Internet Discrimination Is a ‘Feature,’ not a Problem, Says FCC Chief

The Federal Communications Commission votes next week on whether to undo net neutrality. The rules help protect consumers in uncompetitive markets, so rural America has a lot at stake.

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The concept of “net neutrality” has been around for years. But we’ve heard more about it in the last few months than we did in the preceding decade.

There’s a reason: On Thursday, December 14, the Federal Communications Commission will vote on a proposal to abolish net neutrality. People who care about rural America’s access to services and information should be concerned.

Net neutrality is the concept that web pages, MP3s, movies, or any other data should be able to go from any internet location to any other location without favorable or unfavorable discrimination. It prevents service providers like Verizon, AT&T, and Comcast from “speeding up, slowing down or blocking any content, applications or websites you want to use.”

In 2015 the FCC enacted rules to ensure that internet companies couldn’t discriminate against certain content or customers. The new chairman of the FCC wants to undo those rules.

Let’s look at how we got here and what’s at stake for rural residents.

From Competition to Monopoly

In the 90s, residential end users got the Internet delivered in two parts: the telephone service, which most residents had, and multiple Internet providers (ISPs) such as America Online (AOL) or Compuserve.

At the time, it was a truly competitive market because end-users could easily switch between internet service providers easily (though the phone companies, not so much). However, between 1995 and 2005, there was a lot of consolidation, significantly narrowing the choices for consumers and smaller businesses. Then the largest companies started bundling internet access with their other services like telephone and cable TV. This led to even larger companies with more market share and more cash.

Technically these companies have competitors, with at least one telephone and one cable company in most markets. But it’s different in practice.

“In reality, when you talk about solid competitors, there are none against Verizon, Comcast or the other large telcos or cablecos,” says, Anne Schwieger, broadband and digital equity advocate for the City of Boston. ‘These companies rarely go into each other’s territory.”

The marketplace doesn’t work well without competition. In the early 2000s, FCC Chairman Michael Powell, a George W. Bush appointee, advocated for more private-sector competition. He said companies should protect what he called the “Four Freedoms Network Neutrality.” Here’s what he said:

“As we continue to promote competition among high-speed platforms, we must preserve the freedom of use broadband consumers have come to expect,” Powell said. “Thus, I challenge the broadband network industry to preserve the following ‘Internet Freedoms.”

  • consumers should have access to their choice of legal content;
  • consumers should be able to run applications of their choice;
  • consumers should be permitted to attach any devices they choose to the connection in their homes; and
  • consumers should receive meaningful information regarding their service plans.

In 2005, the FCC incorporated these principles into a Broadband Policy Statement, but the DC Court declared that the FCC lacked authority to enforce them.

Sure enough, lack of competition led the private sector to ignore these principles, so the FCC began to step in to uphold them. In 2015 under Chairman Tom Wheeler, the FCC classified broadband providers as a Title II service, meaning the FCC could regulate them like it does old-fashioned phone lines. Under this authority, the FCC protected the Four Freedoms of Network Neutrality.

Now Chairman Pai wants to get rid of those protections.

Without net neutrality rules, consumers and the federal government have no way to prevent internet service providers from doing bad things to consumers until after the fact. And because there are no rules, how do you get providers to stop doing bad things to consumers and businesses?

The stakes are higher for rural internet users, because rural areas have even less choice in internet service providers than urban residents do.

An Example: Telehealth

Let’s focus on telehealth to see what could happen in the real world if Chairman Pai has his way. Telehealth is an emerging service that has a lot of promise for delivering better healthcare to rural America. The development of this field depends on net neutrality.

“Today, telemedicine applications are built for an internet that does not distinguish based on the type of traffic or origin of the traffic,” says Harold Feld, senior vice president for Public Knowledge, a Washington D.C. nonprofit. “There’s no advantage using one vendor over another in terms of internet connection. It makes no difference.”

But without net neutrality rules, broadband providers can set their own rules for paid prioritization (or “fast lanes”). They can create different pricing tiers or other forms of differentiated treatment for the services and content that happens to run over their network. They could cut a deal with one telehealth service to put their data in the fast lane and the competition’s in the slow lane. That puts the internet service provider in the role of helping determine where you get your medical treatment. Or it might mean consumers have to pay more to get “priority” (or faster) access to telehealth services.

The consequences “Priority Internet”

Priority internet service will work the same way “priority” boarding works on airlines. Airlines make boarding an airliner easier for some passengers than others so they charge you extra fees. With a premium price, you can board the aircraft early, before the overhead bins fill up. Or you can select a seat with more legroom. That’s how it will work with internet prioritization. Consumers and businesses will pay more to get to information more quickly than others or with less hassle.

Internet service providers actually hold up prioritization of telemedicine as a “benefit” of repealing net neutrality. But it’s likely to be better only for the company or consumers who pay extra for it. That creates winners and losers for a service that’s meant to be accessible to everyone, the same way we all are supposed to get equal service for home phones or electricity.

Pai states that this “feature” of speed discrimination will allow providers to “innovate and distinguish themselves in the market.” That’s corporate-speak for saying incumbents will charge more and make standardization harder, which will likely result in computing devices costing more, too.

“The draft FCC Order makes it clear that the FCC thinks these are precisely the kinds of ‘market negotiations’ that we should be seeing,” says Feld. “That the regulations adopted by the government in 2015 to stop abuses from happening are ‘heavy handed public utility regulation’ that ‘crushes innovation and reduces investment.’”

The end of net neutrality could also allow internet service providers to make their systems incompatible with other providers’ devices. “Imagine needing to design somewhat different telehealth applications for Comcast, Verizon, AT&T, CenturyLink, etc.,” Feld says. “This is, after all, how the cable box market works.”

There is a reason people hate cable and telecom companies. With no rules, no accountability, and no big stick or carrot when incumbents get out of line, do you really think broadband will get better? If broadband doesn’t get better, neither will new and promising services like telehealth.

One bright spot in all of this is community-owned broadband. These networks, which are accountable to local customers, are more likely to defend the four internet freedoms, mitigate a lot priority “boarding,” counter predatory pricing, and reduce the infringement of freedom of speech or the press.

One caveat, though. There may be a movement starting in Congress for legislative “reform” of net neutrality. In my opinion, we should fear this more than the FCC, because the largest telecoms could hijack the legislative process. We will get a bill that drips with the allusion of internet freedom but favors corporations over internet users.

Craig Settles is a broadband industry analyst, consultant to local governments, and author of Building the Gigabit City. His latest analyst’s report is Telehealth & Broadband: In Sickness and In Health.

 

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