Why Internet regulation is now the hot topic

Why Internet regulation is now the hot topic

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A perfect storm of events opens up some serious soul-searching about the future of broadband in the U.S.

Author: Stewart Schley

Unless you’ve been hiding out lately – or worse, your broadband connection has gone kaput – your radar has picked up on a big-time debate happening over the future of Internet regulation in the U.S.

An unexpected confluence of events has triggered some serious soul-searching over the subject of the “open Internet” and the issue of “network neutrality.” Among the instigating developments:

  • AT&T announces a Sponsored Data Initiative that allows companies to pay for the bandwidth customers use for their applications. Critics contend the scheme sets a precedent for carriers to control what services rise to prominence on the Internet.
  • The U.S. Court of Appeals for the District of Columbia strikes down net neutrality rules enforced by the FCC in a challenge brought by Verizon. The court’s ruling escalates worry that carriers will compromise the openness of the Internet by applying favorable treatment to certain content/application providers over others.
  • Comcast announces an agreement to acquire Time Warner Cable in a $45 billion deal that would unite the two largest U.S. wireline broadband providers. The prospect of a single company commanding roughly 40% of the wireline broadband market raises concerns over market concentration.
  • FCC chairman Tom Wheeler promises to propose new rules barring Internet providers from blocking legal sites and services and/or applying unequal treatment to traffic that flows over their networks. The absence of specifics is troubling to net neutrality champions, but most hail the announcement as welcome news.
  • Netflix and Comcast agreed to a groundbreaking interconnection deal whereby Netflix will pay Comcast for instituting a network peering arrangement that assures speedy streams for Netflix customers. Here again, the arrangement leads to hand-wringing over the idea that big money will dictate whose streams get through – especially in light of press reports that suggested Netflix stream performance was deteriorating over certain ISP networks.

So there’s the backdrop. Now, here’s your quick cheat-sheet encapsulation of some of the most interesting dialogue and commentary that has stemmed from it:

The whole Internet ideal is now at risk of dying. "In a perfect storm of corporate greed and broken government, the internet has gone from vibrant center of the new economy to burgeoning tool of economic control. Where America once had Rockefeller and Carnegie, it now has Comcast’s Brian Roberts, AT&T’s Randall Stephenson, and Verizon’s Lowell McAdam, robber barons for a new age of infrastructure monopoly built on fiber optics and kitty GIFs." Nilay Patel (with lots of salty language) in The Verge.

But wait: There’s actually really nothing to worry about. "The cable industry has always embraced the principles of an open Internet and we remain committed to them. We look forward to working with Chairman Wheeler and the Commission on ensuring that American consumers will continue to enjoy a fast, robust and open Internet experience.” National Cable & Telecommunications Association CEO/president (and former FCC chairman ) Michael Powell.

Comcast-TWC is really an indicator of looming upheaval. "Industry consolidation is highly correlated with the dawn of the next thing. Google Fiber and fiber to the home is coming.” Investment guru Fred Wilson from Twitter.

Not to mention a threat to Internet-dependent media companies. “Access to programs delivered through internet connections by operators like Hulu, YouTube, and Netflix are potentially curbed as the gatekeepers to the internet further consolidate.” Temple University's Joel Maxcy in the Philadelphia Business Journal.

Comcast-TWC is a gift to the FCC. “For those who were sorry to see the Open Internet rules struck down, there is much to cheer about here: As a result of the TWC combination, these rules will now be extended to TWC systems while the FCC decides how to proceed on any future Open Internet rules.” Comcast’s David Cohen in USA Today.

Bypassing cable companies is the best policy of all. “When a gatekeeper or terminating monopoly is controlling access to a utility, you have two choices: You can try to limit the monopoly’s power with words, installing a cop on the beat, or you can just build an alternative network. Given how ineffective regulators have been constraining the power of the cable monopolists, and given that cable mergers are always approved, it’s becoming clearer that the right choice for American cities is to route around the cable behemoths.” Author, academic and frequent cable critic Susan Crawford in the Boston Globe.

The Comcast-Netflix deal changes the game for everyone. “In a world where Netflix and Yahoo connect directly to residential ISPs, every Internet company will have its own separate pipe. And policing whether different pipes are equally good is a much harder problem than requiring that all of the traffic in a single pipe be treated the same.” Timothy Lee in The Washington Post.

User fees, not content provider subsidies, should sustain the Internet. “It is clear that residential ISPs should be in the business of charging their users for access the Internet, not of charging the rest of the Internet for access to their users. This ensures that they are putting the needs of their users first.” Public Knowledge.