May 19, 2014

The battle over regulation of the Internet moves to Congress this week. Until now, the question of whether the Federal Communications Commission should have the power to force Internet service providers to treat all customers equally has been a legal matter, tied up in federal courts.

But on Tuesday, FCC Commissioner Tom Wheeler heads to Capitol Hill to face the House Subcommittee on Communications and Technology chaired by Rep. Greg Walden (R-Ore.), who is openly critical of the FCC’s “net neutrality” rules — the commission’s attempt at ensuring a level playing field on the Internet.

Last week, the FCC, on a split decision, voted to open public discussion on the rules. More than 22,000 public responses have already poured into the commission’s comment site.

This story is boiling up.

Journalists have largely played net neutrality as a battle among three players: the Internet providers delivering data to your home or business, consumer groups wanting to keep the providers from cutting deals with companies seeking a fast lane into homes, and businesses operating online and relying solely on the Internet for their survival — Amazon, for instance.

But media companies have a huge stake in this battle, too, as once text-based sites become heavier with video and interactive features that suck up more bandwidth, and as a larger percentage of the news audience moves online.

Don’t think of the debate in today’s terms. Think in terms of what your data flow will look like 5 or 10 years from now with more video and multimedia. That content will continue to multiply as users migrate away from your print or over-the-air offerings.

For some, the way to ensure a free and equally accessible Internet is to designate it as a public utility. Utilities can be regulated, just as the FCC regulates mobile phone frequencies and states regulate utility companies.

Those in the pro-utility camp favor “net neutrality,” the idea that the Internet should be equally available to everyone. A small TV station that streams video to an online audience would have equal access to the end user as Netflix does. It is similar to how cable TV works now; a local TV station has the same quality delivery as ESPN.

Here’s the rub: when government gets in the regulation business does something become more open or less open? Your take on the issue depends on whether you believe there’s a problem giving big content producers preference over small operators in getting to customers quickly. As the FCC stated in opening this issue, “Today, there are no legally enforceable rules by which the Commission can stop broadband providers from limiting Internet openness.”

Those who oppose the regulation of the Internet’s flow say when the government gets involved, it chokes investment and progress. Yes, the government can regulate things for consumer protection, to prevent fraud and anti-trust as examples, but the Internet carriers say they should be able to control the information packets that stream through their lines.

And who are the providers of this service that do not want to be regulated? The biggest players are the cable companies that already find themselves under attack from consumers over rising rates and from broadcasters over compensation for over-the-air programming.

As Columbia Law School professor Tim Wu said in a Wall Street Journal article:

“So, despite 15 years of high hopes, cable operators are the dominant providers of Internet access in nearly every important market in the U.S. Verizon’s FiOS service, a worthy competitor in some areas, has a national market share of just 8%. Google Fiber has less than 1%. These numbers may eventually change, but we need to face the market as it is today, not as we hope it might be.”

Professor Wu used a “bridge” analogy in his essay, asking readers to imagine a private owner controlling the only bridge into New York City. I want to build on his illustration to make my point.

Not only could the bridge owner extract a toll on the bridge, but also the unregulated operator could tell drivers that if they were willing to pay a premium toll they could enter a fast lane while other drivers crawl along in the slow lanes. There would even be a financial reason to make the slow lanes as slow as possible to give people a reason to pay to get into a faster lane.

Under FCC’s regulation, everyone in theory would be slowed down or sped up equally when traffic fills the bridge. No one would be given preference even if they offered to pay for it.

The bridge owner would say the best way to get better traffic control is for the government to stay out of it. They would say regulation limits profits and keeps other potential bridge builders from getting into the business and building new bridges. In effect, they say, if you want lower rates, let us profit. The competition that follows profitable business forces competitive pricing. The regulation, they say, would also limit the money the bridge company would have to make improvements, widen lanes or maintain infrastructure.

But when something becomes as vital to society as the Internet is now, what is the role of government to be sure it remains open and not fall under the control of deep-pocket users?

Big media companies with big plans to provide lots more video and more robust online content have many stakes in this debate. So does every TV station, all of which should see Netflix as a competitor for viewer eyeballs. If a provider gives Netflix priority streaming, its faster, smoother service makes it a more attractive alternative to over-the-air broadcasting.

If a newspaper of the future provided video that always loaded fast, never buffered, played without fail, it would have a big advantage over a smaller publication whose data sputtered its way to the user. We all know the exasperation of waiting for video to load.

Today the problem is yours to solve. But what if you have done all you can to smooth the delivery of your content only to have the Internet service provider choke your feed, and ask for more money to give you priority over the next guy?

Networks like NBC have direct ownership connections to Comcast, an Internet provider as well as a cable company. Comcast has fought the FCC before over whether it can say how much bandwidth a user can use. The case had to do with peer-to-peer use, the big volume file transfers that go around central servers. So when NBC and Comcast sought to merge, open access was top of mind for people concerned with whether Comcast would give NBC preference over competitors.

In 2011, while approving the deal, the FCC mentioned the potential conflict by warning the two parties to not “prioritize affiliated Internet content over unaffiliated Internet content . . . [or] treat affiliated network traffic differently from unaffiliated network traffic” as well as to comply with the Commission’s open Internet rules, regardless of the effect of ‘any judicial challenge’ affecting those rules.”

So the FCC is fighting over who will control the bridges that lead to what comes next. This week, it cited this data that is worth chewing on:

• The number of hours Americans spend watching video over the Internet has grown 70 percent since June 2010.

• Between 2010 and 2013, revenues from online video services grew 175 percent, from $1.86 billion to $5.12 billion.

• Real-time entertainment (that is, programming that is viewed as it is delivered, such as video streamed by Netflix and Hulu) grew from 42.7 percent of the “downstream fixed access traffic at peak time” (generally 8 p.m. to 10 p.m.) in 2010 to 67 percent of comparable traffic by September 2013.

With so much money at stake for the mega-users of online bandwidth, there are real concerns about what happens if big providers push smaller users to the curb should they be unable to pay for priority access.

What does it mean to free speech? What does it mean to “the marketplace of ideas?” What if some corporate news services pay for priority treatment but small alternative news and information sources can’t or won’t?

What’s next?

Congress may try to commandeer this whole issue and take it out of the hands of the FCC and courts. For this reason alone, this week’s House subcommittee session will be worth watching.

To read more on the net neutrality rules debate, go to the FCC’s public comment page here and click on proceeding 14-28, which will take you here, where you can submit a comment or search the filings. Many of the comments on this issue are smartly written and passionate. There is a story in the comments to be sure.

You can also comment by sending the FCC an email at or by calling 1-888-225-5322, but the commission would rather hear from you in writing.

The FCC says it hopes to have its rules in place by the end of this year.


The FCC Open Internet page, including background and official statements from commissioners.

• What is “706”? Often in this debate you will hear people use that number. They are referring to section 706 of the Telecommunications Act of 1996. In a lawsuit, Verizon v. FCC, the federal courts relied on that section. People who call on the FCC to use “706” want the government to treat the Internet like a utility and regulate it to keep it “open.”

• What is Title II? It refers to the Communications Act of 1934. Go to page 32 of the act and you will see the definitions of “common carriers.” Critics say using this rule would only address “unreasonable” or “unjust” discrimination and would allow cable companies to use that loophole to continue down the path of selective traffic regulation.

The National Cable and Telecommunications Association represents cable companies in the fight against regulation. Michael Powell, a former FCC chairman, is the head of this group.

Common Cause is a public-interest group that includes another former FCC chairman, Michael Copps, who supports FCC regulation. Electronic Frontier Foundation also supports regulation.

• The New York Times has an easy-to-follow primer on the debate reflecting the many sides of the issue.

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