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The Net Neutrality Debate Is Far From Over (And It Could Go Either Way)

New rules on Net neutrality were the most commented on policy change in the Federal Communications Commission's history. That's not likely to change policy much.
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By the time the public comment period had ended for proposed rule changes to net neutrality 10 days ago, the Federal Communications Commission logged close to 800,000 responses, making it the most commented-upon rule change in the agency's history. As a result, the FCC extended the comment period, and has set an end to its reply period for early September. 

Despite the volume of correspondence, there are significant questions about how different the proposed rules will be from the final rules, which will be issued by the end of the year. At issue is whether the Internet can be carved into so-called fast and slow lanes and whether broadband providers should be reclassified as public utilities.

The debate has largely fallen into two camps. On one side are startups and entrepreneurs who favor preserving the Open Internet Order. And on the other are more entrenched players like large cable and telecommunications companies, who'd like the ability to carve the Internet into fast and slow-speed lanes based on price.

Despite assurances to listen and be fair, critics point to FCC chairman Tom Wheeler's years spent as a lobbyist for cable companies, which has caused some to speculate that he's only paying lip service to the idea of Internet openness. The final rules are likely to allow for Internet fast lanes and slow lanes, they say, which would give big cable players further power in consolidating their position in the industry.

In case you're just tuning in, here's a quick explainer. Net neutrality is the principal, established under a previous ruling by the FCC called the Open Internet Order, that essentially mandated all data passing over the Internet be treated equivalently. The order, put out in 2010, prevented Internet Service Providers (ISPs) from charging content providers more for expanded access to networks, or from charging consumers for faster download speeds.

That order was overturned in January by U.S. Court of Appeals for the D.C. Circuit, following a court challenge by telecommunications company Verizon. The court ruled in favor of Verizon, saying that the FCC did not have the authority to enforce its previous order, unless it reclassified Internet Service Providers (ISPs) as common carriers, essentially public utilities.

The ruling has forced the FCC to revisit its 2010 order, and to formulate some new rules that are in keeping with the court decision. Which is where we are now. The FCC issued its proposed rules in May, but has allowed consumers and companies alike to weigh in during a public comment period, which ended July 18. The FCC is expected to reply to some of the comments it has gotten through September 10, and then issue its final rules by the end of 2014.

Although the idea of carving the Internet into so-called fast and slow lanes has prompted the greatest amount of public outrage, the final rules are likely to include some form of prioritization. Here's what the FCC has to say about that in its proposed rules:

We propose to create a separate screen that requires broadband providers to adhere to an enforceable legal standard of commercially reasonable practices, asking how harm can best be identified and prohibited and whether certain practices, like paid prioritization, should be barred altogether. 

Lobbying groups such as the Telecommunications Industry Association say prioritization is critical to doing business. In its own comments to the FCC, TIA said:

Consumers would suffer if new regulations inadvertently undermined networks’ ability to deliver services with the quality that users have come to expect…popular consumer services…depend on prioritization to overcome difficulties with latency and jitter that can be made worse by traffic congestion. The same holds true, with particularly serious consequences, for the growing use of high-definition video for a range of needs such as telehealth and public safety. Prioritizing these uses over less technically demanding ones…serves particularized needs at certain times without sacrificing good Internet service to all.

That's anathema to many entrepreneurs, such as Reddit founder Alexis Ohanian, who has mounted a very public campaign against overturning Net neutrality. In his view: An open Internet is essential for nurturing startups and freedom of speech, the federal court left such prioritization open as a possibility. 

Yet the one saving grace for those who support net neutrality--that is, reclassifying broadband suppliers as common carriers--will be a tough sell. Some members of Congress, including Senator Ted Cruz (R., Texas), who support legislation that would make such reclassification illegal, oppose turning ISPs into utilities. Opponents say that it would slow big companies, such as Verizon and Comcast, that have made significant investment in current broadband infrastructure.

“Reclassification, even if successful, would resolve no existing problem and would almost certainly end the massive private investment in Internet infrastructure that has gone on since 1996, when Congress created a light-touch regulatory environment for Internet access and related services,"  Larry Downes, an Internet industry analyst and a director at Georgetown's Center for Business and Public Policy, says.

Still, supporters are rallying. On Monday, Senate Majority Leader Harry Reid (D., Nev.), announced his intention to support the reclassification of ISPs as public utilities. In a letter to David Segal, executive director of Demand Progress, a progressive action group, Reid wrote:

Let me assure you that I will lead the fight to protect any Open Internet rules promulgated by the FCC against the inevitable Republican attack against such rules. Since 2006, I have strongly and publicly supported net neutrality. I believe that the Internet is one of the great equalizers of our time. Especially in a time when dark money threatens to take outer our political system, the Internet offers a forum for people to make a difference with ideas, not dollars.

And as the flood of comments from people and business to the FCC since May shows, just how open the Internet will remain is a concern for everyone. 

IMAGE: Getty Images
Last updated: Jul 30, 2014

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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