FCC

When it comes to discussing the FCC's recent proposal for rewriting its Net neutrality rules, everyone needs to take a deep breath, slow down, and check their facts, according to FCC Chairman Tom Wheeler, whose agency seems to have a knack for inadvertently exciting the public over its proposed policy plans.

And I couldn't agree more.

The Internet worked itself into a tizzy Wednesday evening when the Wall Street Journal and New York Times published stories in which they suggested that the FCC had changed its position on certain aspects of the Open Internet rules that it has been reworking since January when a federal appeals court struck down regulation the FCC had adopted in 2010.

Blogs were ablaze with headlines about the "Death of Net neutrality" and claims that the FCC was offering its approval to broadband providers who want to create so-called fast lanes on the Internet. The backlash was reminiscent of a media firestorm in November over the FCC's planned vote to lift technical restrictions on cell phones in flight. Frequent air travelers took to the media and Internet sites to complain that they didn't want to sit next to a jabbering passenger on transcontinental flights. To calm the public, the chairman was forced to broker a deal with the Department of Transportation, which has set rules that could still ban in-flight calls.

Like with the misunderstanding over the in-flight cell phone ban, the reality of what the FCC is actually proposing in terms of Net neutrality is far less dramatic than what has been reported. In a blog post on Thursday, Wheeler tried to clear up the misunderstanding. And his staff offered even more clarification to reporters on a press-only conference call.

CNET/Marguerite Reardon

In short, the FCC has not drastically changed its position on Net neutrality nor has it proposed creating a "fast lane" for broadband providers seeking to increase profits. Wheeler stated the FCC is merely trying to re-establish the 2010 rules that the FCC adopted and that the latest court ruling in January struck down.

The chairman is not proposing new rules that would replace the ones the FCC already adopted. But he said he will try to strengthen these rules to ensure they protect consumers and entrepreneurs, as well as stand up to legal challenges. This last point is an important one, considering that the FCC has lost twice already in court: first defending Open Internet "principles" and again, a few years later, defending actual Open Internet regulation.

But this time, Wheeler thinks the agency will get it right. In the federal Court of Appeals decision in January, the justices agreed that the FCC has the authority to regulate the openness of the Internet. But they did not agree on the FCC's legal basis for establishing those rules. So the court sent the FCC back to the drawing board to write new rules. And the court also provided a kind of legal blueprint for the agency to use in crafting these new rules.

Wheeler says the FCC's new proposal is an attempt to maintain the spirit of the 2010 rules, while ensuring that these new rules will be able to withstand future legal challenges. Specifically, Wheeler said the new rules will not "change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule."

A big misunderstanding

Much of the recent kerfuffle with regard to the FCC's proposal has to do with the third rule established by the 2010 Open Internet rules, which deals with prohibiting "unreasonable discrimination" among users.

Critics say the FCC has changed its position and is welcoming broadband providers to create so-called fast lanes that they could sell to the highest bidders. The fear is that broadband providers like Comcast or Verizon could create HOV-type lanes on the information super-highway, and content companies like Netflix or Amazon could pay for access to that priority lane so that their traffic would arrive more quickly and with better quality to their end users. Consumer advocates fear such offers from broadband providers would also mean that services that didn't pay for priority would be relegated to the Internet slow lanes, resulting in poor experiences for their customers.

The other worry is that if Netflix or Amazon is paying for the fast lane, they will pass those costs onto consumers, and indirectly, consumers, who are already paying for higher-speed broadband, will pay even more for certain service subscriptions.

I can't say one way or another if these fears would ever play out or even if this scenario did play out whether it would harm consumers. One could easily argue that customers of streaming-video services might appreciate better quality of service. This would likely mean less buffering and better-quality video during peak times of Internet usage. It could also be easily argued that services like Netflix and Amazon are already raising prices on their services, and will likely continue to do so, regardless of whether they pay for priority access on broadband networks.

I'll say it again: The FCC has not changed its position

But the issue as it pertains to the FCC and the Net neutrality debate is that the FCC has never actually said that such business models would be prohibited under any of its regulation. Some consumer advocates, blogs, and news outlets, which have accused the FCC of changing its position on this issue, have simply been confused about the FCC's previous stance when it comes to how Internet traffic should be treated.

The reality is that the FCC has never supported the idea nor has it ever established rules that would prohibit any and all network discrimination. In fact, when the Open Internet rules were first established in 2010, there was great concern about the wording of the non-discrimination rule and some critics feared that broadband providers would establish so-called Internet fast lanes.

Then-Democratic FCC Commissioner Michael Copps at the time the rules were adopted said he was concerned that broadband providers might force Internet companies to "pay for prioritization." But Copps, when he voted in favor of the rules, acknowledged that stipulating that there could be "no unreasonable discrimination" would protect consumers against such abuses.

Wheeler agrees wholeheartedly with former commissioner Copps.

"The Court of Appeals made it clear that the FCC could stop harmful conduct if it were found to not be 'commercially reasonable,'" he said. And he went on to explain that "even Title II regulation (which many have sought and which remains a clear alternative) only bans 'unjust and unreasonable discrimination.'"

Wheeler said that the FCC is proposing rules that will establish a high bar for what is considered "commercially reasonable." And he believes that by defining what sorts of network discrimination is acceptable and what practices are not will protect consumers and entrepreneurs and their access to an open Internet.

"The allegation that it will result in anti-competitive price increases for consumers is also unfounded," he said. "That is exactly what the 'commercially unreasonable' test will protect against: harm to competition and consumers stemming from abusive market activity."

So far the FCC has not said how it defines what is reasonable and what is not. A spokesman for the agency said on a call with reporters that this is why the FCC is asking for public comment on the proposal. The FCC will also ask how this provision should be applied to wireless networks. According to the 2010 Open Internet rules, the rule forbidding unreasonable discrimination of traffic does not apply to wireless networks.

"The FCC wants to provide an opportunity for the public to comment before decisions are made," the spokesman said. "The idea is to ask first and answer those specific questions later once we've gathered more information. That's the responsible way to do this."

What about 'peering' arrangements?

What the proposal will not address are commercial peering arrangements between broadband providers and content providers or any other network operators looking to connect to broadband networks. This is an issue that surfaced recently from Netflix, which has claimed the FCC needs to adopt "strong" Net neutrality to ensure that companies, such as Netflix, can get access to broadband networks without payment.

But the truth is that such commercial arrangements between content companies and among network operators has never been considered as part of the Net neutrality issue. And an FCC spokesman acknowledged that this is not an issue addressed in the current Open Internet proposal. But he did not elaborate on whether the FCC would consider opening a different proceeding to look into regulating these commercial deals.

Instead, he emphasized that the proposal that the chairman shared with his fellow commissioners Thursday and on which the FCC will vote on in May, does not outline any new concepts for Net neutrality. The proposal essentially rewrites the old rules from 2010 and provides a legal basis for establishing the previously adopted regulation. He also noted that the chairman's goal in getting these rewritten rules on the books is to ensure that everyone is playing by the same rules of the road when it comes to the Internet.

"There is a gap right now in regulation" he said. "And the chairman is working quickly and aggressively to close that gap before the end of the year to protect consumers and entrepreneurs."