Last night, the Wall Street Journal reported that FCC Chairman Tom Wheeler will circulate his proposal for new Open Internet rules this week. The ensuing wave of attention and media coverage that followed the announcement speaks volumes of how important this issue is – which is exactly why we have written so much about it in the past. Here, we will take a look at the provisions of the proposed rules (as reported by the Wall Street Journal), and provide you with plenty of background on each.
So what do the proposed rules contain? Here’s the rundown:
- The proposed rules give service providers flexibility to explore new business models
Under the proposed rules, ISPs would be able to give certain traffic preferential treatment, as long as these arrangements are on “commercially reasonable” terms. This means that firms – both ISPs and content providers – are free to explore new business models that can make their content and services even more appealing to consumers. Examples of such innovations include sponsored data (Facebook subsidizing my mobile data plan? Yes please!), new Internet access models for consumers who might not be interested in (or want to pay for) access to every single website in the world, Content Delivery Networks, and myriad of pricing innovations that give consumers more choice and a better online experience. And no, don’t worry, small start-ups will not become stuck in the slow lane – in fact they will benefit from new and exciting ways to differentiate themselves from their competition. Flexible pricing will also allow an explosion of diverse new applications, like the Internet of Things, that don’t stress the Internet as much as Netflix does.
- Whether preferential treatment terms are deemed “commercially reasonable” will be decided on a case-by-case basis
As predicted by Richard Bennett back in February, the Commission has settled on a “common law” like, case-by-case approach in their revamped net neutrality rules. A case-by-case approach is unquestionably the way to go, as it will allow wireless providers to experiment with business models without risking an unnecessary regulatory response. Yet again, Chairman Wheeler shows that he understands competition, the need for regulatory humility, and the paramount importance of the consumer. “Commercially reasonable pricing” is the good kind of discrimination, not the bad kind.
- Back-end interconnection and peering is left to the markets
Despite Netflix’ latest handwringing about having to pay for transit (I get it, I don’t like to put money on my metro card either!), there is no need for regulation of the interconnection and peering market. This market is burgeoning with new and innovative ways to connect networks, and content providers can choose from a wide range of transit providers at rapidly declining prices.
- Broadband will not be reclassified as a public utility (at least not for now)
Title II is an obsolete regulatory framework designed for monopoly telephone networks, would be a major hurdle to future development, and may provide at best an imperfect jurisdictional basis for net neutrality. Reclassification remains on the table and hangs as a dark cloud over those who value Internet freedom, but at least in the short term it seems unlikely that Chairman Wheeler will take us down that path.
Had enough links yet? No? Good, because we have quite a few more:
What the heck is “net neutrality” anyhow?
Jeffrey Eisenach talks net neutrality and Internet governance on the Diane Rehm Show
The EU’s roaming and net neutrality vote puts it on the path to a digital crisis
Who stands to lose the most from the net neutrality decision? Google (and consumers)
Net neutrality: Wheeler’s Vietnam?
Giving up the net neutrality quest
Why the FCC’s Open Internet Order can’t ensure real net neutrality
Jeffrey Eisenach discusses ins and outs of net neutrality on the Diane Rehm show
Net neutrality: A one-sided outcome in a two-sided market
Net neutrality: A complex issue, then and now
Court decision on net neutrality provides an opportunity for the FCC