FCC chief said to push Net-as-utility regulations
The chairman of the Federal Communications Commission this week is expected to propose regulating Internet service like a public utility, according to industry analysts, lobbyists and former FCC staff members.
The proposal would reclassify high-speed Internet as a telecommunications service, instead of an information service, under Title II of the Communications Act.
Analysts and others say the change, which has been pushed by President Barack Obama, would give the commission legal authority to ensure that no content is blocked and no so-called payto-play fast lanes exist — prohibitions that are hallmarks of the open Internet or net neutrality concept.
But FCC Chairman Tom Wheeler will advocate a light-touch approach to Title II, they say, shunning the more intrusive aspects of utility-style regulation, such as meddling in pricing decisions. He may also suggest putting wireless data services under Title II and adding regulations for companies that manage the backbone of the Internet.
The proposal is expected to be submitted to the agency’s commissioners by Thursday. The FCC is not expected to release a copy of the plan this week. A vote on the proposal by the full commission is scheduled for Feb. 26.
Maneuvering in Washington over the proposal has already started. Congressional
Republicans have proposed net neutrality legislation that bans content blocking and fast and slow lanes, but it also prevents the FCC from issuing regulations to achieve those goals.
The FCC proposal is Wheeler’s latest attempt to find a way to write open Internet rules that are politically palatable and that will stand up to legal scrutiny. Wheeler had initially proposed net neutrality rules that would not have classified Internet service providers as common carriers under Title II and that would have allowed cable and telecommunications companies to strike deals with content companies and online services as long as they were “commercially reasonable.”
That approach brought a flood of comments from critics who said it would open the door to fast lanes on the Internet for deep-pocketed companies and slow lanes for everyone else.
Then, in November, Obama took the unusual step of weighing in. He called on the FCC to adopt the “strongest possible rules” on net neutrality, and specifically to classify high-speed broadband service as a utility under Title II. “For most Americans, the Internet has become an essential part of everyday communication and everyday life,” he said.
That changed the political calculus for Wheeler, even though the FCC is an independent agency. On most key votes, the five-member commission votes 3-2, with Wheeler joined by the other two Democrats.
“The moment Obama issued that statement, it meant the FCC was going to adopt a Title II rule,” said Kevin Werbach, a former FCC counsel and an associate professor at the Wharton School of the University of Pennsylvania.
The industry response to Obama’s declaration was swift and divided. The Internet Association, whose members include Amazon, Facebook, Google and Netflix, applauded Obama and urged the FCC to follow his lead to “ensure a free and open Internet.”
Major Internet service providers such as Comcast and AT&T protested and said utility-style regulation would threaten their investments in faster broadband service, ultimately harming consumers.
Tim Wu, a professor at Columbia Law School, said he sees the strong rules the FCC is moving toward as a way to safeguard the norm of equal treatment of content on the Internet, rather than viewing them as a threat.
“And the norm — no fast lanes — has worked awfully well,” said Wu, who is credited with coining the term “net neutrality.”
“The reality,” he said, “is that we’ve seen startups in San Francisco, New York and across the country build new businesses on the Internet.”
Most of the focus of net neutrality has been on the broadband gateway into households. But Wheeler, according to industry experts and lobbyists, will probably also take up the issue of those who handle Internet content before it makes its way to consumer devices.
Those Internet backbone companies that shuttle data and video across the country are unseen by consumers. But the behavior and treatment of companies that operate in the so-called interconnect market affect the user’s experience.
How smoothly a Netflix video stream of House of Cards plays on a subscriber’s screen, for example, reflects the performance of all the network operators that have transported the digital bits of that program.
Those networks hand off their data payloads to the Internet service providers. The handoff arrangements are private business deals. But industry experts and lobbyists say the FCC wants to deter content blocking or discrimination in that market, as well.
“If you prohibit paid fast lanes by the Internet service providers themselves, you want to make sure fast lanes aren’t just moving up and being created in the interconnect market,” Wu said.