then offer the content company a revenue share on the back-end. In this sense it’s more of a channel partnership than a discriminatory practice.

The remarks come as a court decision on Net neutrality stemming from Verizon’s challenge of the Open Internet Order is expected in the next two months—the case is in front of the U.S. Court of Appeals for the District of Columbia Circuit. Verizon is arguing that the FCC lacks the authority to enforce Net neutrality because, it claims, Congress did not grant the agency the ability to do so. “The FCC has acted without statutory authority to insert itself into this crucial segment of the American economy, while failing to show any factual need to do so,” Verizon said in its brief to the court.

If Big Red prevails, it’s not just the pay-to-play prohibition that will go away—the Order also prohibits ISPs from throttling or blocking high-bandwidth services or services that compete with their own (i.e., Verizon is prohibited from throttling Hulu and prioritize its own Redbox video service). And expect Wheeler to make more than just ambiguous comments in the matter should the case go that way.




Edited by Blaise McNamee

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Microsoft Research Project Allows for Inexpensive 3D Scanning from a Smartphone

By: Christopher Mohr    8/27/2015

It is now possible to perform 3D scanning from a smartphone, without additional hardware or an Internet connection, thanks to a new Microsoft Research…

Read More

Amazon's Scaled Back Consumer Device Efforts, Dash Button, and More

By: Paula Bernier    8/27/2015

Word is that Amazon is scaling way back on its consumer devices efforts, having let go of dozens of Lab126 engineers who worked on its Fire phone, acc…

Read More

The 4K War is Brewing, but Don't Expect a Crowned Winner

By: Special Guest    8/27/2015

The hype around 4K Ultra HD video is growing and we're seeing it gain traction in real ways. From the NFL Network and CBS using 4K cameras to capture …

Read More

Wallet Wars Part 2: Thanks to EMV, the Force is with Mobile Wallets

By: Special Guest    8/26/2015

In December 2015, when "Star Wars: The Force Awakens" hits movie theatres across the U.S., a very different type of force will 'awaken' the mobile wal…

Read More

Major Automakers Forge Alliance to Combat Cyberattackers

By: Joe Rizzo    8/25/2015

If you take a few minutes to think about what hackers go after, you'll realize that it is anything that has an Internet connection. Thanks to the Inte…

Read More