FCC’s New New Net Neutrality Compromise Is Better

The Federal Communications Commission today said it would vote on rules to prevent ISPs from discriminating against the bits flowing across their networks, but it wouldn’t publish the full text of those rules until a few days after its open meeting tomorrow. The delay is a result of the FCC compromise with Democratic commissioners who have said they’d rather sink the network neutrality rules than vote for a bad plan having to address any dissenting views from the commissioners in the order. While the changes outlined in a call today with senior FCC officials are an improvement over the ones proposed three weeks ago by Chairman Julius Genachowski, it’s not clear yet if it will result in a Merry Christmas for content and application providers.

In the call, the two officials laid out the tweaks to the plan, of which the major aspect is that it will make the distinction that broadband is an access service as opposed to an information service. This is a subtle distinction, presumably designed to keep the FCC clear that it’s trying to regulate access to the web as opposed to the web itself. For more on this thinking, check out this post on net neutrality. The FCC also will endeavor to apply that same standard — that broadband is the service that allows someone to go wherever they want on the web — to future forms of access.

By regulating the access, the FCC hopes to create loopholes in the wireline net neutrality rules that will prevent ISPs from using their own managed services offered to subscribers to circumvent the idea of an open Internet as I laid out in this post. It’s also where the FCC will address issues of paid prioritization where an ISP might charge companies like Google (s goog) for faster delivery of its content to the ISP’s end subscribers.

Other protections in this order are a “robust transparency requirements for wireline and wireless networks,” and a rule preventing both wireless and wireline carriers from blocking websites. On the wireless business the focus will be on preventing mobile operators from blocking services that compete with their own voice or video services, while the wireline rules seek to prevent the blocking of all lawful content. There will be a prohibition against “unreasonable discrimination” on wireline networks as well.

And since rules are only as good as their enforcement, the FCC is proposing that complaints on network neutrality issues (it’s unclear if this means all complaints or only a subset of complaints) will go through a faster decision-making period it calls the “Rocket Docket.” Complaints that are allowed to go through this process are decided up to 105 or 130 days after being accepted to the accelerated process. The FCC will also have the power to set fines and order parties to stop violators of these rules.

As for tiered pricing, the FCC is willing to see if usage-based broadband can be implemented in a consumer friendly manner, and the senior officials both said that the cat fight between Comcast (s cmsca) and Level 3 (s lvlt) is a peering issue as opposed to a net neutrality issue and thus, isn’t addressed in this order. And therein is the crux of the problem for this network neutrality plan and really, the FCC. Network neutrality will help some parties, especially large application providers, continue to innovate and deliver web services to consumers, but the lack of competition is the problem and even under this somewhat stronger plan there will be loopholes for service providers to slip through and little recourse for the customer to get the broadband service they’d like at a price that’s competitive.

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