Commentary

Microsoft: FCC's Fast-Lane Proposal Could Lead To Billion-Dollar Losses For Business

Weighing in against the Federal Communications Commission's proposed broadband regulations, Microsoft is warning that the agency's proposal for fast lanes could have a devastating impact on companies that rely on broadband to reach consumers.

“Preferential transmission arrangements are incompatible with the fundamental principles of an open Internet,” the company says in comments filed today with the FCC.  “Such arrangements would have the effect of pressuring content providers, application developers, service providers, and device manufacturers to enter into contractual arrangements with broadband access providers in order to effectively reach consumers.”

Microsoft says that companies would feel obligated to do so because “even seemingly small differences in performance -- such as millisecond delays in search engine response times ... more frequent “buffering” for streaming music and video services, and more frequent dropped or poor-quality VoIP calls -- have a substantial effect on how consumers access and use edge services.”

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Microsoft adds that its own research had found that a delay in loading search results of only 100 milliseconds can translate into a 0.6% annual revenue loss. “In a single year, that difference of a mere tenth of a second can amount to billions of dollars across a range of content providers, application developers, service providers, and device manufacturers,” Microsoft writes.

Microsoft is responding to the FCC's proposed broadband regulations, which would prohibit providers from blocking content, but allow them to charge companies extra for speedy delivery.

Microsoft isn't alone in opposing the FCC's proposal. Numerous other Web companies (as well as consumer advocates) argue that allowing paid fast lanes will fundamentally change the open nature of the Internet. Netflix, which has had some well-publicized disputes disputes with broadband providers, is among the most strident opponents of the FCC's proposal.

The video company argues in its FCC filing that no regulations at all are preferable to the rules that will endorse discrimination

“The Internet is at a crossroads. Down one road ... is an Internet that looks more like cable TV, one characterized by legalized discrimination, carriage disputes, gamesmanship, and content blackouts which harms consumers,” Netflix writes. “Down another road is a scalable, more affordable, and open Internet.

As of this afternoon, more than one million comments have been submitted to the FCC about its proposed net neutrality rules, marking a new record for the agency. The agency is accepting comments until midnight tonight.

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