The FCC is Hell-Bent to Regulate the Internet

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I suppose if you are a government regulatory agency you feel as though you are not doing your job unless you are regulating something. If you are a hammer you perceive every problem or opportunity as a nail, as they say.

I promised myself that I would not write about the subject of net neutrality ever again.  But I couldn’t resist commenting on the FCC’s latest quest to impose some government regulations on the Internet.  The FCC’s Chairman Tom Wheeler announced last week that the agency would be putting forth a revised and hopefully fair compromise to make sure the Internet is open and neutral.  The DC Circuit Court of Appeals has already said in two previous attempts to impose net neutrality rule that the FCC does not have the authority to do so.  Nevertheless, the FCC is trying again to insert itself into the regulation of the Internet.

Normally, regulations arise out of problems or abuses.  Many regulations are good, fair and needed.  Many others are not.  I suppose if you are a government regulatory agency you feel as though you are not doing your job unless you are regulating something.   If you are a hammer you perceive every problem or opportunity as a nail, as they say.  This is the case here because the Internet is already fully open and there have been no blatant abuses.  If there were problems other organizations like the Federal Trade Commission (FTC) or the Consumer Protection Agency could take care of it using existing regulations.  We do not need any new ones.

With Congress and the Federal agencies, not to mention the 50 state legislatures, cranking out thousands of new regulations daily, it is no wonder our freedom has slowly slipped away.  The government will only say it is imposing the regulations for our own good but I am not sure that we actually feel any good outcomes.  We only see the bad outcomes like more taxes, increased complexity, higher costs of doing business, and less freedom of choice or action.  I have to wonder just how much regulation is more for political agenda and special interests than for any real good outcomes for citizens.  In the case of the Internet, what exactly is the problem?  It’s already open.  Or is this whole thing is just a perceived problem?  Is it an effort to attempt to identify and solve future problems?  Or is it just one agency’s obsession to control the Internet?

Anyway, what the FCC is said to be proposing is to allow Internet service providers to charge for extra speed in delivery of video.  It is video from Netflix, Google (YouTube) and others delivering over-the-top (OTT) video that is causing some streaming delays or glitches because of network speeds.  The idea is that content companies would work out deals with the ISPs to pay for preferential treatment in network speed to make customers happy.  The FCC would have the power to decide just what business arrangements are fair and “competitively reasonable.”   Wow!  Is that subjective or what? 

What the outcome of any new regulations will be is anyone’s guess.  Some will be happy others not.  And will consumers actually get hosed with higher broadband rates so that some companies can have an advantage?  With all the complex interactions possible here it is premature to anticipate who the winners will actually be.  Maybe the real beneficiary will just be the FCC who is determined to insert itself into the Internet business and therefore to pick the ultimate winners and losers.

I say leave things alone and let the market decide.  Think of the customer first and try to put aside the political issues and just the idea that everything has to be regulated to work well.  It does not and the unintended consequences tend to be worse than any proposed benefits.  Haven’t we learned that yet?

The FCC will vote on May 15 about the decision to proceed with the new plan.  Then there will be the required sixty day comment period.  A final vote will occur near the end of the year to instate any new regulations.  Really something not to look forward to.  If the FCC doesn’t get its way, heaven help us if they resort to the provision in Title II of the Communications Act of 1934 that allows them to regulate the Internet as it does telecommunications services.  Then let the legal wars begin.

Discuss this Blog Entry 18

on May 7, 2014

Bill Wong hit the nail on the head. Comcast and AT&T are evolving into a duopoly in providing Internet service in the U.S. They don't care about customers. They care about profits. Allowing them to do what they please without any regulation is not good for consumers and not good for this country.

on May 7, 2014

20 years ago, there were ISP's all over the place. There was a local fellow that ran an ISP service out of the basement of his house!

As with cellphones, when consolidation and attrition creates just a few huge corporations controlling a specific market, choices and products become few.

With few companies providing access to the internet as compared to 20 years ago, there is no reason to believe those controlling the access to the internet today have the best interest of the customer in mind.

The courts need to get out of the FCC's way.

on May 7, 2014

Whatever you call it the FCC is NOT going to create "fairness", and Tom Wheeler is probably the LAST person I'd want to determine what THAT is since he's really a veteran of BOTH the cable and cell phone industries! What will REALLY happen as a result of "charging for bandwidth" is the large "incumbent" media players will be able to afford to get sufficient bandwidth to present their video wares that can be streamed as you watch, but all the smaller players will NOT be able to afford it and all you get when you try to watch them is endless "buffering" warnings. The FCC wants you to THINK this is "fair and open" but in reality this is a lie straight out of Animal Farm! No, if you care about TRUE openness then run, DON'T walk to the FCC site and anywhere else you can find that will allow you to protest this hideous "power grab" by Big Media, or else you will have to watch all your smaller video distribution sites shrink, fail and ultimately close from disuse from this new, totally phony big government version of "fairness" which is only fair to the big guys' bottom line!!

on May 7, 2014

"bunch of monopolies" is almost an oxymoron. In fact most of the US (by population, not geographic area) is covered by competing ISPs. Monopolies do not need regulation. Monopolistic behavior, when it occurs, can be addressed by the appropriate legal remedies (and agencies) that already exist. There is no way we should permit yet another governmental agency to overextend its reach, especially when driven by purposes or intent outside of its charter.

on May 7, 2014

Wakeup damn it!!! This is what Alex Jones is talking about at infowars and at prisonplanet dot com.

on May 7, 2014

I'm absolutely certain that with the government coming to the rescue of the masses, things will only improve.

Just think of all the things the government has done for us, the helpless idiots who wouldn't know how to choose which ISP, or health insurance, is best for us.

Good luck everybody.

The service will

on May 16, 2014

I take off my shoes and belt and show a card for every fun prosthetic case I can envision before I send packets anyhow, so...no wait, that's not me, I'm the person with the express certification pass and the best fuzzing IPv6 can buy and good notice of when my cellphone was put in another bin.

on May 7, 2014

The last time you wrote about this, the comments were running about 10 to 1 against your perspective. So far it doesn't look like it has changed much. The American public is mad that large corporations (not the government) control so much of our lives. We live in a world where a lot of the things we consider necessities are only possible with the resources only available to large corporations and every time a merger occurs they promise this will provide efficiencies of scale that will benefit the consumer, but in the end it only benefits the corporation (shareholders and executives). Yes there is competition, if you call DSL competing with Cable competition. Two large corporations both of which are interested in making as much money as the market will bear. No it is not a monopoly. It is an oligopoly, which is little different--just harder to control.
Whether the current proposal is a good one or not is an open question, but the reality remains. The real solution should separate the pipe from the content. I should be able to buy (lease) a pipe and put whatever I want through it. If the terms specify a usage cost, that is fine as long as everyone pays the same cost without regard to the content. If it is flat rate, that is fine too, as long as the level of service offered is what is promised. Any arrangement that mixes content and connectivity is going to work to the advantage of providers, not customers, because it gives them more control, and they are already in a position of control.
Even my cell carrier should be providing me a pipe. What I put over it (voice, text, data, video) is my business. If they want to cap the volume or charge per minute that is fine, competition might level that field and lead to low per minute charges or flat rates. Even subsidizing the cost of the phone puts them at an advantage. For instance, I have had the same smart phone for 3-1/2 years now, yet my plan allows me to upgrade every 2, so I am paying for something I don't need that is enriching the carrier.
The whole purpose of government regulations should be to insure that companies are fair, honest and trustworthy and to level the playing field when the potential for advantage exists. It is not appropriate for companies to take advantage of people just because they are in a position to be able to--yet the temptation to do just that is very strong. It is unethical, yet it can be argued that it is illegal (on behalf of shareholders) not to do so under our present system. That is blatantly biased and does need intervention.

on May 7, 2014

The whole point of having an FCC is to provide oversight on the companies that provide public infrastructure and services. If companies like Comcast can self determine the cost for an "express lane" then its potentially a problem for a smaller ISP or service provider like say Pandora to compete.

As a small ISP in business for the last 25 years, I have witnessed the consolidation in the industry first hand, and it parallels the broadcast industry, with fewer and fewer independent radio and TV stations and less collage radio stations. All this consolidation nets the end user less choice, less freedom from the views of the station owners, and ultimately hurts free speech.

So yes I agree with Bill, and would recommend one step further that the editors really consider more appropriate, less inflammatory titles for articles like this with more balanced and fair (accurate) reporting.

The FCC is a responsive body, and it is up to us to be involved to protect the Internet.

More info here:

http://www.fcc.gov/blog/setting-record-straight-fcc-s-open-internet-rules

and here:
http://www.xudit.com/2014/04/25/the-grinch-who-stole-the-internet/

and here:
http://www.theguardian.com/commentisfree/2014/apr/24/fcc-net-neutrality-...

on May 16, 2014

Whee, Federales to the CPE. I can't tell that you agree with Bill or Wheeler's latest or neither, because your layer-1-5-in-FCC-arbitration RFC has no bindings. Do you see some that longhaul/FTC does not cover?

on May 7, 2014

Since the Federal Communications Commission regulates communications, it appears appropriate that they regulate Internet communications. Calling Internet communications an "information service" to avoid regulation as a communications service seems suspect. Many people complain that existing communications regulations (title 2) are appropriate for old fashioned communications methods (POTS, etc.), but not modern communications methods. To me, it's all communications and should all be regulated the same. If the existing common carrier regulations need updating, update them and apply them to all communications.

On "Internet fast lanes" and other approaches where a content provider pays for user bandwidth (either higher bandwidth or not having the content count against a cap), this seems very similar to 800 numbers on POTS. Large companies can afford to pay for an 800 number (today, pretty much anyone can), which gives them a competitive advantage over companies that require customers to pay for their own call. This seems very similar to the proposed content provider paying for improved bandwidth. Is it acceptable for POTS, but not here?

In general, Internet communications should be considered common carrier. If common carrier regulations need revision, revise them.

Harold

on May 7, 2014

If a monopoly or duopoly, as danromanchik calls it, develops and prices rises as a result or if the FCC overregulates it, there is always one option. Simply call your ISP and tell them you don't want their service anymore. After all, there was a time when we lived without the Internet and we can do so again. This would free up a LOT of time, at least for me.

on May 7, 2014

The problem is that we have mixed a utility with a conflict of interest. The public resource that makes it a utility is the right-of-way either for wires, fibre, or spectrum that the companies are granted the right to manage and profit from in the public interest. The conflict of interest is that they are in business to make money, and their effective monopoly granted by the government gives them an unfair advantage. No set of regulation strategies will work in all ways. The solution is to require the companies that we have unwisely granted effective utility status to while they are selling services depending on those utilities to split into two completely independent entities with absolutely no common interests of any kind. The distribution arm will own, maintain, and enhance the distribution infrastructure and sell bandwidth - providing access will be mandatory much like phone service used to be. They will sell this bandwidth to anyone who wants to transfer data in or out on equal footing - you and me for example, and the content providers for another example. We each pay our own distribution infrastructure providers for the bandwidth we use, just like electricity, water, and gas. The bandwidth provider is regulated. What goes over the network is not. The content providers sell their content any pay their bandwidth charge to their local provider of bandwidth. The public resource that is trusted to a a monopoly to manage has no conflict of interest and is appropriately regulated, as we have juggled electricity and water and gas for a century. The content providers compete on level ground, much like magazine publishers using the US mail for distribution. Very very little regulation is needed. Everything is fair on all sides. There are probably issues with turf due to the structure of regulatory agencies and legacy regulations and policies. We need to do whatever is necessary and stop granting monopoly power to companies with conflicts of interest to the detriment of the public and our country.

on May 15, 2014

The problem with "let the market decide" is that the market is dominated by Comcasterizon, who are powerful enough to make Netflix pay for access; guess who will Netflix pass these costs onto. This is not what I want as consumer; I already pay for the Internet, thank you; I don't want to pay twice by content providers passing their added cost onto me.

I think it's time to designate ISPs as Title II Common Carrier. It's not like there is an amazing variety of innovation there: we have Comcast and Verizon and surely enough they behave like an oligopoly.

on May 19, 2014

Endless libertarian nonsense.
If you don't understand the effect of monopolism in reducing the news to "center right", "Right right" and with Fox "Right off the cliff", you are a libertarian, convinced that markets, by way of consolidation and monopolism, is a GOOD thing and you believe anything which produces a level contest with rich, poor, wise and stupid all able to reach the same market for the very same price is a BAD THING.
And that is why we have need of regulators, to keep steel from being $1345.00 / ton and Abilify from being $38,000 / oz.

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Lou Frenzel

Lou Frenzel is the Communications Technology Editor for Electronic Design Magazine where he writes articles, columns, blogs, technology reports, and online material on the wireless, communications...
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