Is Net Neutrality In Trouble?

It was barely a blip in the tech press. On February 3, a Friday filled with the furor over the President’s refugee executive order, newly-minted FCC Chairman Ajit Pai released a simple four-sentence statement:

Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers’ free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.

Although not explicitly written, this statement is a peek into how the new Chairman will act in regards to net neutrality rules. The new Chairman has always been opposed to the ruling that classified broadband service providers as common carriers under Title II of the Communications Act of 1934. This classifies service providers as public-utility providers and requires that they must treat all data traveling over their service equally. It also affords regulatory authority over ISPs to keep them from, for example, slowing down a user’s connection. Naturally, the broadband service providers (primarily cable and telecommunications companies) were opposed to the reclassification due to the possibility of greater regulation from the FCC.

Commonly referred to as the net neutrality rule, the Title II classification means that ISPs can’t do things like have different rules/costs for video services being delivered to consumers.

So, this seemingly innocuous statement represents the first salvo at the current net neutrality rules.

At issue are wireless carrier plans that allow consumers to use as much data from a particular website or app without data being deducted from a consumer’s’ subscription plan. The investigation of the “zero-rating” plans was aimed at AT&T’s Data Free TV no-data delivery of streams from its DirecTV subsidiary, and Verizon’s FreeBee Data 360 at no additional charge video streaming program. These plans were under FCC scrutiny because it was believed these carriers, who were offering their proprietary services with no extra charge to consumers, would be in violation of not affording equal treatment if other video service providers (i.e., competitors) did not have the same deal.

Net neutrality relief

Pai’s statement of support for the free-data plans is designed to sound reasonable in the immediate, situational-specific short-term. But it sets the table for future battles on how ISPs will be regulated under net neutrality rules. If rules are relaxed or not rigorously enforced, we may be revisiting such ideas like service providers charging for “fast lane” advantage, which was once a part of the FCC’s earlier net neutrality rules (before overturned in the courts and the subsequent reclassification to Title II).

Those in favor of relaxed rules say that allowing “fast lanes” helps to prioritize bandwidth-hungry video that represents a disproportionate amount of all Internet traffic. The argument goes that reasonable discriminatory pricing will, in turn, allow service providers to invest in upgrading infrastructure to improve network access. Those who fought for classifying ISPs as common carriers say that all data on the public Internet must be treated equally to avoid corporate abuse by those who supply consumers with subscription access to the Internet.

There is little doubt that the new administration and FCC Chairman want less regulation on the corporations that provide Internet access to consumers. How much impact those efforts will have on current net neutrality rules remains to be seen. Look for deliberations among U.S. government agencies on pending mega mergers (AT&T and Time Warner) for clues on how regulators will treat companies that own the pipe and the content.