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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 diggernash on 12/26/2010 10:48:32 AM , Rating: 2
Or people can choose to not consume and the companies will change. We are not talking about water here. You don't die without internet.

By Lugaidster on 12/26/2010 11:55:01 AM , Rating: 3
Your statement is naive at best. I don't die without many things and yet I still want them: a car, a big house, a big hometheater, a computer, to travel to Paris when I want to, to eat sushi if I want to, etc. I thought that was the whole point of not living in a communist country, I can have what I want and not get screwed for having it.

And I know I have a choice, in this case get screwed by my ISP, get screwed for not having internet connection or have someone else screw my ISP. It's pretty obvious. I want to be connected to the internet and I don't want to be screwed by my ISP, so that leaves only one option.

I want someone else to ensure that I don't get screwed. Better yet, I don't want to be bothered with this things. That's why I have someone that represents me in the House of Representatives. After all, that's how democracy works ain't it?

By Kurz on 12/26/2010 1:36:27 PM , Rating: 2
Except if the government keeps limiting those choices, it'll end up costing more and becoming less efficient and the end product is worse.

If you have a Beef with your ISP go to your lower government and demand they finally allow others to compete in the market.
They often have contracts with ISP's to give them kickbacks.

By Lugaidster on 12/26/2010 2:37:44 PM , Rating: 2
The point is that new ones won't solve the problem. They will still have the same incentives. Every major telecom in whatever country that has no regulation behaves the same. That's the point. Changing a monopoly for an oligopoly won't solve the issues at hand.

By diggernash on 12/26/2010 11:18:14 PM , Rating: 2
Good luck affording a big house when government regulation of our faux footprint hits. I like big vehicles, now I'm going to get slammed with extra regulation on them. Based no these other products, I will be surprised if government intrusion at the federal level does anything except harm internet consumers over the long haul.

I don't want anyone telling someone that invests capital and maneuvers shrewdly to put them selves in a position of power in an industry that they've done too good of a job and now they need to play nice. I want the idea of becoming that billionaire to drive others to develop new and better products for me to consume.

And I don't need the guvubmint attaching greed taxes to anything that I wish to buy. This will evolve into a fee to cover the costs associated with enforcing this regulation. Write it down and wait for it to happen.

You failed to mention the 4th option of becoming the one what does the screwin', eliminating getting screwed all together. ;)

By Lugaidster on 12/27/2010 9:06:30 PM , Rating: 3
I'm not discussing all regulations, I'm discussing net neutrality. I want the consumer (me) to have some power (which is what happens when you have lots of suppliers which this market does not), maybe there are better alternatives to achieve the same but if that is for me to actively get involved in changing that status quo, I'd rather have some regulation in place.

I don't understand what's so bad about ensuring that my ISP stays neutral no matter what the hell I'm using my internet connection for. There's a difference between the possibility that my next ISP won't screw me and the certainty that it won't happen (well, almost). Even if the government had no involvement for a new competitor to appear, it's not that good a deal to become an ISP (it requires a lot of investment in infrastructure). Unless wireless broadband gets cheap, that won't change all that much. Since this barely affects wireless broadband it won't matter much when it becomes cheap and widely available.

That fourth option you mention would actually work if I had the power to actually screw my ISP, which regretfully I don't, unless I take it to some authority or, even, the court. Since there have already been previous suits that favor them, I'll refrain choosing that path. Another way would be if I cut my internet connection, since I don't have alternatives, it's my loss, sure they'll receive less money but that won't affect them all that much. So unless I'm missing something, there's isn't much I can do to screw them without actually screwing myself.

By HoosierEngineer5 on 12/26/2010 12:46:26 PM , Rating: 2
More and more, the Internet is no longer just a curiosity or toy. In the not-too-distant future, it will be as important as having a vehicle, mail delivery, or telephone service. Even the government is encouraging Internet use for tax filing. More and more software applications REQUIRE an internet connection for installation or execution.

By LilBambi on 12/26/2010 12:51:44 PM , Rating: 2
The Internet is the new phones of this age. We and many people we know do not even have landlines anymore.

We could never afford to pay for both cellphone/cellular Internet and landlines that we would not be using except in emergencies.

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