Chronic Over-Regulation: Get Ready For Net Neutrality

May 11, 2010
A discussion about the FCC's proposed 3rd way to implement net neutrality and its potential impact on broadband expansion and the electronics industry.

It looks like you’re going to get net neutrality whether you want it or not—and whether or not you really know what it is. You may not understand it, but that doesn’t mean it won’t hurt you. And if you work in the electronics business, it eventually will hurt you.

The Federal Communications Commission (FCC) is going to classify Internet service providers (ISPs) under the existing telecommunications regulations originally established for telephone companies. These rules are part of Title II of the Communications Act of 1934, as amended.

That date isn’t a typo. What a great idea for something that changes as quickly as the Internet! The scary thing is that these changes only require a vote of the five commissioners, which currently include three Democrats and two Republicans.

The latest plan comes in the wake of a lawsuit that the FCC recently lost against Comcast. The cable company wanted to slow or delay excessive volumes of data so they wouldn’t bring down its network, which seems reasonable, as it owns the network and wants to keep it open to all of its users, not just the ones who indulge in heavy traffic.

The FCC said that the cable company shouldn’t be allowed to do so and that all of its users should have equal access regardless of how much traffic they generate—in effect, creating “net neutrality.”

The U.S. Court of Appeals ruled in favor of Comcast and said that the FCC doesn’t have the authority to regulate ISPs. So, it seems that the FCC’s new push to classify ISPs as telecom providers is an end run around that decision.

FCC Chairman Julius Genachowski released a note on May 6 called The Third Way: A Narrowly Tailored Broadband Framework outlining the FCC’s approach. It appears to be somewhat fair, with some tough underlying regulation.

Genachowski says that the FCC’s goal is to “advance our global competitiveness and preserve the Internet as a powerful platform for innovation, free speech, and job creation.” He doesn’t state how regulation will do this, though. Frankly, I can’t see how any regulation is going to help advance those goals, much less help the FCC with its national broadband agenda.

The FCC wants to limit regulation to only the transmission component of broadband access service and apply Title II Sections 201, 202, 208, 222, 254, and 255. I haven’t looked those sections up yet, but they do involve serious regulation on a technology and services that are changing daily.

It seems like just what we don’t need—some old rules that keep us from doing what is best for the customer and the economy. In any case, the ISPs are edgy and seriously disturbed. Lawsuits are sure to come if this happens, which means more wasteful litigation.

The FCC says that it is trying to protect America’s broadband users. From what? Getting slower service? Today, if you want higher speeds, you can get it but you need to pay extra. If the FCC gets its way, and that seems inevitable now, you will be able to get your way on the Internet no matter how much traffic you use, and the ISP has to cover it. I can’t help but think this the wrong way to go in expanding the Internet.

The FCC seems to be afraid of business, except for Google, Yahoo, and Microsoft, which really favor net neutrality for their own purposes. They want the rewards but none of the costs associated with building out the Internet infrastructure and maintaining it to provide the 100-Mbit/s links to every U.S. home that are part of the FCC’s broadband agenda.

The FCC’s plans will hurt carriers and could, or probably will, slow or kill off future investment in their networks, not to mention new job opportunities. And that seems to conflict with what the FCC says it wants to achieve with its broadband plan.

This isn’t one of those deals where you can write your Congressional representative and hope to get the vote to go your way. The best you can do is to try to make a good argument for your case and file your formal comments with the FCC. Maybe you shouldn’t waste your time, but if the FCC gets enough negative feedback, it could rethink or modify its decision.

Perhaps the ISPs will win in court. Otherwise, it will seem like the 1996 Telecom Act all over again, and that legislation did nothing but confuse the industry and delay technological innovation. Let’s hope the industry will continue to muddle through and the venture capitalists will still invest.

Do you want net neutrality? Send me your thoughts, and be specific. I’m generally against new regulation, especially if we can’t identify the problems that it will solve, how it benefits us as consumers, and what impact it will have on our employers. But I am open to new ideas.

Will regulation solve our current problems, whatever they are? Or is the government simply grabbing power by positioning its plans as a solution for perceived future problems that may never occur? Let me know what you think.

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