Publications & Media

“Net Neutrality” Battle Heating Up in D.C. + Across America

Kegler Brown Legislative Update

For most of us, using the Internet has become part of our DNA. Whether it's surfing endless hits of useful (or useless) information on the web, backing up data, or downloading music and videos, the Internet has become a tool that we use daily. However, there are changes on the horizon that could affect our Internet habits.

On September 10, 2014, the world woke up, turned on their smart phone, tablet or laptop, and thought "Internet Armageddon" had fallen upon us. It was the day several websites changed its homepages to draw awareness to something consumers take for granted every day – an unregulated Internet.

Net neutrality, also called "open Internet," is the principle that all legal content on the Internet is treated equally. The primary issue surrounding net neutrality is how to govern it – how to make policies that preserve our right to communicate freely online. Will a one-size-fits-all policy allow wireless providers to deliver content when and where consumers want it? Before such a question can be answered, several additional questions must be answered so that businesses, entrepreneurs and consumers can grasp the issues.

The outcome of the current debate focusing on such issues may very well determine how entrepreneurial businesses develop new and exciting platforms on the web, and how we as consumers navigate the information superhighway.

Net Neutrality Background

Since he took office in 2008, President Obama vowed to keep the Internet "open" in several national addresses. In fact, he recorded a video message appealing to supporters of his version of net neutrality. In addition, the Federal Communications Commission (FCC) has adopted two comprehensive regulations to accomplish the administration's net neutrality policy. Both have been successfully overturned in the courts, with the most recent decision overturning most of the FCC's current body of rules from the U.S. Court of Appeals for the District of Columbia.

On February 2, President Obama, following the rationale of the court, took the position that the Internet should be a utility – the same as electricity or water. Specifically, the court stated that the FCC can regulate Internet service providers (ISPs) if the agency reclassifies them as "common carriers" under Title II of the Telecommunications Act of 1996 (Act) rather than broadband termed "telecommunications services" under Title I. The President then called on the FCC to propose rules "ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online." But, there is some discrepancy on what the new regulations will do within the FCC. On February 10, 2015, FCC Commissioner Ajit Pai released a statement and fact sheet on the President’s plan to regulate the Internet which tells a different story.

A letter signed by more than 100 companies, including Google, Facebook, Twitter, Amazon and Microsoft, have voiced concern about the possibility that the FCC would let Internet service providers charge tolls for "fast lanes" or discriminate against content (a.k.a. “throttling”). Instead, such companies stated:

"[The] Commission's rules should protect users and Internet companies on both fixed and mobile platforms against blocking, discrimination, and paid prioritization, and should make the market for Internet services more transparent."

In addition, a letter from more than two dozen broadband companies, including AT&T, Comcast, Cox, CenturyLink and Verizon, and CTIA - The Wireless Association, have voiced concern that subjecting ISPs to the common carrier paradigm would greatly distort the future development of, and investment in, tomorrow's mobile broadband networks and services. Advocates state that wired and wireless aren't the same. The CTIA released its own video message on how wireless is different.

Why is it Important?

Advocates of net neutrality suggest it lowers barriers of entry for startups, small businesses and other entrepreneurial types by safeguarding the Internet against an unfair or unlevelled playing field. Without it, they say, other companies—such as telecom companies—are able to interfere with an open marketplace, exploiting technologies by monitoring and controlling data sent via such companies’ networks.

To many, the Internet is the single greatest technology of our time. It is no secret that access to and control over the Internet are issues that will continue to grab headlines and the attention of the masses. At the very least, being informed of the issues and debate surrounding net neutrality is crucial for businesses and consumers alike.

What Happens Next?

If the U.S. adopts a net neutrality statute or regulation, it would not be alone. Other countries, such as Chile, Netherlands, and Brazil have such laws on the books, and the European Union voted on strict rules last April. Such laws prohibit telecom companies from charging higher rates for access to content requiring more bandwidth (for example: movie streaming).

The real questions for any federal statues or FCC regulations are:

  1. Competitiveness - What affect will they have on U.S. companies domestically and internationally?
  2. Innovation - What affect will they have on innovation and investment in broadband and wireless capacity for the cool, future apps we can only dream of today?
  3. Cost - What is the impact on consumers – increasing prices or slower advancement of future apps and other tech?
  4. Policing – What is “reasonable traffic management” and who is in the best position to manage Internet traffic – governments or ISPs?
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