The Federal Communications Commission’s landmark 3-2 vote on Thursday to reclassify the Internet as a public utility caps an extraordinary period in which the tech industry and Internet users turned their growing influence into actual power.
Perhaps because much of the drama took place away from the floors of a stagnant Congress, and perhaps because the decision is somewhat technical in nature, it would be easy to imagine many Americans greeting this news with a shrug. But before that happens, it is worthwhile to take note of the winners and losers in the battle over net neutrality — a clunky phrase that means Internet service providers cannot give preference to any particular online services over others in terms of how fast data is delivered to end users. It is a monumental moment both for policy and politics.
Silicon Valley: Big winner. The net neutrality fight was a political coming-of-age moment, an actual tangible accomplishment in Washington at a time when those are hard to come by. Tech firms big and tiny have been very nervous about what sort of extortionist fees the ISPs — in most areas of the country dominated by cable companies — would slap on them for preferential Web speeds. Big Tech didn’t want to be beholden to them and start-ups worried they wouldn’t be able to afford to the inevitable pay-to-play.
Silicon Valley’s D.C. offices: Winner. As recently as five years ago, it was news that the likes of Facebook, Twitter and Google opened and expanded their K Street operations. Now folks like former Rep. Susan Molinari, currently Google’s top lobbyist, and former Hillary Clinton adviser Mark Penn, who runs Microsoft’s shop, have something big to count among their successes. For companies that tried their best to stay out of the Washington game until they simply couldn’t avoid it, this should confirm that it’s money well spent.
Democrats: Winner. Already having to defend this deep-blue turf against libertarian, tech-savvy Republicans who sing pretty about low taxes and minimal regulation, the FCC’s party-line vote — and the GOP’s vow to sue to stop the new doctrine from taking effect — makes it clear who was on Silicon Valley’s side here. And that’s exactly what Big Tech donors will hear from the likes of Hillary Clinton and Harry Reid as we round the corner into 2016.
GOP: Loser. The right recently cozied up to the tech industry and was basking in the reflective glow of a rare piece of the economy that prospers and supports their mantra of American exceptionalism. But Republicans are now on record as being opposed to the governing policy regulations this sector says protects the engine of its innovation. The next item on Silicon Valley’s agenda is comprehensive immigration reform, which the industry insists it needs so it can hire more of the foreign tech whiz kids who are already getting their degrees at U.S. schools. Can the GOP deliver? Uh, no.
Barack Obama: Winner. Came into office citing Internet connectivity as a fundamental right, same as running water, electricity and phone service. Now it’s official. Another box checked off his 2008 to-do list.
Jeb Bush: Winner. Unlike his 2016 rivals, the former Florida governor has said so little about net neutrality that it’s a challenge to find a single quote on the issue. Yet, Bush does say things that Silicon Valley likes to hear about immigration reform. By staying above (or at least standing to the side of) this fray, he emerges unscathed.
Rand Paul and Ted Cruz: Losers. Big Tech has long been one of the most prosperous sectors of the American economy, and was the only one creating new jobs during the Great Recession. Net neutrality was something the bosses of those innovators insisted they needed to keep innovating. Paul and Cruz, ostensibly pro-business, didn’t care. Instead, the push is on to redub the FCC’s move as it "Obamacare for the Internet.” Why do they think that’s a winning meme? Silicon Valley is full of risk-taking entrepreneurs who don’t view "Obamacare" as a dirty word, as illustrated by recent pieces about how the health law is enabling the “sharing economy.”
Crowdsourcing public policy: Winner. The collective voice of open-Internet advocates has now spoken twice — and twice gotten its way. In January 2012, it was their outrage that killed the Stop Online Piracy Act (also known by its acronym, SOPA), a measure that was set to sail through Congress until opponents — who viewed it as a crushing blow to free expression — went berserk. The bill was spiked after Wikipedia went dark for a day in protest. Likewise, the FCC’s path on net neutrality was murky until a record 4 million commenters chimed in to show what The Internet would and wouldn’t tolerate. Obama’s strong support of reclassifying the Internet as a utility in late 2014 was a case of following the momentum.
FCC Chairman Tom Wheeler: Tie. On the one hand, the former head of both the National Cable & Telecommunications Manufacturers of America and the Cellular Telecommunications and Internet Association can now put to rest the perception that he’s a tool for AT&T, Verizon, Comcast and Time Warner Cable. On the other hand, now he’s been tarred with the accusation that he threw his old bosses under the bus to score political points with his new one. Pushing the proposal through without making it widely available for public review bolsters that view.
Big Cable: Loser. As cable subscriptions fall and millennials bypass wired TV for over-the-top apps, the likes of Comcast and TWC see their next incarnation as the dominant broadband Internet service providers. They already make a mint off of Internet users, but the new net neutrality rule prevents them from finding new profits by charging content providers for speed preferences, too.
Internet users: ? While reclassifying the Net as the FCC did Thursday is seen as a victory for free expression and innovation, it does not itself require providers to invest in a faster Internet. Will fair and open access significantly increase the demands on bandwidth? Will the loss of revenue from the content-provider end cause the Verizons and Comcasts of the world to make up for it by charging consumers more? And will any of this inspire companies or the government to invest in a better, faster information pipeline? There will be equal access to a presumably more innovative future, but how fast that future will load is an open question.