Thursday, February 26, 2015

FCC regulators approve tougher rules for Internet providers - Pittsburgh Post Gazette

By Deborah M. Todd / Pittsburgh Post-Gazette



After a years-long tug of war within the Federal Communications Commission, Thursday’s vote in favor of regulating broadband Internet under public utility laws came as a formality.


“For over a decade, the commission has endeavored to protect and promote the open Internet. FCC chairs and commissioners — Republicans and Democrats alike — have embraced the importance of the open Internet and the need to protect and promote that openness,” said FCC chairman Tom Wheeler in a statement following the vote.


“Today is the culmination of that effort, as we adopt the strongest possible open Internet protections,” the statement said.


The idea of regulating the Internet by using public utility laws, which has been floating around since at least May when the FCC voted on a proposal amending its 2010 Open Internet Order, reached new heights in November when President Barack Obama made a public plea to FCC commissioners to tie broadband Internet to existing telecommunications laws.


The plan aims to regulate broadband Internet under sections of Title II of the Communications Act and a portion of the Telecommunications Act. Services provided to Internet users, companies providing services through the Internet and mobile broadband are all now subject to regulation.


The new rules would prohibit Internet Service Providers (ISPs) from blocking legal content, apps or services; would prohibit throttling — slowing down services or apps — based on content; and would ban paid prioritization, which is the practice of creating so-called fast and slow lanes by charging for faster delivery.


ISPs would be allowed to conduct what is called “reasonable network management,” which takes the technical and engineering aspects of providing equitable broadband service into account and allows for some adjustments in how bandwith is allocated.


However, ISPs must not alter bandwith for commercial purposes under the guise of reasonable network management. The proposal also gives the FCC new authority to address complaints against service providers accused of breaking the new rules.


Data services such as Voice Over Internet Protocol (VoIP) and dedicated heart monitoring will not be subject to Title II oversight. The action also falls short of subjecting Internet Service Providers to tariffs, rate approval, unbundling or other forms of rate regulation; doesn’t require ISPs to contribute to the Universal Services Fund — which takes fees from telecommunications companies to expand access to their services to rural and low-income communities — and does not impose new taxes or fees on broadband service.


By the time that dozens of people had packed into the FCC’s open meeting at its Washington, D.C., headquarters Thursday, an expected 3-2 vote with Republican commissioners dissenting was practically set in stone. One of the final barriers to the FCC’s adoption of the rules crumbled on Tuesday when Senate Republicans abandoned a plan to present an alternative proposal for net neutrality or to pass any laws undoing FCC actions, according to The New York Times.


Mr. Wheeler, who applauded Mr. Pai and Mr. O’Rielly’s dissents as part and parcel of the democratic process, also delivered “a shout out” to more than 4 million people who barraged the commission with public comments. He saved his most enthusiastic accolades for those supporting the action.


“Today, history is being made by a majority of this commission as we vote for a fast, fair and open Internet,” he said.


In the Pittsburgh region, Internet entrepreneurs and industry insiders lauded the vote as an essential step toward preserving the Internet economy as Americans have come to know it.


Mike Matesic, CEO of Oakland-based business accelerator program Idea Foundry, said leaving the door open for Internet Service Providers to determine how bandwidth is distributed without any oversight could have left emerging businesses at the mercy of established companies.


“Not passing a bill would have been a huge blow to the free market system, competition and our quality of life,” Mr. Matesic said.


Chris Arnold, general counsel for Station Square gaming company Schell Games, said it was prudent to preserve the environment that allowed emerging startups such as Netflix to compete with and eventually overcome established juggernauts.


“If you take a look at the success stories of the last 20 years, companies that started very small were able to compete because they offered an experience superior to companies that already existed in the marketplace. The ability to compete with established companies would be diminished if you allowed [ISPs] to have that advantage,” he said.


Any sense of victory will be short-lived once consumers and ISPs begin to see negative effects of new regulations, warned Mr. Pai.


The commissioner said the proposal does not expressly prohibit new taxes and rate regulations, and leaves the door open for future commissions to take those actions.


He said new rules ultimately would force ISPs to spend additional resources on attorneys and accountants leading to “higher broadband prices, slower broadband speeds, less broadband deployment, less innovation and fewer options for American consumers.”


Jon Peha, a Carnegie Mellon University professor of engineering and public policy who was FCC chief technologist from 2008 to 2010, said he hopes the full proposal prohibits Internet Service Providers from being “gatekeepers” to Internet commerce but allows for the quality of service prior to the vote to continue. However, he also said it is difficult to rule out any concerns without a line-by-line assessment of the full proposal.


“Changing the FCC’s legal authority through Title II by itself doesn’t change anything. What matters is the details of the policy that haven’t been spelled out yet,” he said.


Given the slant of a recent letter issued to the FCC by AT&T, there’s a chance the vote will face at least one legal challenge with or without the full text of the proposal being available, said David Thaw, a University of Pittsburgh assistant professor of law and information science.


Despite the proposal’s ambiguity, the possibility of higher rates and even the chance that the FCC’s action will be thrown out in court, Mr. Arnold said the nation is better off having taken some kind of action in favor of regulation.


“There’s always risk of higher rates but what is the alternative? There’s also risk associated with monopoly and the stagnation of innovation,” he said. “To halt innovation is the highest risk you can take.”


Deborah M. Todd: Dtodd@post-gazette.com or 412-263-1652. Twitter: @deborahtodd.










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