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In Surprise Move, FCC Is Expected to Throw Net Neutrality Under the Bus

By dulling the rules protecting net neutrality, small companies and innovation will surely pay the price.
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Net neutrality--or the premise allowing Internet content to flow unfettered--is about to get body checked, courtesy of the FCC.

The Federal Communications Commission is expected to issue new rules Thursday that would allow companies to pay Internet Service Providers for preferential treatment, enabling their customers to have faster access and download speeds.

The effects would likely be swift, if not severe. Giant companies like Disney, Google or Netflix can handily afford to pay Internet service providers like Comcast and Verizon for special, faster lanes to send video and other content to their customers. But smaller firms, say, startup gaming and video streaming companies, would likely get cut out of the new mix, as they are less likely to have the money to pay for expanded access.

What's known as Net Neutrality today arose out of a 2010 ruling called the FCC Open Internet Order, which forbade Internet providers such as Comcast, Verizon, ATT and Time Warner from either limiting access or giving preferential treatment to companies that use its network.

FCC Chairman Tom Wheeler told the New York Times on Tuesday that speculation the commission would gut the order is "flat out wrong." Instead, the new rules will comply with an appeals court decision from three months ago.

In January, a federal appeals court ruled that because ISPs are not regulated as utilities, equal access regulations could not apply to these providers, as they do with telecommunications carriers under the Communications Act of 1934. At the time, Wheeler seemed to leave all options on the table. In a statement from January 14, he said:

I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment. We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.

Some experts had speculated that the FCC would attempt to re-categorize ISPs as utilities, thereby making them subject to regulations. That would then forbid them from carving up their customer bases and providing them with unequal levels of service.

The questions over the fate of Net Neutrality have grown larger since ISPs Comcast and TimeWarner announced a plan to merge in a $48 billion deal, although that plan is subject to a Department of Justice anti-trust review.

IMAGE: Getty Images
Last updated: Apr 24, 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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