FCC will have to drop a bombshell to solve net-neutrality conundrum The Federal Communications Commission chairman's decision to draft new rules ensuring net neutrality principles are applied to internet traffic hasn't impressed many, and it's becoming clear that his agency will have to make an all-or-nothing decision on the issue. The January appeal court decision in Verizon v FCC gutted the …
The groundhog said that winter would be with us for a while, and it will. Verizon will continue to "throttle" various types of use without actually discriminating directly against any one. "So sorry, capacity constraints" and the like.
FCC will have a go at new regulations but will soon find that carriers have made an end-run. So it will finally be forced to tell the industry that you can't be both a carrier and a value-added supplier and have the same rules apply to both. The rules are going to be different and, as usual, the devil's in the details.
But the current trajectory is unsustainable, with most people in the U.S. having only a single broadband service (and many with DSL, which usually isn't "broadband"). Since there is no choice, market forces cannot possibly work. So there must be regulation. With value-added services carried on top of broadband there is choice and there the market can pick winners and losers.
No kind or degree of government regulation will solve this problem; rather, further government intervention will only extend this winter. The only solution is to remove all government-granted, geographical monopolies, after which the market will bring the greatest good to the greatest number of consumers. Spring will arrive, if we give it a chance.
Good points as far as they go. There's just one problem.
Given the length of the prior government intervention, the incumbents have built up considerable leverage which they probably can use to continue to distort what should have been the natural market. We may need to break up the current oligopoly into smaller groups. Say 10 years during which they cannot merge with any of the smaller groups created by a court overseen breakup. I'd probably count a new group merging with one of the broken up groups as the broken up group for purposes of further mergers within the 10 year period.
"So it will finally be forced to tell the industry that you can't be both a carrier and a value-added supplier and have the same rules apply to both. "
All it takes is for one ALF (Administrative Law Judge) to declare they are indeed "Common Carriers" and the band can pack up and go home, dance over. If it looks like a goose and acts like a goose, you're goosed!
This is of course the key point - "Controversial is understating it somewhat. Internet providers are going to fight such a move tooth and nail, since the prospect of such a ruling would wipe billions off their potential future earnings."
Billions off the bottom line, billions remaining in their customers' bank accounts.
Does the internet exist to allow people to communicate, or to allow companies to make humongous profits?
Silly me - forget it.
What about going after carriers for performing illegal wiretaps? Deep packet inspection in a wiretap, without question. The only way ISPs get away with it is by using the provider exception. If the government takes the position that inspecting content and giving preferential treatment to traffic that benefits the ISP for business reasons is not a valid "self protection" then the provider exception might not apply and then what the ISP is doing is illegal.
Because under the law as written they aren't carriers they are service providers. This is the crux of the Appeals Court decision. And it is also the part which requires Congress to rewrite the law. It cannot legally be done by Executive order or FCC power grab.
There are still reasons to throttle. If Netflix is using too much of your bandwidth relative to Pandora, throttling Netflix may be more profitable than building out your network. Especially if you can spread enough FUD that users don't know the provider is the cause of the problem.
In the end, the only thing that keeps them honest is the ability of the consumer to switch to a new service.
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