The FCC Pleases No One

On Tuesday, the Federal Communications Commission voted to approve new rules for "net neutrality." And as a compromise between net neutrality activists, conservatives and telecommunication companies, the rules don't seem to satisfy anyone.

For wired internet, the new rules maintain the status quo. Cable and DSL providers can't meter your internet access, and have to let you use the applications, online services, and devices you want, regardless of how they affect the network. Verizon, for example, can't charge you more for streaming videos from Hulu, or increase your internet speed if you choose to watch YouTube instead. What's more, broadband providers are required to provide network performance updates to consumers, as well as tell them how they manage network congestion.

For wireless internet, the new rules are a little different. While mobile providers can't restrict services that compete with their core products (voice applications, like Skype, for instance), the FCC will permit discrimination among types of content. So, for example, AT&T can't keep a text message application off of its phones, but can restrict a music streaming service, like Pandora. Under the agreement, wireless companies will be free to block applications from their networks, but the FCC reserves the right to investigate if problems emerge. If AT&T wants to charge you extra for watching video on your phone, they can do that. And if they want to block Netflix, and restrict you to an official AT&T video player, they can do that too.

Net neutrality advocates are disappointed; they point to the wireless agreement and loopholes in broadband regulations as evidence that this decision grossly privileges broadband providers. For instance, the rules exempt "managed services" offered by broadband carriers. In other words, carrier-provided email and music services can live on faster connections than their unaffiliated counterparts. "The compromise fails to protect users of the wireless web," says Craig Aaron, managing director of Free Press, a media reform nonprofit. "The FCC has not provided consumer protection from [content] discrimination, opening the door for AT&T and Verizon to block websites for users. " He is worried that this is the first step toward creating fast and slow lanes on the internet, where wealthy users can access the full internet, and less advantage users are forced to settle with less.

Likewise, in a recent Senate floor speech, Minnesota Senator Al Franken -- who has called net neutrality the "free speech issue of our time" -- warned colleagues that the rules are dangerous to free expression, "If corporations are allowed to prioritize content on the Internet, or they are allowed to block applications you access on your iPhone, there is nothing to prevent those same corporations from censoring political speech."

Net neutrality advocates aren't alone in their disappointment. Opponents are close to furious over the FCC's broader decision to involve itself in internet regulation. In the Wall Street Journal, Republican FCC Commissioner Robert McDowell called net neutrality a "threat to internet freedom," and critiqued the new rules, "Nothing is broken that needs fixing" and asking why the existing consumer protection laws were not enough. More mild-mannered critics, like the Cato Institute's Julian Sanchez, has a similar take, "For those of us who are wary of the FCC asserting the authority to start dictating network architecture, even the diluted version of neutrality they're moving forward with sets a bad precedent."

Even telecoms are wary of the new rules. Verizon is reportedly mulling a lawsuit against the FCC. And indeed, it's not clear that the FCC has the authority to enforce its decision. In April, the D.C. Circuit Court struck down the Commission's authority to regulate broadband internet service. For these rules, the FCC is relying on a set of provisions drawn from the 1996 Telecommunications Act, which it insists it can defend in court. However, even supporters of the FCC's regulatory power are skeptical, "We think the whole thing rests on a really weak legal theory," says Aaron.

None of this is to say that the new regulations lack supporters. Trade associations, like the Telecommunications Industry Association, have positive words for the deal. And some digital rights groups, like the Center for Democracy and Technology,, see it as a positive first step on the road to more comprehensive rules. "This is how we make progress on policy, one step at a time, each step building on the one before it," says CDT senior policy counsel, David Sohn. "This isn't the end of the Internet neutrality debate, it's just the end of the beginning."

The political implications of this are pretty straightforward: these regulations will let President Obama to say that he fulfilled his campaign pledge to maintain the open internet. That said, given the tremendous criticism from all sides -- and the rules themselves -- it's hard to agree.

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