After multiple failed attempts to push net neutrality bills through Congress, and a court-overturned attempt to force similar regulations by an order of the Federal Communications Commission, the administration is now turning to incrementalism in its ongoing crusade to bring the Internet under federal regulation. This approach toward treating the Web as a public utility has almost everyone unhappy — from Internet-freedom advocates to some of the White House's staunchest corporate allies — and would strongly inhibit innovation. The FCC took a first step in that direction recently, with a 3-2 party-line vote passing a scaled-down "net neutrality" order designed to placate the concerns of Internet-service providers (ISPs).
The "Open Internet Order," an FCC order adopted in December 2010, intended to place strict federal regulations on ISPs, forcing them to treat all data equally. Veiled under the pretense of "fairness," these net neutrality regulations could have prevent ISPs from providing efficient Internet service to consumers, as all data are not created equal, and different types of Web content (simple text and live streaming video, for example) require varying degrees of service. Under this order, ISPs would not have been allowed to differentiate between simple and complex data, prioritize high-demand content such as Netflix or take other steps to compete, innovate and attempt to make Internet service better for their customers.
Fortunately for everyone who uses the Internet — from developers all the way down to casual Web browsers — a federal court struck down the order earlier this year, determining the FCC lacked legal authority to impose such a regulation. Rather than accept defeat, the administration moved on to Plan C, pushing the politically unpopular policy through yet again, this time softened to allow traffic to be differentiated, but only if bureaucrats at the FCC consider it "commercially reasonable" on a case-by-case basis. This version of net neutrality has Google, Facebook and other White House-friendly tech giants in an uproar.
Ironically, the new net neutrality order is also an admission that net neutrality 1.0 would never have worked. As a concession to both ISPs and common market sense, the FCC's order allows for tiered service, creating a "fast lane" that large content providers such as Netflix can buy into to ensure that they'll be able to deliver their service at high speeds. The original net neutrality bill would have forbidden ISPs from taking any steps — whether paid fast lanes or other multitiered service plans — to differentiate between types of content, to the delight of left-leaning corporations such as Google, who do not want to pay for access to bandwidth. They want consumers to pick up the full tab for multibillion-dollar network infrastructure.
It's encouraging to see that the White House may finally recognize that markets should determine who pays for what. A flat prohibition on charging content providers for downstream bandwidth would make the Internet a game of king-of-the-hill that is closed to innovation and upstart competitors. Established content providers such as Google would flood the tightly regulated Web with one-speed-fits-all content, leaving no avenues for competitors to offer faster or more innovative service. In effect, the Internet would become another public utility, like landline phone service — which has worked out wonderfully for telecommunications conglomerates, but is permanently closed to innovation.
Tiered service models may be part of the Internet's future, but the federal government shouldn't have a foothold in establishing tiers and who may buy into them. The new FCC order will still give federal regulators sweeping authority over the Internet and put the government in a position to turn the world's greatest force for democracy and innovation into a rigid system of insiders and outsiders.
The administration may think it's creating a more market-friendly net neutrality, but there's no amount of federal regulation that would make the Internet more "open." It's modestly encouraging that the White House realizes that tiered service models make more sense than net neutrality — much to the chagrin of their friends at Google — but the government shouldn't be involved in dictating the tiers ISPs can offer, or deciding what is "reasonable." The Internet works for consumers and innovators in large part because federal regulators aren't empowered to stop its growth, and any of the net neutrality plans the FCC has proposed would bring this to a halt.
Erik Telford is senior vice president of the Franklin Center for Government and Public Integrity.