Time to press pause on Internet regulations

In some ways, global communications wonks today resemble spies on Washington, D.C., rooftops, intently eyeing the Federal Communications Commission (FCC) for signs of its next move in the fight over how to regulate the Internet. It’s like a 1980s Cold War thriller — and almost as dramatic.

Though largely framed as a domestic issue, the rest of the world, particularly Europe, is watching intently as the U.S. considers possibly drastic changes to its regulatory framework for communications and technology. Given the extent to which such policies affect the rest of the world, U.S. regulators should avoid any rush to judgment or a major change in policy.

For the past eight years, the FCC has grappled with an open Internet policy, also known as Net neutrality. It has twice attempted to institute a formal law, only to be told by U.S. courts that it lacks the authority to impose rules generally designed to prohibit the blocking or slowing of Web content by Internet service providers (ISPs). Now the FCC is again attempting to enact an overarching policy, following through with a notice of proposed rules making introduced May 15. Initial comments were due by July 18 and racked up more than 1.1 million comments. Reply comments are due by Sept. 10.

This time around, there is a possibility that the FCC will put in place laws that look eerily similar to what has been the status quo in Europe despite a growing chorus of calls for change. Regulations there make the Internet a common carrier, a public utility strictly overseen by unelected government bureaucrats. That model has hindered deployment to rural areas in Europe and created a system in which telecom newbies rarely arise and incumbents have little incentive to upgrade networks.

Rather than learning from Europe, regulators in the U.S. might be rushing toward reclassifying the Internet without thinking twice about the long-term effects of such changes. For one thing, does making broadband a common carrier increase competition and performance? Abundant economic analyses as well as the European experience show that next generation networks (NGNs) — which can transport voice, data and other media such as video — cannot be financially viable within these limits. A study by University of Pennsylvania law professor Christopher Yoo, for example, found that 82 percent of Americans have access to NGNs of 25 megabits per second (Mbps) or higher, whereas only 54 percent of Europeans have such access. This is because, as the report also found, the U.S. non-common-carrier model encourages companies to invest more in building their own networks — $562 of broadband per house, compared with $244 per house in Europe.

Moreover, what Internet trends should be most important to the discussion? The majority of what is delivered to devices is video (which Cisco estimates will account for 84 percent of Web traffic by 2020) and a huge and rising proportion is mobile. To what extent would — or should — common carrier laws apply to mobile Internet? The FCC would be wise to resist any new regulations on this rapidly evolving Internet architecture.

How should data centers that help direct traffic to Internet users factor into the discussion? Data centers are becoming an increasingly important part of how the Internet works, because of the prevalence of virtualization and cloud services and because of the centers’ role in helping structure traffic worldwide. This puts considerable power in the hands of a few big players, not only content delivery networks such as Akamai and Level 3 but also content providers such as Google, Facebook and Amazon. How will common carrier regulation affect these major economic drivers, and should they be concerned whether broad regulatory authority will eventually make its way from Internet providers to content providers?

In addition, what is the future of peering deals, in which content providers reach agreements with ISPs to help deliver video traffic that was previously managed by a third-party content delivery network? Netflix, for example, just signed such a deal with AT&T (on the heels of similar deals with Comcast and Verizon), in an effort to increase performance. But what is the future of these deals within the context of Net neutrality or common carrier regulation, and should they continue to be conflated with such policy discussions despite the fact that they have been around for quite some time? Should peering deals even be part of Internet classification discussions if it is business as usual for the Web?

Discourse is the foundation of a functional democracy. But in this case, all too many questions remain unanswered. Issues such as peering are being muddled with the original doctrine that Internet carriers should not block or slow content. Such confusion ultimately hinders a more thorough analysis regarding the adoption and deployment of the Internet.

I applaud the U.S. legislators who are engaging in a more thoughtful discussion of how to overhaul the nation’s communications laws rather than focusing on one issue at a time. Congress’ efforts to update these laws, concentrating on issues such as competition, spectrum and, most recently, interconnection between content and Internet providers, should be commended and welcomed by more legislators, regulators and experts. That the U.S. has wildly obsolescent telecommunications laws might even be a boon for progress; it encourages the Net neutrality debate to transcend political ideology. Even FCC chairman Tom Wheeler has acknowledged the inevitability of an update.

But regulators should pause to evaluate carefully the costs of implementing a European-style regulatory model. Only then will the discussion over how closely the government should regulate broadband make sense. While it may not get the telecom policy wonks off their roofs, it will surely bring some sorely needed sanity to the debate.