Commentary

Will FCC, Web Players Forge Toothless Neutrality Deal?

The Federal Communications Commission, Internet service providers and Web companies "made new progress" on Saturday toward striking a deal about net neutrality, according to a report by industry analysts Stifel Nicolaus.

The report says that the players have reached a "general agreement on some principles," but no consensus on a few critical issues, including whether wireless service would also be subject to neutrality principles.

Present at the meeting on Saturday were representatives from Google, Skype, Verizon, AT&T, the National Cable & Telecommunications Association and the Open Internet Coalition (which includes Amazon, eBay and Netflix), as well as FCC officials.

Stifel Nicolaus says that if all parties can reach a consensus -- including an agreement that Internet service providers won't degrade or prioritize particular material -- the FCC might back away from its plan to reclassify broadband access as a "Title II" telecommunications service.

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On the one hand, if the parties can come to an agreement that avoids protracted rule-making -- and the litigation that's certain to follow -- the move could potentially benefit everyone. On the other, as Free Press and others argue, a deal arrived at through private talks might not go very far toward protecting the openness of the Internet.

Another problem with the private deal approach is that the FCC might not be able to enforce such an agreement unless it also reclassifies broadband access as a Title II telecommunications service. That's because a federal appellate court recently ruled that the FCC lacks the power to enforce neutrality principles because broadband is considered an information service and not a telecommunications service.

In other words, the current round of talks could produce an agreement, but not one that could be enforced in court. Instead, ISPs would pretty much be left to self-regulate.

Given the history here, including prior instances of traffic-throttling by ISPs, the FCC shouldn't abandon plans to reclassify broadband service without something more solid than a promise for future self-regulation.

1 comment about "Will FCC, Web Players Forge Toothless Neutrality Deal?".
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  1. David Weller, August 3, 2010 at 8:48 p.m.

    Curious.. what's to stop Comcast and TWC from creating tiered broadband plans with various bandwidth caps and then excluding their owm material (streamed via their TV Everywhere package) from counting toward the monthly cap?

    In other words, $60 a month might get TWC customers 20GB monthly bandwidth usage. Anything they stream from TWC's TV Everywhere service is "free", but anything streamed from an OTT service like Netflix counts toward bandwidth usage. If customers want more bandwidth (and you need a lot for HD TV), then move up a tier and pay, say, $100 for 200Gb.

    Comcast/TWC could say, "Well we can't charge a monthly fee for TV Everywhere AND charge for the additional bandwidth it uses because that would be like double dipping and "unfair" to the poor customer. But we sure can charge for other bandwidth use. Deal with it, Netflix". And so they create powerful financial incentives for sticking with their companies product.

    Would the FCC consider this throttling, degrading, or prioritizing material? Or is it just competitive "incentivizing"? If the latter, then consumers are going to lose by being forced to pay higher and higher broadband fees at a time when fair market competition should actually be pushing them lower.

    Sorry for the long comment. I'm not clear on the FCC's fuzzy wording and my concern is that broadband providers will play the "bandwidth cap" card for all it's worth. Especially since Comcast and TWC have both claimed to be focusing on their broadband services as their strongest sources of revenue, letting profits from that business make up for losses in their cable/programming side. Seems like the writing's on the wall and cosumers can expect to soon pay as much or more for streaming video as they do for cable now.

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