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The net neutrality rules, published Friday, represent the realization of a long dream of Democratic President Barack Obama and his appointed FCC Chairman, Julius Genachowski (pictured).  (Source: Television Broadcast)

The rule ensures that content delivery services like YouTube can not be discriminated against by ISPs.
Limitations to new rules won't please everyone, though

It was the night before Christmas and all through the halls, not a creature was stirring -- except for the U.S. Federal Communication Commission's five man board.  They were busy delivering a special holiday present to internet firms -- the first publication of the net neutrality rules, which they (largely begrudgingly) passed on Wednesday.

The rules, available here (PDF; 1.0 MB) directly from the FCC, offer many predictable terms and a few seasonal surprises as well. 

I.  What's Inside

The rules will give the FCC for the first time the ability to regulate internet networks and prevent service providers from blocking any "lawful" traffic or throttling it. 

Some companies, such as Comcast, America's largest cable internet provider, have already been accused of trying to shake down internet content providers to maintain access.

One slight surprise is that the rules also make it difficult for service providers to accept fees to speed up traffic.  Many expected this to be legal. 

Telecom attorneys fought to allow it.  But Democratic Commissioner Michael J. Copps ardently opposed it, saying it would stifle innovation and make providing internet content a business only accessible by the wealthy.  The FCC apparently agreed with Mr. Copps' complaints, writing, "In light of each of these concerns, as a general matter, it is unlikely that pay for priority would satisfy the "no unreasonable discrimination" standard."

II. Tiered Usage Fees?

Parts of the bill bear some ambiguity.  The bill does seem to allow for tiered data usage schemes, but it indicates that it would monitor such systems for abuse.  This make it unlikely that telecoms could achieve their dream of charging heavy users (such as those who stream Netflix) hundreds in monthly fees ($0.01-$0.03 MB fees has been proposed by some).  Ultimately, with little profit incentive, telecoms may be reticent to adopt tiered usage.

III. Throttling "Illegal" Traffic -- Allowed, but is it Feasible?

Another ambiguous concept is the idea that "illegal" traffic may be throttled.  States the document:
In the Open Internet NPRM, the Commission proposed that open Internet rules
be subject to reasonable network management, consisting of "reasonable practices employed by a provider of broadband Internet access service to:(3) prevent the transfer of unlawful content; or (4) prevent the unlawful transfer of content."
The problem here is that ISPs like Comcast would have to prove that bittorrent or peer-to-peer (P2P) traffic was illegal.  Some legal services use these formats to distribute music, movies, or other file types, and the academic world often relies on them for file transfers.  All it would take would be one case of mistaken throttling and the ISPs could be slammed with big legal fees and fines.

Of course the government is considering, under the pending ACTA internet treaty, forcing taxpayers to fund the government monitoring networks for copyright infringement and other illegal behavior.  However, it is questionable whether this is even possible why maintaining sufficient service fees and avoiding false positives.

IV.  Mobile Limitations

As widely assumed, the document makes exceptions for mobile internet, something that angered FCC Chairman Julius Genachowski's Democratic Commission colleagues.  The document states:
However, as explained in the Open Internet NPRM and subsequent Public Notice, mobile broadband presents special considerations that suggest differences in how and when open Internet protections should apply... Moreover, most consumers have more choices for mobile broadband than for fixed (particularly fixed wireline) broadband... In addition, existing mobile networks present operational constraints that fixed broadband networks do not typically encounter.  This puts greater pressure on the concept of "reasonable network management" for mobile providers.
The document suggests that mobile internet "openness" may be revisited by rulemakers once it becomes more established.  And pending schemes -- like the idea of "pay per site" revealed by top telecom firms at a recent conference -- may be ruled by the FCC to be outside the realms of "reasonable" management.

V. Could this "Gift" Get Returned?

Ultimately the rules could face challenges from multiple sources.  Telecom firms and internet service providers could file suit against the provisions in federal courts.  Their fate in such cases, though, would be uncertain.  While they won past suits, such as the spring federal court ruling that Comcast could throttle traffic, those wins came largely because the FCC had been unable to ratify an official series of rules -- which it has now done.  With those rules in place, the courts would likely be more hesitant to override the FCC and diminish its Congressionally granted ability to regulate national communications.

Other challenges could come from Congress.  Telecoms have funneled millions to the campaigns of certain politicians, which will likely help them secure future challenges to the legislation by Congress.  The funded candidates are largely Republicans -- Sen. John McCain (R-Ariz.) alone accepted from AT&T and Verizon $237,000 in direct donations, $3.6M in lobbyist-raised funding, and free personal service to his Arizona ranch.  Republicans are about to gain control the House of Representatives, but are in the minority in the Senate -- plus they do not control the White House.  Thus the possibility of legislative opposition remains very viable, but will have to wait for future election years.

ISPs, besides wireless firms, likely will be less than happy with the new rules, which set limits on their internet profiteering.  However, they still have many viable options to maintain their profits and tight control of local markets.  One option is to lobby state officials to ban citizens in counties or townships from banding together and creating their own faster, cheaper municipal Wi-Fi services.  ISPs have already tried to kill several municipal efforts in such a fashion.

For content deliverers like Google (owner of YouTube), the rules definitely fulfill a key item on their wish list.  But they have expressed concerns about the rules apparent allowance of telecoms breaching net neutrality in the mobile realm.  Thus it might not be exactly how they wished for it, but the ratified and published "In the Matter of Preserving the Open Internet Broadband Industry Practices" regulations document still gives them something thankful for this year.


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By theslug on 12/26/2010 3:36:04 AM , Rating: 3
No. The whole point of this, which net neutrality advocates point out, is to prevent ISPs from acting unfairly. The idea is to prevent problems from occurring to begin with. Without some sort of intervention, ISPs can just throttle, block, and slow down whatever data they want to. We can't trust them to police themselves, so some organization needs to step in and set standards. I'm not saying it should be the FCC, but someone needs to regulate this and make sure things are geared towards the consumer, not the telecoms.


By Shinei on 12/26/2010 5:49:48 AM , Rating: 2
"The idea is to prevent problems from occurring to begin with. Without some sort of intervention, ISPs can just throttle, block, and slow down whatever data they want to."

The problem is that exclusive domain allows ISPs to behave non-competitively, without legal repercussions. The FCC's net neutrality stance is just a band-aid for a much larger issue that they introduced years ago, giving ISPs essentially infinite authority over any region they decide to provide 'service' to and disallowing competition in those areas.
Also, ISPs can currently throttle, block, and slow down whatever data they want to; if they're all evil criminals waiting to take your internet away while twirling their mustaches, why haven't they done it already?

"I'm not saying it should be the FCC, but someone needs to regulate this and make sure things are geared towards the consumer, not the telecoms."

Companies that cheat customers don't stay in business very long in a proper competitive environment. Suppose Comcast decided to throttle the internet and create a sheltered garden for its users instead.
If Comcast has no competition (current situation), users are forced to suck it up or rely on FCC legislative beatdowns (the extension of government power never being released when its time is up).
If Comcast is forced to contend with competitors, users can tell Comcast to go die and use a company that doesn't throttle or mutilate the internet. The FCC doesn't need to be involved at all, since it's not their job to legislate what private companies do and don't do with the services they provide to customers.


By Lugaidster on 12/26/2010 10:27:59 AM , Rating: 1
The problem is that companies already throttle, and, according to the article, have won suits further giving throttling strength. For competition to exist you need high mobility of factors and low market entry barriers. Neither exist in the market for obvious reasons.

Comcasts aren't in the business to take away my internet, they are there to charge me big sums of money just to check my email. So the whole "if they're all evil criminals waiting to take your internet away while twirling their mustaches, why haven't they done it already?" doesn't apply.

You can't force competition when there are no competitors. And it's pretty dificult to enter the market so I don't see new competitors in the horizon. In the end, you'd have to be a moron or work for any of those companies to be agaisnt the concept of net neutrality. Implementation is a whole 'nother deal though, but it can be improved upon.

Besides, companies that cheat consumers have stayed in business for a pretty long time, and will stay there as long as they have piles of cash and good lawyers. A small company might not be able to sustain bad press, but Comcast can't get much worse in that regard and it still exists.


By LilBambi on 12/26/2010 12:46:06 PM , Rating: 1
How long did AT&T keep us all shackled before the government finally stepped in to break them up and make it so we could actually buy our own phones, faxes, allow more than one phone and pay for each additional, and prevent their highly inflated pricing structures?

The corps in this country do not learn their lessons well at all.


By Kurz on 12/26/2010 1:41:03 PM , Rating: 2
And how long did government help AT&T keep their monopoly?
Research, learn and understand that government isn't here to help you.

“Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”

“That government is best which governs least.”

Thomas Paine


By Lugaidster on 12/26/2010 2:33:50 PM , Rating: 2
"And how long did government help AT&T keep their monopoly?" The government changes because the people that constitutes it changes. But that really doesn't matter. A market needs regulation when it doesn't behave like a free market, and guess what, the internet providing market doesn't behave like a free market!

I want my ISP to stay neutral, whether I'm watching videos or reading my email I don't want to get throttled, simple as that. If you like to get screwed by ISPs, that's your cup of tea, not mine.


By Kurz on 12/27/2010 11:30:29 AM , Rating: 2
I must restate... The government (Local) caused the problem in the first place. So undo the regulation, Deals, contracts that the government made with the ISP's.


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