FCC Start’s Overhaul of the Internet

whitehouseThe FCC today began the process for the most significant regulatory overhaul of the Internet in its nearly 30 year history, by categorizing broadband Internet access under a provision of the Telecommunications Act that gives the government virtually unlimited regulatory power—the same power the government has had over telephone companies for decades.

This is encouraging news, but it’s not time to celebrate. It seems unlikely the FCC’s re-classification will survive a legal challenge from the cable industry. And even if the classification is upheld, the new rules—which are still not available publicly—will probably do little to help the average consumer, because cable companies will still enjoy a de facto monopoly on residential broadband access, since the FCC specifically excluded “last-mile unbundling” from its order.

The new order also probably doesn’t create “net neutrality,” because content discrimination is allowed for “reasonable network management” purposes, and we don’t yet know what that means. True net neutrality would mean, for example, that your cell phone provider can’t make you pay more to use your phone as a hotspot, or that airlines can’t block you from using FaceTime on in-flight Wi-Fi. But it’s just not clear the FCC will go this far.

And, most critically, there are apparently no rules directly regulating peering, which is how ISPs connect to each other. The FCC has only said that the new rules will allow it to look at interconnection agreements on a case-by-case basis. That means, for example, that even though Comcast doesn’t block Netflix, it could still make Netflix pay through the nose to connect to its network. The ambiguity surrounding “reasonable network management” could end up being a very real source of liability for ISPs of all sizes.

In sum, today was probably a step in the right direction. But we’re still a long way away from net neutrality, and in the near term, it’s unlikely today’s action will have any impact on the speed, fairness, or openness of the Internet.

Dan Garon is a hosting industry veteran. His background spans law, policy, and product management. He holds his J.D., with High Distinction, from the University of Iowa College of Law, where his research focused on intellectual property and Internet law.