The Federal Communications Commission is again trying to figure out how to regulate the Internet. Again, there are no simple answers. Again, it’s making a lot of people mad.
For more than 10 years, the FCC has been trying to settle a fiendishly complex dispute that pits champions of “net neutrality” against the cable and wireless companies that deliver data to homes and businesses.
These giant Internet service providers – think AT&T, Comcast, Verizon and Time Warner Cable – have invested billions of dollars in telecommunications infrastructure: cable networks, cell towers and other equipment that connects us to information services like Yelp, Hulu and Netflix.
Because they own the transmission channels, they could strangle rivals, offer extra-fast connections to favored services and discourage innovation by relegating startup enterprises to the “slow lane.”
The big ISPs have only sporadically stomped on companies. But under current federal policy – including a pair of federal court rulings – they have enormous latitude to use their infrastructure as they see fit.
Under net neutrality, they’d be prevented from charging differential rates, blocking access or offering fast lanes to companies that can pay more.
The most adamant net neutrality advocates want ISPs reclassified as “telecommunications services,” like the old-fashioned copper-wire phone companies. They’d be heavily supervised by government and required to connect anyone to anyone at uniform rates. They are currently classified as “information services,” which – so say the courts – exempts them from most regulation.
The status quo leaves too much concentrated power in the hands of the ISPs. Inevitably that will work against the public and undercut the exuberant Web innovation that has been spawning industry after industry since the early 1990s.
Today, a handful of entrepreneurs with a brilliant idea can still launch a successful business from a living room. That won’t be possible if the big guys they’re up against can buy unchallengeable speed.
Yet turning ISPs into regulated utilities would have its downsides, too. No one knows what the Internet is going to look like in 10 or 20 years. The Verizons and the AT&Ts have been part of the Web revolution themselves. The government should not leave them so rule-bound that they’ll stop innovating and investing in their own new technologies.
FCC Chairman Tom Wheeler has come up with a sort of middle ground: His agency would judge ISP business arrangements on a case-by-case basis, using a “commercially reasonable” standard. It’s an attempt to keep the courts happy, avoid overregulating the ISPs, yet prevent them from killing startups and rivals.
Net neutrality advocates are screaming. They say Wheeler’s plan would leave the Web wide open to fast lanes, slow lanes, unfair pricing and other quasi-monopolistic practices.
Wheeler and his FCC tried to mollify the critics Thursday by saying they are also considering the reclassification data.
There seems no way to split the difference. Wheeler’s plan is a good faith effort to make something work within the bounds of legality and political reality. Yet his ad hoc approach can’t offer startups and investors the certainty of a level playing field.
One conclusion is obvious: When the only options available appear to consist of straitjacketing the ISPs or letting them have their way with consumers and tech companies, existing federal law is hopelessly out of date. With the blunt tools it possesses, the FCC probably isn’t capable of getting this right. The ultimate responsibility rests squarely on Congress.