FCC proposal on net neutrality is a big win for open Internet advocates

Not long ago, net neutrality was little more than a buzzword to most Americans, an arcane concept within an equally arcane sector of telecommunications law. But fierce resistance to a plan proposed last spring by Federal Communications Commission Chairman Tom Wheeler that Internet advocates said would have undermined net neutrality — the principle that all data traversing the Net should be treated equally by Internet service providers (ISPs) — has pushed the once obscure concept into the spotlight in Washington.

And today, as Wheeler prepares to deliver his latest proposal on net neutrality, advocates for an open Internet seem to have won.

The plan Wheeler announced last May would have permitted ISPs such as Verizon, Comcast and Time Warner to give faster, priority access to sites and services able to pay for it as long as those deals were deemed commercially reasonable. But in a surprising about-face, he is now proposing rules that ban that practice by treating wired and wireless broadband Internet as a public utility under Title II of the Telecommunications Act — much like the telephone system.

“The Internet must be fast, fair and open. That is the message I’ve heard from consumers and innovators across this nation,” Wheeler wrote today in an article for Wired. “That is the principle that has enabled the Internet to become an unprecedented platform for innovation and human expression ... The proposal I present to the commission will ensure the Internet remains open, now and in the future, for all Americans.”

The FCC is slated to vote on the proposal on Feb. 26. If the rules pass in a form resembling Wheeler’s and the FCC’s descriptions, they will prevent ISPs from throttling, blocking or prioritizing Internet traffic, firmly establishing net neutrality principles for the foreseeable future. For advocates, that means giving consumers equal access to websites and services, preserving the level playing field that gave rise to companies such as Google and Facebook and allowed competition to thrive online. The telecom industry, on the other hand, has equated regulating ISPs with regulating the Internet itself, arguing that Title II restrictions would disincentivize broadband investment.

The turnabout of the last few months has come as a shock to telecommunications companies and even net neutrality advocates, who until recently had few powerful allies in their corner. For years, deep-pocketed telecoms such as Verizon, AT&T and Comcast have lobbied heavily against rules that would stop them from creating fast and slow lanes, all while arguing they favor net neutrality. Without those rules, large ISPs are free to create what they call paid prioritization arrangements. That means that in addition to charging customers for Internet access, they can also charge websites and services (such as Netflix, Amazon and your next door neighbor's blog) for the privilege of reaching users quickly. And because the FCC previously classified Internet providers under rules for information services rather than Title II telecommunications companies, a court ruled last year that the agency can’t stop them from selectively speeding up and slowing down traffic.

But the tide quickly turned — notably after comedian John Oliver's viral video segment attracted enough comments from opponents of the FCC proposal to crash the agency’s website. The ensuing publicity led to dozens of Internet companies, including Netflix, Reddit and Mozilla, coming out strongly in favor of Title II net neutrality rules; in November, they were joined by President Barack Obama.

Now, according to Wheeler and senior FCC officials, the proposal will apply Title II authority to enforce three bright line rules: no blocking, no throttling and no paid prioritization. At the same time, it will not grant the FCC the authority to take other steps that normally apply under Title II, such as regulating prices and forcing large providers to unbundle their network cables so that they can be sold to smaller ones.

Meanwhile, Congressional Republicans John Thune and Fred Upton — who both counted telecom companies among their financial supporters in last year’s elections — have introduced Internet legislation of their own. Their proposal would forbid blocking or slowing Internet traffic but would keep ISPs classified as lightly regulated information services, making it difficult if not impossible for the FCC to enforce rules against paid prioritization.

But it's likely that Obama would veto that bill if it made its way through the GOP-controlled Congress. And now that the fight is in its final stretch, Net neutrality advocates are optimistic.

“The GOP bills in Congress designed to undermine net neutrality are last-ditch, desperate attempts by the big cable companies who know they’ve resoundingly lost in the court of public opinion,” said Evan Greer, campaign director of Fight for the Future, an activist coalition that has mobilized support for net neutrality through mass protests and letter writing campaigns.

But she says that even if the FCC's plan succeeds in reclassifying the Internet as a utility, a loophole Wheeler has alluded to might still allow Internet providers to charge bandwidth-intensive services like Netflix interconnection fees for delivering their data smoothly and speedily. An important distinction will be whether those interconnection restrictions apply to Internet exchanges, the relatively unknown companies such as Cogent, Level 3 and XO that connect ISPs at the backbone of the network. Wheeler has hinted that he plans to regulate these entities as well on a case-by-case basis. But if there is any ambiguity in the rules, some worry, paid prioritization may simply be pushed one level deeper.

“The FCC moving toward protecting Internet freedom through Title II net neutrality rules is a truly historic victory for the public,” Greer said in an email. “It's critical that the FCC listens to the clear mandate for the clearest rules possible that ban Internet service providers from all forms of discrimination.”

But while the devil is in the details, the net neutrality fight is a symptom of a much broader dissatisfaction with giant cable and Internet service providers. In many parts of the U.S., Americans must choose between one large cable company and one large phone company for Internet access, if they have any choice at all. That’s due to the large number of telecom mergers over the past two decades and the fact that the companies have lobbied successfully in 20 states to legally block cities and local communities from deploying broadband networks of their own.

This lack of competition is largely why Americans pay significantly more money for slower Internet service compared with residents of other countries. Top ISPs Comcast and Time Warner Cable, which are currently seeking approval for a merger, consistently rank dead last in customer satisfaction rankings. It's the product of a broadband market dominated by a small handful of powerful players, and the telecoms intend to keep it that way: Comcast holds eighth place for the most lobbying dollars spent in 2014, above defense contractors Boeing and Lockheed Martin. And big ISPs are already preparing to take the FCC back to court if the new ruling subjects them to Title II regulation.

The good news for consumers is that whatever becomes of the FCC’s new proposal, existing telecoms are already being challenged on multiple fronts. Google Fiber, the search giant's high-speed Internet service, is quickly expanding into markets that once belonged exclusively to Comcast and Time Warner. Smaller companies such as Tucows are also entering the ISP game, hoping to capitalize on Big Telecom’s customer service gaffes. And last month Obama announced a plan to overturn the state laws that prevent public broadband deployment, potentially clearing the way for faster, municipal networks to emerge.

In other words, the FCC's pivotal ruling may bring the current net neutrality battle to a close. But the bigger war for the competitive soul of broadband Internet will likely continue into the foreseeable future.