Once rules go, what will change for con­sumers?

The gov­ern­ment plan opens the door for com­pa­nies to charge dif­fer­ent rates for dif­fer­ent speeds, have less reg­u­la­tion and cut some cus­tomer pro­tec­tions

The Mercury News Weekend - - BUSINESS + TECHNOLOGY - By Tali Arbel

NEWYORK » The Fed­eral Com­mu­ni­ca­tions Com­mis­sion for­mally re­leased a draft of its plan to kill net-neu­tral­ity rules , which equal­ized ac­cess to the in­ter­net and pre­vented broad­band providers from fa­vor­ing their own apps and ser­vices.

Now the ques­tion is: What comes next?

‘Rad­i­cal de­par­ture’

The FCC’s move will al­low com­pa­nies like Com­cast, AT& T and Ver­i­zon to charge in­ter­net com­pa­nies for speed­ier ac­cess to con­sumers and to block out­side ser­vices they don’t like. The change also axes a host of con­sumer pro­tec­tions, in­clud­ing pri­vacy re­quire­ments and rules bar­ring un­fair prac­tices that gave con­sumers an av­enue to pur­sue com­plaints about price goug­ing.

FCC Chair­man Ajit Pai says his plan elim­i­nates un­nec­es­sary reg­u­la­tion. But­many worry that his pro­posal will sti­fle small tech firms and leave or­di­nary cit­i­zens more at the mercy of cable and wire­less com­pa­nies.

“It­would be a rad­i­cal de­par­ture from what pre­vi­ous (FCC) chairs, of both par­ties, have done,” said Gigi Sohn, a for­mer ad­viser to Tom Wheeler,

the Obama- era FCC chair­man who en­acted the net neu­tral­ity rules now be­ing over­turned. “It would leave con­sumers and com­pe­ti­tion com­pletely un­pro­tected.”

Dur­ing the last Repub­li­can ad­min­is­tra­tion, that of Ge­orge W. Bush, FCC pol­icy held that peo­ple should be able to see what they want on the in­ter­net and to use the ser­vices they pre­ferred. But at­tempts to en­shrine that net-neu­tral­ity prin­ci­ple in reg­u­la­tion never held up in court — at least un­til-Wheeler pushed through the cur­rent rules now slated for ter­mi­na­tion.

Pai’s pro­pos­als stand a good chance of en­act­ment at the next FCC-meet­ing in De­cem­ber. But there will be law­suits to chal­lenge them.

More de­tails

The for­mal pro­posal re­veals more de­tails of the plan than were in the FCC’s Tues­day press re­lease. For in­stance, if com­pa­nies like Com­cast, AT&T and Ver­i­zon de­cide to block a par­tic­u­lar app, throt­tle data speeds for a ri­val ser­vice or of­fer faster speeds to com­pa­nies who pay for it, they merely need to dis­close their poli­cies for do­ing so.

The FCC also says it will pre- empt state rules on pri­vacy and net neu­tral­ity that con­tra­dict its ap­proach. Ver­i­zon has noted that New York has sev­eral pri­vacy bills pend­ing , and that the Cal i for­nia leg­is­la­ture has sug­gested com­ing up with its own ver­sion of net neu­tral­ity rules should the fed­eral ver­sions per­ish.

The plan would leave com­plaints about de­cep­tive be­hav­ior and mon­i­tor pri­vacy to the Fed­eral Trade Com­mis­sion, which al­ready reg­u­lates pri­vacy for in­ter­net com­pa­nies like Google and Face­book.

Best be­hav­ior

Broad­band providers are promis­ing to be on their best be­hav­ior. Com­cast said it doesn’t and won’t block, throt­tle or dis­crim­i­nate against law­ful con­tent. AT& T said that “all ma­jor ISPs have pub­licly com­mit­ted to pre­serv­ing an open in­ter­net” and that any ISP “fool­ish” enough to ma­nip­u­late what’s avail­able on­line for cus­tomers will be “quickly and de­ci­sively called out.” Ver­i­zon said that “users should be able to ac­cess the in­ter­net when, where, and how they choose.”

Some crit­ics don’t put much weight on those prom­ises, not­ing that many providers have pre­vi­ously used their net­works to dis­ad­van­tage ri­vals. For ex­am­ple, the As­so­ci­ated Press in 2007 found Com­cast was block­ing some file-shar­ing. AT& T blocked Skype and other in­ter­net call­ing ser­vices on its net­work on the iPhone un­til 2009.

But oth­ers sug­gest fear of a pub­lic up­roar will help re­strain egre­gious prac­tices such as block­ing and throt­tling. “I’m not sure there’s any ben­e­fit to them do­ing that,” said Sohn. “It’s just go­ing to get peo­ple an­gry at them for no good rea­son. They don’t mon­e­tize that.”

Fast lanes, slow lanes

Sohn, how­ever, sug­gests there’s rea­son to worry about more sub­tle forms of dis­crim­i­na­tion, such as “paid pri­or­i­ti­za­tion.” That’s a term for in­ter­net “fast lanes,” where com­pa­nies that can af­ford it­would pay AT&T, Ver­i­zon and Com­cast for faster or bet­ter ac­cess to con­sumers.

That would leave star­tups and in­sti­tu­tions that aren’t flush with cash, like li­braries or schools, rel­e­gated to slower ser­vice, said Co­rynne McSherry, le­gal di­rec­tor at the Elec­tronic Fron­tier Foun­da­tion, a dig­i­tal-rights group. In turn, star­tups would find it harder to at­tract in­vestors, Sohn said.

Michael Cheah, gen­eral coun­sel of the video startup Vimeo, said broad- band com­pa­nies will try to lay ground­work for a twotiered in­ter­net— one where cash- strapped com­pa­nies and ser­vices are rel­e­gated to the slow lane. To stay com­pet­i­tive, small com­pa­nies would need to pony up for fast lanes if they could — but those costs would ul­ti­mately find their way to con­sumers.

The view is dif­fer­ent at the In­for­ma­tion Tech­nol­ogy and In­no­va­tion Foun­da­tion, a Wash­ing­ton, D.C., think tank funded by Google and other es­tab­lished tech com­pa­nies. Doug Brake, a tele­com pol­icy an­a­lyst at the foun­da­tion, said there’s lit­tle chance broad­band com­pa­nies will en­gage in “shenani­gans,” given how un­pop­u­lar they al­ready are with the pub­lic.

Brake like­wise played down the threat of in­ter­net fast lanes, ar­gu­ing that they’ll only be use­ful in lim­ited sit­u­a­tions such as high- qual­ity tele­con­fer­enc­ing. Like the FCC, he ar­gued that an­titrust law can serve to de­ter “po­ten­tially an­ti­com­pet­i­tive” be­hav­ior by in­ter­net providers.


The Fed­eral Com­mu­ni­ca­tions Com­mis­sion is ex­pected to roll back reg­u­la­tions in a move that would give in­ter­net providers more con­trol over cus­tomers’ ac­cess.


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