Net Neutrality: Latest Proposal Will Make Everybody Unhappy
In the latest net neutrality proposal, the Federal Communications Commission has reportedly cooked up an idea guaranteed to unite both net neutrality advocates and carriers: They're both going to hate it.
Federal Communications Commission (FCC) head Tom Wheeler is considering a plan to split the Internet, separating the "back-end" connection between carriers and content providers from the "retail" connections between carriers and consumers, according to a report on the Wall Street Journal late Thursday. The FCC would require net neutrality on the back end, classifying it as common carrier, but leave carriers free to cut special deals with consumers.
The proposal would give the FCC authority to police deals between content companies like Netflix Inc. (Nasdaq: NFLX) and broadband providers. Says the Journal:
The proposal would leave the door open for broadband providers to offer specialized services for, say, videogamers or online video providers, which require a particularly large amount of bandwidth. The proposal would also allow the commission to explore usage-based pricing at some point, in which consumers are charged based on how much data they use and companies are able to subsidize traffic to their websites or applications.
While the FCC still believes there should be room for such deals, its latest plan would shift the burden to the broadband providers to prove that the arrangements would be beneficial to consumers and equally available to any company that would like to participate. FCC officials believe reclassification would put them on much stronger legal footing to block such deals when they are anticompetitive.
Carriers, which have resisted any kind of net neutrality regulation, are going to hate this proposal. So will net neutrality advocates, who want to regulate the Internet end to end.
The proposal as described by the Journal has at least three big unanswered questions:
Would this proposal apply to the wired Internet only, or would it also apply to wireless connectivity? The consumer Internet is increasingly becoming a wireless network.
The Journal article talks about the connection to the customer as a "retail" connection. What kind of effect would this proposal have on business Internet customers?
Would carriers and content providers be allowed to cut deals to provide subsidized connections to consumers where, for example, Facebook pays to allow consumers to connect to Facebook (and only Facebook) for free?
It's difficult to see where this proposal makes sense. Why discriminate between the two ends of Internet connections? It doesn't even make sense politically; carriers aren't going to like this any more than they've liked any other proposal for net neutrality and net neutrality advocates have already started opposition. Either regulate the whole Internet, or none at all.