By
Tom Still
MADISON
– Two few weeks ago during a Washington, D.C., “fly-in” of technology groups,
companies and carriers, one of five members of the Federal Communications
Commission held aloft the 332-page plan touted as necessary to treat all
Internet traffic equally.
Commissioner
Ajit Pai said the plan – which would give the FCC the power “to decide the
future of the online world” – would not be available for others to inspect,
including members of Congress, until after the commission itself acted.
His
point: Something as significant as rules that could alter the founding rules
and economic dynamics of the Internet are too important to be decided inside
the cloistered walls of a single regulatory agency.
Pai
was on the losing side Feb. 26 when the FCC voted, 3-2, to approve “net
neutrality” rules that aim to preserve competition online via more regulation.
He is among those who fear those rules may do precisely the opposite by ruining
the economic model that made the Internet one of the most successful
innovations of a generation.
After
the courts struck down past efforts to regulate Internet fees, President Obama
proposed to take it a new – or, perhaps, old – regulatory level. He asked the
FCC to reclassify Internet Service Providers as common carriers under Title II
of the 1934 Telecommunications Act, thus treating the service as a public
utility.
That
is essentially what the FCC did. The rules, which could take effect in about
two months, forbid Internet service providers from blocking or slowing the
traffic of their rivals, and ban new fees for faster download speeds that would
create so-called “fast lanes.” Among other things, the rules will affect how
some major companies that rely on fast download speeds, such as Skype or
Netflix, compete among themselves.
Republicans
in Congress appear determined to examine the FCC ruling and work to modify it
before the commission act on its power to regulate Internet transaction rates,
a step that critics say could harm investment and slow innovation.
“Net
neutrality” is one of those buzzwords that inspires populist support, but it’s not
as simple as the big guys conspiring to shove mom-and-pop websites into the
Internet’s slow lane.
Behind
the scenes, it’s also about a small handful of heavy users – the Internet’s
so-called “lane hogs” – hoping to avoid paying for the right to dominate
available capacity.
Internet
capacity today is being driven by video in its many forms, not voice, text or
website traffic. Video consumes huge amounts of Internet capacity and most ISPs
are struggling to keep up through investments in wireless networks and other
backbone services.
Remember
when Netflix Inc. delivered videos by mail? Today, Netflix and similar services
are accommodating customers through the Internet – and gobbling up capacity in
the process. With 37 million U.S. subscribers, Netflix alone generates
about one-third of U.S. online traffic during the evening hours on weekdays.
Defenders
of net neutrality have warned that, without new rules, smaller content
providers would be unable to pay higher fees to ISPs. Critics agree that’s a
legitimate concern but ask: How will ISPs pay for making network upgrades,
which cost billions of dollars, unless they are free to charge those who use
the most?
There
are Internet corporate elephants on both sides of the debate, of course, so
entrepreneurs are rightfully worried about not getting trampled in the tall
grass. If the Internet had not been free and relatively open over the past
20-plus years, entrepreneurs may well have been deterred from creating a wide
array of services and products. That kind of innovation has transformed the
economy and created millions of jobs.
Bills
expected to emerge in Congress will seek to uphold that principle of openness
but offer a legislative remedy that could encourage continued investment and
provide certainty in a regulatory landscape primed for lawsuits. Such a bill
would need to survive a presidential veto, however, or wait until after the
2016 elections.
The
Internet is one of the uniquely American innovations of the last quarter
century. It has functioned pretty well so far with light-touch regulation and
self-policing functions. The same regulatory approach that spawned the old Ma
Bell oligarchy and stifled telecom innovation for generations may not be a
timely fit for the Internet.
Still
is president of the Wisconsin Technology Council. He attended the mid-February
“fly-in” organized by TechAmerica, CompTIA and TECNA. Still is the former
associate editor of the Wisconsin State Journal.
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