FCC: Paid Prioritization Likely Violates Neutrality Rules

GavelExpanding on its recent net neutrality vote, the Federal Communications Commission said late last week that many types of paid prioritization agreements likely would violate the new regulations.

Deals for fast-lane treatment by providers "could raise significant cause for concern," the FCC said in its full order.

 

The rules, which passed by a 3-2 vote last week, prohibit broadband providers from engaging in unreasonable discrimination. While the rules as voted on last week did not appear to impose a blanket ban on paid prioritization, Chairman Julius Genachowski said at the time that many such arrangements could be considered unreasonable.

Late last week, the FCC released the entire 194-page order, which expands on the vote. In that document, the agency offered several reasons why it would look unfavorably on paid prioritization deals.

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For one, the FCC said, prioritization deals marked a "departure from longstanding norms" that could "cause great harm to innovation and investment in and on the Internet."

In addition, the FCC wrote, "pay-for-priority arrangements may particularly harm non-commercial end users, including individual bloggers, libraries, schools, advocacy organizations, and other speakers, especially those who communicate through video or other content sensitive to network congestion."

The full text of the order also reiterated that broadband providers may implement pay-per-byte pricing. "Prohibiting tiered or usage-based pricing and requiring all subscribers to pay the same amount for broadband service, regardless of the performance or usage of the service, would force lighter end users of the network to subsidize heavier end users," the FCC stated. "It would also foreclose practices that may appropriately align incentives to encourage efficient use of networks."

The rules will almost certainly face a court challenge from broadband providers, who argue that the FCC exceeded its authority by attempting to regulate Internet traffic. An appellate court said earlier this year that the FCC lacks authority to enforce neutrality principles because the agency previously classified broadband as a Title I information service, and not a Title II telecommunications service. The FCC solicited comments earlier this year about whether to reclassify broadband access as a telecommunications service, but hasn't yet moved to do so.

4 comments about "FCC: Paid Prioritization Likely Violates Neutrality Rules".
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  1. Robert Repas from Machine Design Magazine, December 28, 2010 at 9:28 a.m.

    Paid prioritization is just a fancy way of saying bribery. Contracts should be let for a set level of service, both speed and capacity. The Internet service provider should be held accountable for their quality of service, the same as any service provider. If I contract for 12, 45, or 100 Mbps service, I expect to receive that level of service. Any intentional slowing of that speed would be a violation of the service contract. If they can't deliver what they contracted, then that constitutes fraud on their part.

  2. John Jainschigg from World2Worlds, Inc., December 28, 2010 at 10:53 a.m.

    I agree with the FCC. The Internet was founded on and built around the notion of carriers having zero insight into content, offering simple service tiers based on continuous edge-network capacity, providing best-effort service everywhere, and using overprovisioning as the go-to tool for solving problems of congestion -- in those few cases where applications cannot solve these problems for themselves (e.g., by caching).

    Virtually everything we like about the internet -- including the internet's ability to disrupt entrenched industries and replace them with more agile, consumer-friendly and sensible models -- depends on this. Do you like making calls worldwide for free on Skype? Do you yearn for the time (soon, soon) when you can use 4G VoIP or WiFi to make and receive Skype calls on your mobile, and then, forever after, buy ZERO minutes per month from your wireless carrier and NEVER again worry about suddenly starting to drop 40 cents per minute because you've gone over your limit and oh, gee, they just don't seem to be able to program their computers to automatically charge you the next tier up for the next 30 days? Do you like watching TV shows on Hulu and movies on Netflix or do you prefer the sick feeling of constantly being ripped-off and exploited and milked by de-facto service monopolies?

    Paid prioritization, application-based service tiers and all that stuff is straight-up, extortionary corporate bad behavior, whose object is to create a framework of artificial scarcity to rationalize escalating prices and tolls around the bandwidth commons. That commons could be doubled in capacity perpetually for a quarter or less than what carriers will happily milk from you while grudgingly increasing capacity at a quarter the rate -- empowered to do so by the prioritization schemes that shift usage, enabling them to make 80% of their money from their richest customers and giving poor folks 'email grade' service in the basic tier.

    Consumers -- businesses and individuals who use the internet -- should send a clear message here: that while we must as a society be willing to subsidize the actual cost of building out edge-network (and, as necessary, backbone) fiber and router capacity to insure robust overprovisioning and consequent highly-functional best-effort service and high access speeds everywhere, we will, by the same token, not tolerate an internet that mazes us with complex and ever-growing charges.

  3. Amy Fanter from Odds On Promotions, December 29, 2010 at 5:58 p.m.

    Listen, if I want to pay for a faster connection, it should be my right to do so and a company's right to sell it to me.
    If a company does a large amount of business with me and I choose to offer a discount, that is my right.

    This net neutrality stuff is a load. I hope the next congress put this agency back in its place before it ruins the greatest free market on earth.

  4. Amy Fanter from Odds On Promotions, December 30, 2010 at 2:09 p.m.

    Robert - let me clarify where I stand ---

    The FCC has no business being involved. Providers built the pipes - not Google which uses it's profits to line the pockets of democrats. Let me ask you, are you OK with the FCC dominating regulating, and micro-managing the Internet? Really?

    Reason Magazine’s Peter Suderman: “ISPs aren’t perfect, but at least they’re subject to market pressures. The government on the other hand is subject primarily to political pressures. Most of the impetus for Net Neutrality is a result of political pressure – big influential actors pushing the government to do what they want, to protect their business models.”

    Let the market do its job -- it has a wonderful way of working things out to everyone's advantage.

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