FCC: reclassifying the internet as a utility

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Radio TowerIn February 2015, the Federal Communications Commission (FCC) passed rules regulating the broadband services and reclassifying the Internet as a “common carrier,” which means that the networks must be open to everyone. Net neutrality proponents have hailed this as a victory for the open Internet, while opponents decry the move as a power grab that will result in over-regulation by the FCC. 

Consumer protection from Internet Service Providers? 

One of the biggest concerns that consumer advocates have about Internet Service Providers (ISPs) is the way that they throttle access to data speeds. Some ISPs, like Comcast, also have cable TV businesses that compete with streaming services like Netflix. In a high-profile spat, last year Comcast and Verizon throttled Netflix data speeds in order to encourage Netflix to pay more money for more access to customers. The idea of “fast lanes” for certain data — available to those who pay for it — frustrates consumers and consumer advocates because it could limit consumer access and choice.

 “The federal agency’s ruling imposes ‘net neutrality’ on ISPs,” says Mark Grabowski, a lawyer and professor specializing in Internet law at Adelphi University. “This means they can no longer block or slow traffic to the websites of companies that anger them or refuse to pay an extra fee.”

Grabowski says that this protects consumers, since its allows them to browse the Internet freely, without the fear of having their video streaming or other online activities randomly slowed or blocked by their ISPs.

David B. Coher, a practicing attorney with 15 years of experience with technology policy matters, believes that, short-term, not much will change for consumers. After all, the ruling is designed to maintain the access status quo by preventing ISPs from charging businesses more for so-called “data fast lanes.” Plus, Coher expects legal wrangling over the rules, with challenges to the FCC’s authority in the courts. Even though the regulation won’t take effect until summer of 2015, the reality is that the effects could be put off for years.

“As for the long-term effects for customers, it is too early for anyone to tell,” Coher says. He points out that technology continues to develop, and there is no way to know where we will be by the time the legal challenges wend their way through the courts. “There is also the open question of third-party providers of Internet access, such as cities providing free WiFi,” he continues. “This is separate policy that leap-frogs the relevance of this regulation by the time it is fully adopted.”

Another worry is in terms of innovation. Coher believes that without the ability to charge for greater bandwidth, the capital investment in infrastructure may be lacking for future ventures. “The concern many have expressed is the stifling of innovation that requires greater bandwidth than is in place today.” 

Coher is also concerned about the customers who are willing to pay for extra access to faster speeds. “I don’t think anybody argues against the idea that the data lanes will be more open,” he says. “The customers seeking current service offerings or a minimum of cost will be protected. But the customer who would prefer to have an option for access to greater bandwidth, even at a premium cost, will be left without such an option.”

Coher is also worried about rural areas. He sees wired broadband access falling out of favor as time progresses. “We are likely to see the shift in technological development move to wide-area wireless technologies,” he predicts. “This will enable alternative paths for delivery of Internet connections in the urban and suburban portions of the U.S., but will leave our rural communities even further behind.”

Grabowski sees the ruling as a way to expand options, however. “The FCC could theoretically require telecom giants such as Time Warner to pen their lines to competing ISPs,” he says. “If that happens, startups who want to get in on the growing demand for Internet service would be able to use existing cable and phone wires. This would not only create opportunities for new ISPs, but the resulting competition should lower prices and improve service for consumers using the Internet.”

The FCC has said that, so far, it doesn’t plan to require this of telecom giants, but Grabowski hopes that the move toward broadband access that isn’t limited to a handful of local monopolies will be encouraged by the FCC ruling. Right now, big telecom companies are known for trying to suppress competition in the form of municipal broadband and other advances. This results in Internet service that is slower and more expensive than what is offered by many other advanced countries. 

“Today, Americans use the Internet for everything imaginable. We use it to shop and sell, watch TV shows and movies, to do work and to take college classes,” says Grabowski. “Reliable, affordable Internet access is essential for life in America these days.”


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Miranda is a freelance writer and professional blogger specializing in financial topics. Her work has appeared in numerous media, online and offline. Her blog is Planting Money Seeds.