FCC to Move Forward with Reclassification of Internet. Lawyers Rejoice.
It's been a week full of surprises from the FCC. News broke on Monday that FCC Chairman Genachowski had decided to forgo imposing new net neutrality regulations on Internet Service Providers. But no sooner was the dust settling from that supposed decision than word came last yesterday from The Wall Street Journal that Genachowski had actually decided to go with reclassifying the Internet as something other than an "information service;" a move that makes imposing net neutrality regulations much more likely.
No one knows for sure yet the exact regulatory framework the FCC will end up proposing. But know this: a terrific legal showdown is about to be unleashed by both sides (FCC & special interest groups ! against the major telecom/ISP providers).
As we've said for many years, the Internet has managed to grow exponentially over the last three decades with the current "lite-touch" regulatory system in place. Why are we throwing ISPs under the bus just as the economy is starting to rebound? We need ISPs to want to expand their networks. And the only way they will do so is with sufficient incentives. It is going to take $350 billion in private sector investments to roll out networks to connect the rest of America that is not already on broadband connections. Enacting regulations that will serve only as a disincentive to invest in these networks is the opposite approach the FCC and the Obama administration should be taking.
There are aspects of the six proposed principles that most ISPs could and should live with. In fact, most of them did not have a problem with the existing four principles as put in place earlier this decade.
But it's the last two that were proposed by the FCC this past fall that has everyone in a tizzy. Imposing a non-discrimination policy on network management is the same as some folks advocating that all citizens enjoy equal outcomes, whether it is in education, jobs and wages, etc. What we should be talking about is equality of access. If two companies want to voluntarily engage in a business transaction that moves data from the content provider to the end-user in a prioritized way, as some applications require low-latency connections, than they should be allowed to do that. It in no way degrades other users' experiences.
The sixth principle is good on paper, that ISPs should display transparent network management practices and be able to engage in reasonable practices, but what constitutes "reasonable" is going to be determined in court. The devil is in the details and the FCC wants to dive right into all the nitty gritty.
The ! bottom line is that this is a disappointing move, and really an unpopular one, as I think most people understand that no one entity owns or operates the Internet and no one entity should, whether government or private company. People see for themselves that the system isn't perfect, but it is good. This latest move by the FCC is a move to attain perfection in competition, price, quality and fairness, and really, when was the last time you saw top-down one-size-fits-all government regulation produce this?
Update: A new blog post from the Wall Street Journal's Amy Schatz updates us on the FCC plan: essentially a "Title II-lite," and the FCC wants to stay out of regulated pricing, but this is definitely a move to impose "com! mon carrier" regulations on ISPs.