FCC Urged To Preserve Internet 'Payola' Ban


Among the flurry of last-minute comments submitted to the Federal Communications Commission about its proposed neutrality rules was a ringing endorsement of new regulations by legal expert Tim Wu, who coined the term net neutrality.

In his 10-page filing, Wu argues that neutrality promotes free speech online and urges the FCC not only to ban Internet service providers from blocking Web sites, but also outlaw online "payola," including deals for prioritized service.

"It is the absence of the fee paid to reach others that is the defining feature of the Internet as an open speech platform, and as a kind of subsidy to non-profit or low-income speakers," writes Wu, a professor at Columbia Law School. "That means a net neutrality rule may succeed in its speech goals to the extent it preserves the traditional ban on payola, whatever form such demands may take. Critically, payola schemes can be framed as fees for 'prioritized' service."



Wu was just one of thousands of commenters who flooded the FCC last week with arguments regarding its proposal to enact rules requiring ISPs to allow consumers to access all lawful content and to refrain from discrimination.

Wu added that "by design and tradition" speakers on the Internet "have never paid extra fees to reach listeners."

"Once you are 'on' the Internet, every user can, generally, reach every other without paying another, extra fee," Wu writes. "It is underappreciated how important that fact is to the Internet as a speech platform. Blogs could not exist in a world of payola."

Critics of the proposed regulations, including telecom giant AT&T, say new rules are unnecessary because the FCC issued a policy statement in 2005 that already requires ISPs to allow users to access all lawful content and application. AT&T and other critics also specifically oppose a blanket nondiscrimination rule, arguing that some types of pay-for-prioritization deals would benefit consumers and businesses.

"By forbidding such agreements, the proposed strict "nondiscrimination" rule would deny consumers the benefit of many performance-sensitive IP applications in that it would ban the technologies needed to provide those applications in a cost-efficient manner," AT&T said last week in its 255-page filing. "For example, the rule could foreclose emerging multicast arrangements for the efficient distribution of real-time, high-definition video to many different viewers simultaneously over the Internet."

AT&T also argues that any regulations should apply to all online "information service providers," including search engines, which "play a gatekeeper role that substantially influences consumers' Internet experiences."

The company specifically names Google, saying that it "shapes how consumers actually experience the Internet more than any given broadband provider possibly could."

For its part, Google filed comments supporting the FCC's proposed rules, including a proposal that would ban prioritization deals. "Paid prioritization opens the door to broadband providers picking winners and losers in the market," Google writes. "While broadband providers' own services and incumbent players who can afford to pay will get access to a special 'fast lane,' start-up innovators, small businesses, non-profits, individual users, and many other players will be effectively consigned to the 'slow lane.' "

Google also argued that the principles set out in the 2005 policy statement should be codified -- pointing out that their legal status is uncertain. The FCC sanctioned Comcast in 2008 for violating neutrality principles by throttling peer-to-peer traffic, but Comcast appealed, arguing that the FCC has no authority to enforce principles that have never been codified. An appellate court recently heard arguments in the case, but has not yet issued a decision.

In addition to its own filing, Google also filed a joint letter with the telecom Verizon, in which the companies outlined areas of agreement. "It is essential that the Internet remains an unrestricted and open platform, where people can access the lawful content, services, and applications of their choice," the companies said. "To us, this means that when a person accesses the Internet, he or she should be able to connect with any other person that he or she wants to -- and that other person should be able to receive his or her message."

1 comment about "FCC Urged To Preserve Internet 'Payola' Ban ".
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  1. Brett Glass from LARIAT, January 17, 2010 at 12:12 p.m.

    Tim Wu is being disingenuous when he claims that paying for higher network speeds or priority delivery of data is akin to "payola." First of all, these services are offered openly in an upfront manner; they're not a "back room deal" like the shady deals between record companies and radio stations. Secondly, unlike radio, the Web has an essentially infinite number of "stations." Paying for faster delivery of some particular piece of Internet content isn't akin to paying for control of one of the few licensed radio stations in town. And finally, such acceleration of Web content is done all the time by companies called "content delivery networks," or CDNs, which bypass the usual Internet "cloud" to deliver content more quickly to ISPs or even put servers that host it at the hubs of the ISPs' networks. (Some might claim that doing this is not equivalent to giving the content providers priority on the ISPs' "last mile" networks -- a practice which the FCC has proposed to ban -- but this is not technically correct. Because the Internet's TCP protocol allows faster acceleration of connections where the two sides can communicate with one another with less delay -- lower latency -- this gives the content priority on the last mile as well.)

    In short, Wu is using a "hot button" term -- and an intentionally misleading analogy -- to push for unwise and harmful regulation of the Internet.

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