Backgrounder on ‘net neutrality’

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Times editorial board member Jon Healey explains the debate around the FCC’s proposed rules.

Source of this article: The Los Angeles Times, November 9, 1022

By Jon Healey

The Senate is expected to decide as early as Wednesday whether to throw out the Federal Communication Commission’s “net neutrality” rules before they go into effect Nov. 20. The stakes are high for the phone and cable companies that sell Internet access services, as well as the companies that offer content and services through the Internet.

To get a grip on the issue, it’s important to understand what prompted the FCC to act and what it’s actually done. First, however, let’s cover the basics.

What is “net neutrality”?

It’s a requirement that Internet service providers not block or interfere with their customers’ efforts to use the websites, applications and devices of their choice, provided that they’re not breaking the law. That means giving equal treatment to the data sent and received by similar websites and services.

Say my neighbor and I sign up for the same broadband service from Time Warner Cable, and I’m on Facebook one evening while he’s searching for bargains on EBay. The principle of net neutrality calls for Warner to send me data from Facebook no faster or slower than it sends data from EBay to my neighbor’s computer. The same would be true if both of us happened to be streaming videos or downloading e-books. And if I want to use an Internet phone service that competes with Warner’s, the cable company can’t stop me or sabotage the service.

That sounds like the way the Internet operates today.

That’s right. ISPs may give priority to time-sensitive traffic, such as Internet phone services or video streams, over data that isn’t disrupted by the occasional delay. But they don’t offer websites the chance to buy their way to the head of the data line. When there’s too much traffic on an ISP’s network, competing services suffer equally.

So what prompted regulators to act?

In the early days of broadband, top executives at some ISPs — notably AT&T, SBC and BellSouth (before they all merged under the AT&T brand) — said they wanted to make Internet calling services and popular websites pay extra to reach the ISPs’ customers. As then-SBC Chief Executive Ed Whitacre infamously told Business Week in November 2005, “[W]e and the cable companies have made an investment, and for a Google or Yahoo or Vonage or anybody to expect to use these pipes free is nuts.” Because Google, Yahoo and Vonage were already paying to connect their servers to the Internet, Whitacre was essentially calling on them to pay twice.

The FCC’s first response was rhetorical. In 2004, its Republican chairman, Michael Powell, gave a speech calling on broadband providers to preserve consumers’ freedom to visit the websites, run the applications and connect with the devices of their choice, as well as to know how much bandwidth they’re actually getting from their ISP. The following year the commission adopted a policy statement enshrining the four consumer freedoms outlined by Powell as “principles.”

So what’s the problem?

As it turns out, the policy statement wasn’t worth the paper it was printed on. In 2007, Comcast was discovered to be surreptitiously interfering with some uploads, prompting a complaint to the FCC. The commission, led by Republican Kevin Martin, fined Comcast and ordered it to be honest and forthcoming about how it managed its network.

Last year a federal court overruled the FCC, saying the commission had not proved that it had the authority to enforce its neutrality policy. By that time, however, the commission had already started developing formal rules built around Powell’s four freedoms, with a somewhat different statutory foundation. Martin’s successor as chairman, Democrat Julius Genachowski, added two new principles to the list: that ISPs not play favorites with the traffic on their networks, and that they disclose the techniques they use to reduce congestion.

In December, a sharply divided commission adopted a compromise set of rules that most of the major phone and cable companies publicly supported.

And those rules are?

They boil down to three basic requirements. ISPs can’t block legal sites, applications, services or devices. They must disclose how they manage their networks. And they can’t discriminate “unreasonably” as they transmit data to and from lawful sites and services. But the rules don’t specify what unreasonable discrimination would be, leaving that to be decided by the commission in response to complaints from consumers and Web-based companies. Most of the rules don’t apply to mobile broadband networks, leaving them free to prioritize traffic and block any service or application, except for those that compete with their phone services.

So now what’s the problem?

Critics of the rules say they still interfere unnecessarily with ISPs’ ability to ease congestion and develop new revenue streams. Meeting the ever-growing demand for bandwidth is expensive, and if ISPs can’t charge content and service providers, they’ll raise prices. Some also argue that the uncertainty caused by the rules will deter investment in broadband pipes.

Supporters counter that technological advances are steadily lowering the cost of supplying bandwidth. If ISPs are allowed to charge sites or services to deliver their data — for instance, by creating “fast lanes” on their networks that take priority over other traffic — upstarts, innovators and noncommercial users will have trouble competing with major brands, Hollywood studios and other deep-pocketed interests.

In essence, the debate boils down to a question of what freedom online is most worth preserving: the freedom from regulation, or the freedom from interference by ISPs.

Where does the situation stand?

Congressional Republicans, who’ve made it a priority to repeal regulations adopted by the Obama administration, are trying to overturn the FCC’s action through a legislative technique known as a resolution of disapproval. The House passed such a resolution in April on a largely party-line vote; the Senate is next. However, even if it attracts enough Democratic votes to pass, it’s likely to be vetoed by President Obama, who advocated net neutrality in his 2008 campaign.

A more significant challenge to the rules will come in court, where they are under attack from both flanks. Verizon and MetroPCS, which sells prepaid cellphone service, have sued to block the rules, arguing that the FCC exceeded its legal authority. Liberal advocacy group Free Press has sued too, claiming the exemption for mobile networks was arbitrary and capricious. So even if the rules get past Congress, as expected, they could be thrown out by a federal judge.

Jon Healey is on the editorial board of The Times.