Network Neutrality Adopted By FCC

A contentious set of rules – commonly known as Network Neutrality – has officially been passed by the Federal Communications Commission in a five person vote along party lines.

The rules prohibit the blocking of lawful content on fixed broadband networks (I.E.: what you have in your home), and lawful websites on wireless networks (I.E.: what you get on cell phones), though wireless networks are otherwise exempt from these rules, with the stated reasoning being a lack of capability on those networks. There is also a prohibition from outright blocking services that compete with those of a carrier (meaning, Comcast can’t block streaming video while playing up their own services). The bill also prevents broadband providers from throttling traffic unreasonably, though it does allow “reasonable” network management. Provisions in the bill state that companies must be transparent in their dealings.

However, the bill – which was written in tandem by FCC Chairman Julius Genachowski and telecommunications providers Comcast and Verizon – also paves the way for a tiered internet system, where companies can pay a premium to have their content given a priority. For the sake of clarity, imagine you’re on a pure network (for the sake of argument), where everything you download – pages, files, services like online gaming, etc. – downloads at 300MB/sec under normal, non-stressed conditions. Now, imagine that network at 100% capacity, with everything downloading at 50MB/sec. A company can pay to have their content prioritized so that it gets through at all costs. That means, using this pure example, that Microsoft could pay to have Xbox LIVE data streamed at peak rates, keeping it at 300MB/sec, at the expense of Sony, who would either have to pay up or risk their customers getting everything at possibly 20MB/sec.

Neither side is happy with the bill. Activists in favour of pure network neutrality are pledging to challenge the bill in court on constitutional grounds revolving around the first amendment with support from Minnesota Senator Al Franken, while Republican lawmakers are already promising to take the FCC to task once the GOP takes control of the House of Representatives in January. On the actual vote, the three Democrats voted for the bill, while both Republicans voted against it, with Robert McDowell penning a harsh critique in the Wall Street Journal over it.

Back in April, the U.S. Court of Appeals ruled against the FCC in a court case, stating that they did not have the right to tell Comcast to stop throttling Bittorrent traffic on their network. Mr. Genachowski mulled classifying internet providers as common carriers – therefore bringing them under Title II of the Communications Act of 1934 – but that would have brought much greater scrutiny to any legislation. It is likely that these two factors led to this legislation, due to the converging factors of the GOP taking over the House in January and the uncertainty of the 2012 Presidential election which would have put a currently unpopular Barack Obama against a likely heavily conservative opponent.

Some commentators are saying that this is a classic compromise; much like the recent debate about America’s tax bill that eventually kept the Bush Tax Cuts in place for all Americans, no one was going to be happy in the end. I have to disagree, as this bill is an unmitigated disaster from the standpoint of Net Neutrality advocates. The provisions put in to please them are all either irrelevant or contain large enough loopholes to drive a truck through, while the things they lost out on fundamentally change the face of the internet. The concessions given to wireless carriers in particular is the biggest catastrophe in all of this. For an example, this Wired post explicitly shows a plan that two mobile service providers are pitching that would charge for access to particular services such as Facebook and Skype, in addition to the regular charges that people pay for basic cell and internet service. Saying that exemptions are necessary because of limitations is a flat-out lie. The wired internet was limited in the 90s just the way wireless is limited now, for the most part. Technology improved to the point where it was possible to have a larger backbone, and this will happen for wireless regardless of any kind of rules, and despite companies selling 3G and 4G wireless services despite not having the bandwidth to support everyone.

Furthermore, this will not stimulate any kind of innovation or investment into broadband whatsoever by the telecoms who stated that any kind of network neutrality legislation whatsoever would have removed the incentive to invest and cost Americans jobs. Even without neutrality legislation, American broadband speeds are among the lowest among developed nations, and penetration is still astoundingly low in rural America, in an economy and job market that continues to emphasize computer and internet skills. No matter what, Comcast, Verizon and the like aren’t going to start investing in a better backbone, because they don’t have to; they can continue to upsell connection speeds that are nowhere close to what people actually get, charge among highest rates for them among developed nations, and rake in more money because Americans have little choice but to pay for it if they want the internet.

Lastly, any kind of legislation against blocking sites or services is done in by the tiered internet system. No, Comcast, as an example, can’t block services that compete with them or are lawful, but they can sure throttle the hell out of it and blame it on network issues. Giving larger companies a way to pay-in to a tiered system does three things that hurt anyone not working for a large company:

1) It stifles smaller businesses, who won’t be able to pay the kind of money that larger companies are going to want for prioritization.

2) It gives telecom companies a stick to beat people with to pay for higher plans, and a reason to keep their backbone smaller. How can you cry poverty when you are building a larger backbone?

3) It will cause third party services across the board to go up in response to paid utilizations, like what Level 3 is eventually going to have to do for Comcast, which will only allow these same companies who will charge Level 3 for streaming services to sell their own services as a result. “Why do you need Netflix, we provide a streaming service ourselves, for a smaller cost!”

Ultimately, any legislation along these lines would have failed to address the number one problem currently affecting consumers: the fact that in most areas, broadband is controlled by selective monopolies. In my area, my internet comes through Comcast, because I literally have no other options short of dial-up, which is an impossibility for the kind of work I do. In virtually every other area of Connecticut, people are stuck with one provider, and in rural areas, they’re lucky to get DSL. Until real competition is introduced, no legislation is going to have enough teeth, but especially legislation as useless as this is.

In the end, I see the internet going the way that television is, with customers having virtually no choice as to what they can receive, and under the same selective monopoly – usually by the same company – that they’re under with broadband. I’ll use two local examples. Cablevision customers recently lost access to all FOX programming because of a dispute over money between the two companies. As for me, I did exercise the one choice I have, and dropped Comcast’s TV package for DirecTV, which affects me today due to the fact that they’ve dropped G4 because of money. To put this in a gaming perspective, imagine if Microsoft entered into an exclusive peering deal with your ISP that allowed their Live traffic – and only that traffic – to be put into the proverbial fast-lane. If you’re a PlayStation gamer, you just got screwed, and you have no recourse except to do your gaming on the 360 if you want any kind of speed.

Due to this legislation, that’s the future we’re looking at. We might not have Netflix streaming completely blocked, but it can be slow-laned to irrelevance by companies who have a financial incentive to do so, and no reason to do otherwise because their customers have nowhere else to go.