Web Goes Ballistic Over FCC Net Neutrality Rules

By: Chris Crum - April 24, 2014

The FCC is set to propose new rules related to net neutrality, and they’re not exactly in favor of it. In fact, according to reports, these rules would enable broadband providers to give preferential treatment to content providers who pay for access to “fast lanes”.

So, you know, pretty much the opposite of net neutrality.

Can any good come from this? Let us know what you think in the comments.

The FCC said it will propose rules that would let content providers like Netflix, Google,Skype, etc. pay ISPs like Comcast (which is in the process of merging with Time Warner Cable) for those fast lanes.

Netflix has already been having a war of words with Comcast, publicly opposing the merger.

Netflix said in a letter to shareholders Monday, “If the Comcast and Time Warner Cable merger is approved, the combined company’s footprint will pass over 60 percent of U.S. broadband households, after the proposed divestiture, with most of those homes having Comcast as the only option for truly high-speed broadband (>10Mbps). As DSL fades in favor of cable Internet, Comcast could control high-speed broadband to the majority of American homes. Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”

Comcast fired back with its own statement, saying, Netflix’s opposition is based on “inaccurate claims and arguments.”

“There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only ISP in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules,” wrote SVP, Corporate and Digital Communications Jennifer Khoury. “In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans.”

On the FCC’s new proposal, the Wall Street Journal reports:

Developed by FCC Chairman Tom Wheeler, the proposal is an effort to prevent broadband Internet providers such as Comcast Corp. CMCSA +0.75% , Verizon Communications Inc., VZ +0.46% and Time Warner Cable TWC +1.04% from blocking or slowing down individual websites served up to the consumer. The idea is that consumers should be able to access whatever content they choose, not the content chosen by the broadband provider.

But it would also allow providers to give preferential treatment to traffic from some content providers, as long as such arrangements are available on “commercially reasonable” terms for all interested content companies. Whether the terms are commercially reasonable would be decided by the FCC on a case-by-case basis.

The report says the FCC will circulate its proposal on Thursday, and there will be a vote on whether or not to move forward with it on May 15th.

Ars Technica shares a statement from an FCC official:

“The FCC will be seeking comment on adopting Open Internet rules that achieve the goals of the 2010 Open Internet Order in a manner consistent with the D.C. Circuit’s decision in Verizon v. FCC. The NPRM [notice of proposed rulemaking] will propose, consistent with the Court’s analysis, that broadband providers would be required to offer a baseline level of service to their subscribers, along with the ability to enter into individual negotiations with content providers. In all instances, broadband providers would need to act in a commercially reasonable manner subject to review on a case-by-case basis. Exactly what the baseline level of service would be, the construction of a ‘commercially reasonable’ standard, and the manner in which disputes would be resolved, are all among the topics on which the FCC will be seeking comment.”

“The NPRM proposes to reinstate the same ‘no blocking’ rule adopted in 2010, but using a stronger legal rationale.” Beyond that, “new legal standard of ‘commercial reasonableness’ would be separately applied to the broadband network conduct to protect Internet openness.”

A lot of people are taking the news to mean that the FCC is killing net neutrality. Wheeler says: “There are reports that the FCC is gutting the Open Internet rule. They are flat out wrong. Tomorrow we will circulate to the Commission a new Open Internet proposal that will restore the concepts of net neutrality consistent with the court’s ruling in January. There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted.”

Still, most of the reaction we’re seeing is very negative, and isn’t buying what the FCC is selling.

TechCrunch says the new rules will “brutalize the Internet.”

GigaOm says, “When it comes to net neutrality, either the FCC thinks we’re idtios, or it just doesn’t care.”

Longtime tech columnist MG Siegler says of the news, “Ugh ugh ugh ugh ugh ugh ugh ugh ugh. Bullshit.”

It would seem that what advocates for an open Internet and net neutrality have always feared may come to fruition. Many believe small businesses are in jeopardy.

More background here and here.

UPDATE: Wheeler has written a blog post called “Setting the Record Straight on the FCC’s Open Internet Rules,” to address the “misinformation” circulating. Here it is in its entirety:

There has been a great deal of misinformation that has recently surfaced regarding the draft Open Internet Notice of Proposed Rulemaking that we will today circulate to the Commission.

The Notice proposes the reinstatement of the Open Internet concepts adopted by the Commission in 2010 and subsequently remanded by the D.C. Circuit. The Notice does not change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule. The Notice does follow the roadmap established by the Court as to how to enforce rules of the road that protect an Open Internet and asks for further comments on the approach.

It is my intention to conclude this proceeding and have enforceable rules by the end of the year.

To be very direct, the proposal would establish that behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted.

Incorrect accounts have reported that the earlier policies of the Commission have been abandoned. Two points are relevant here:

1. The Court of Appeals made it clear that the FCC could stop harmful conduct if it were found to not be “commercially reasonable.” Acting within the constraints of the Court’s decision, the Notice will propose rules that establish a high bar for what is “commercially reasonable.” In addition, the Notice will seek ideas on other approaches to achieve this important goal consistent with the Court’s decision. The Notice will also observe that the Commission believes it has the authority under Supreme Court precedent to identify behavior that is flatly illegal.

2. It should be noted that even Title II regulation (which many have sought and which remains a clear alternative) only bans “unjust and unreasonable discrimination.”
The allegation that it will result in anti-competitive price increases for consumers is also unfounded. That is exactly what the “commercially unreasonable” test will protect against: harm to competition and consumers stemming from abusive market activity.

To be clear, this is what the Notice will propose:

1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;

2. That no legal content may be blocked; and

3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

Do you think the direction the FCC is going in is a threat to innovation and small business? Share your thoughts in the comments.

Image via YouTube

Chris Crum

About the Author

Chris CrumChris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

View all posts by Chris Crum
  • RS, San Diego

    Just another confirmation that government and big business are in cahoots. None of this comes close to assuring Net Neutrality. All it does is make sure that the major players have an additional recurring income stream.

    • chris

      but the draft bill ant even out yet

  • http://www.bloketoys.co.uk/ BlokeToys.co.uk

    Wake up America, your government is bought and paid for. It’s about damn time you all realized that the left-right divide is a game show designed to distract you while the real business is done behind closed doors. Stand up as one against this Oligarchy.

  • Sofakingdabest

    Welcome back Dial Up!

  • Nicholas Duerr

    It will be just like any other government deregulation since Reagan and under every President since. The government deregulates and the correlations now have a free pass to screw everyone they canm and they do using zero lube, who remembers enron? They deregulated utilities and those bozos manipulated the market and raped US consumers. This isn’t the first and won’t be the last. Plus is a great way for the likes of Walmart!, Target, AMAZON, and the like to take over the market on the Internet. Been self employed in the net… Not now and unless you have been paying the state you live in unemployment insurance…. Say hello welfare line, the big boys are making sure they keep you under their thumb.

  • https://twitter.com/MiddleAmericaMS MiddleAmericaMS

    To clarify, a Federal judge has ruled based on legal precedents that companies using vastly more bandwidth can be charged for it. Netflix agreed with the ruling & made an agreement with service providers to pay extra.

    The FCC knew that based on past legal precedents that this was going to happen & have tried everything possible to preserve Net Neutrality only to be rebuked by the courts.

    So the FCC doesn’t have any choice, but to go along with it. Unfortunately Obama does not have the power to change this, nor does Congress, because the courts already had this set in stone a long time ago.

    Hopefully this won’t end in disaster, but telecom companies are not trustworthy in the least, so we shall see.


    • Eric Bischoff

      Yes but the FCC should have ruled long ago that the Internet is a Commons just like spectrum and then we could stop the Comcasts from discriminating on Content like they already are trying to do.

  • Eric Bischoff

    We don’t want your fast lane, we don’t want first class, we don’t want a 2 class society. Enough already, we want equality and neutrality. You better watch out you fascists, we can break you up, we can divest from you, we can stop buying your products, we can vote your guys out. I can’t wait for the next disruptive technology that challenges the Comcast Time Warner Verizon monopolies. I can’t wait for people to wake up and realize that without our unpaid labor there is no Facebook, Google, Twitter. Time to start sharing and cooperating.

    • wertwert

      We can stop buying their products, except for Oreos. They’re delicious! I’m with you though… What it appears like is that since our government isn’t very good at dealing with monopolies that the strategy has become to pretend to not see them.

  • https://twitter.com/MiddleAmericaMS MiddleAmericaMS

    Not to defend the telecoms, but they do have a point.

    Its like using free water from a gas station to run a water park. The water park owner is making a living off of overusing the water resource at the cost of the gas station. The gas station has to upgrade its plumbing & eventually has to start charging for water.

    High volume streaming businesses took advantage of the telecoms’ network infrastructure for at very little cost for years, literally forcing telecoms to invest big $ to upgrade their network & will continue to do so to keep up with streaming’s increasing demand.

    Now the question is, how will the telecoms use these new rules to gouge us?


    ps: That was the best metaphor I could think of off the top of my head.

    • wertwert

      Not really… telecoms , like comcast, are already charging their customers for the bandwidth. Comcast is trying to get paid by the sites that the customers already paid to visit… they are trying to get paid for the bandwidth twice.

      • Paul Crowley

        Sorry, but the fact is that without streaming video the networks would have been just fine. One user in 100 might be using BitTorrent but the rest were using very little bandwidth.If anything you can argue that the “speed” being advertised made no sense because it really wasn’t there. For gaming there were bursts available but the idea that the network could sustain 10/Mb/sec for more than a few users is still a fantasy. So they have been advertising something that was unavailable and non-existent.Now, with streaming video and the potential for a single home to use more than 1 stream at a time the use of 10Mb/sec becomes real… and with greater penetration of IP TV this use is growing every day. The existing networks (head end to customer) cannot sustain it, ignoring the “internet at large” argument. Someone is going to be paying for this, either the home user or someone else, because the upgrading will be expensive and time consuming. So can you blame the cable companies for not wanting to raise consumer prices? The other alternative will have cable internet bills well over $100 a month and in some places over $200 a month.

  • Robert in Vancouver

    Question: Are US telecoms and the US Government are looking out for the little guys (like you, me, and 99.9% of the population) ?

    Answer: No.

    • wertwert

      Sure they do… it’s just in a way that is similar to how wolves look at sheep.

  • Stephanie

    I concur with Nicholas. Great metaphor, MiddleAmericaMS! I don’t like the direction this is going. One decision, then another, then another and before Joe Public realizes it, significant freedom/security changes have happened that are not readily undone. I run two small online stores. I will not have the resources to compete financially with any big boys. Keyword competition is getting pretty keen as it is. Then I ask myself, what decisions would I make if my job/ my company were involved in these issues. Would I be obliged to make a purely profit driven decision?

  • Phil the Techie

    I have no complaints over the The CDN (content delivery network i.e. Netflix) Paying the ISP or the ISP Billing the CDN to improve their service.
    On one basis:

    Not with traffic management.

    If the ISP is reliable, the core network should be able to manage the traffic without prioritisation – The payment would cover enhancements to the core network of the ISP – bringing it to the level of throughput BEFORE the CDN generated traffic.

    i.e. if Netflix creates 100Gbps extra traffic through their network, Netflix pays the ISP for the hardware to carry that. (Possibly with an arbritrary profit percentage/Gb to give the ISP a reason to change the network) HOWEVER the ISP cannot prioritise traffic for the CDN on the hardware. Again, If the ISP is reliable, the core network should be able to manage the traffic without prioritisation.

    This solves 2 problems. 1. Net neutrality – Because the subscribers to the ISP have the SAME available bandwidth as prior and no traffic is managed, and 2. The CDN has an assurance the backhaul can support heavy times e,g, sporting events without needing prioritisation. If the ISP is reliable, the core network should be able to manage the traffic without prioritisation.

    This point really says a lot about the ISPs involved….. If the ISP is reliable, the core network should be able to manage the traffic without prioritisation. What the bloody hell are you going to do when 4K video hits streaming if you can’t manage the CDN’s traffic right now?!

    Anyway, the really FCC could be a lot smarter in keeping everyone happy and sticking to a more moral policy.

    • Paul Crowley

      One thing you are missing: Netflix bypassed the Internet by installing servers at most cable company “head ends” a long time ago. I believe they still have some CDN stuff like Akamai but for the most part it is coming from a local server. So if you are in a major city, there is no “Internet” involved with Netflix. Now, that doesn’t work for ESPN streaming live events…

      • Phil the Techie

        This is why I clearly stated ‘Core Network’ rather than ‘Internet’.The ISP needs to get the data from their servers or peers servers through networking gear and this slows down other users due to volume of traffic. Same as if you had 4 or 5 people all streaming from your home media server – never goes to the internet, but going to be congested. This is why Netflix needs the ‘fast lanes’ but this core network is also what needs to be improved so fast lanes are not needed.

  • Pascale1

    “Comcast could control high-speed broadband to the majority of American homes”

    America …… land of the free and freedom of choice through competition!

  • Steve

    The provision that allows the administrator to review “Fast Lane” access on a case-by-case basis is an open invitation to corruption and also does away with the rule of law.

    For this reason alone it would be an excellent idea to oppose this proposed law quite vigorously…if we truly care about a level playing field.

  • Jeremy Lansman

    As I remember the Comcast-NBCU merger agreement, their net neutrality obligations evaporate after .. was it 5 years? Please note only the last mile will be affected by this order. I suggest someone file an FCC petition for rulemaking to expand “white space” access so that it is far easier to establish community wide internet provisioning. Unused cellular spectrum in any band should be available for equality internet distribution on a first come first serve basis as a primary service. No CP, no license, just build and file. Local people could advocate laws prohibiting pole and tower access to companies not offering net equality. Get with it people, change the laws. File file file. Petition petition petition. Build build build. I just built an area system using a Mikrotik Metal. It is interesting to note it works between 2192-2732MHz way beyond unlicensed FCC legal frequency and power, and cost <$75 US. My Ipad connected to it at a range of about 3/4 mile at legal power and frequency. It indicates how cheap and easy last mile can be. Go roll your own.. I say.

  • Jeremy Lansman

    OK.. I find no time limit. Per the FCC R&O allowing the Comcast NBCU merger,
    “If Comcast or C-NBCU offers any Specialized Service that makes content from one or more third parties available to (or that otherwise enables the exchange of network traffic between one or more third parties and) Comcast or C-NBCU subscribers, Comcast or C-NBCU shall allow any other comparable third party to be included in a similar Specialized Service on a nondiscriminatory basis.” Found in Appendix A.

  • Abigail Beecher

    The won’t be happy until the internet is turned into another useless POS like TV.

  • Cliff in Calif.

    I’m not a web techie, but I have only one question. Do you trust the US government? Look at the NSA leaks–they were gathering info on *everything* “just in case we find a use for it.”. I also don’t trust the Commerce Dept. proposal to transfer internet authority from ICANN to the UN, as I believe that Russia & China controlling access to the internet throught their contributions to the ITTU would be even worse than the current arrangement.

  • Chico

    The FCC is a joke! A “good old boys’ club”