Hijacking net neutrality

Quick, what do Amazon, Netflix, Microsoft, Yahoo, Cogent, Level 3, Google, Facebook and Vonnage all have in common? Among other things, they all pump a lot of data onto last-mile broadband networks and they could all afford to pay for a fast lane, if necessary.

They also all apparently realize that would put a great, big target on their backs should ISPs decide the time has come to start charging “commercially reasonable” tolls to ensure quality-of-service over the last mile.

That’s the main reason they were also all signatories on a letter sent this week to the Federal Communications Commission urging the agency not to include language to permit such gate-keeping in its revamped net neutrality regulations:

According to recent news reports, the Commission intends to propose rules that would enable phone and cable Internet service providers to discriminate both technically and financially against Internet companies and to impose new tolls on them. If these reports are correct, this represents a grave threat to the Internet.

Well, a grave threat to Netflix’s and Google’s bottom lines in any case. For all the hue and cry over the prospect of fast lanes on the internet for the few and “dirt roads” for the rest, the truth is, no one wants to pay for a fast lane, even if they are able to. It’s bad for business.

The problem for Netflix is that if Amazon were to decide to pay for a fast lane for Prime Instant Video Netflix, too, would feel compelled to pay for competitive reasons. What those companies are really asking in their letter to the FCC is for the agency to save them all from a business version of the prisoner’s dilemma: Don’t make us choose between our individual interests and our shared interests.

The good news for Netflix, et. al., is that FCC chairman Tom Wheeler’s effort to fast-track the new rules seems to have gone off the rails. All four of his fellow commissioners have expressed serious doubts about the proposal and one of his fellow Democrats on the commission, Jessica Rosenworcel has asked him to postpone a planned vote on the proposal scheduled for May 15th. On Thursday the FCC confirmed that the vote remains on the agenda for the agency’s May 15th monthly meeting, but as of right now, Wheeler doesn’t appear to have a majority to get it through.

Regardless of what happens with next week’s vote, however, it’s really the whole net neutrality debate that’s gone off the rails. As evident from the Netflix, et. al. letter, the debate has devolved into an argument between the big and the bigger over the price of throughput.  And Wheeler has allowed the FCC to get trapped into refereeing among the vested commercial interests rather than promoting and protecting the public interest (more or less the definition of regulatory capture). It’s hard to see what the public interest is in the rate that Amazon or Netflix is able to negotiate with Comcast for a fast lane.

In fairness, Wheeler is fairly constrained in what he can do by the limited authority left to him by the court ruling throwing out the old net neutrality rules. But he could lose those constraints by reclassifying broadband as a telecommunications service under Title II of the Communications Act, which would give the FCC much greater authority to regulate, as many net neutrality proponents have repeatedly urged him to do (and which Wheeler, to his credit, says is still on the table).

I’ve been skeptical that reclassification is the way to go because it could provoke such a monumental political fight that anything useful happening on the net neutrality front could be delayed for years. But if the only alternative is to limit the public’s interest in the most important communications network of our time to refereeing between Netflix and Comcast, perhaps it’s time to take on the fight.

 

 

Relevant Analyst
Sweeting

Paul Sweeting

Principal Concurrent Media Strategies

Do you want to speak with Paul Sweeting about this topic?

Learn More
You must be logged in to post a comment.

No Comments Subscribers to comment

Latest Research

Latest Webinars

Want to conduct your own Webinar?
Learn More

Learn about our services or Contact us: Email / 800-906-8098