Consumer activists backing “net neutrality” expressed dismay Thursday as the Federal Communications Commission unveiled new rules of the road for the Internet that could allow leading Internet service providers such as Comcast and Verizon to give preferential treatment to customers willing to pay a premium.
Major Internet-based companies such as Google, Netflix, or Skype could pay providers for increased access to the “last mile” of broadband connections between the provider and consumer households, under the new FCC proposals. The revised rules were seen by many as a retreat by the Obama administration from the principle that all users of the Internet should be treated equally by the service providers — so-called net neutrality.
While larger Internet companies stand to benefit from the new proposals, smaller start-ups worry they could suffer if they are unable to obtain the same quality of broadband access.
Under the new rules, Internet service providers (ISPs) would be required to offer a baseline level of service to their subscribers. Companies would also be barred from discriminating against online content, but would be able to give preference to major users, like Netflix or Google, as long as they acted in a “commercially reasonable” manner.
The FCC has not been clear on what is considered commercially reasonable, but a spokesperson said that deals would be reviews on a case-by-case basis.
Open Internet advocates have blasted the latest proposal as a major blow to net neutrality, a policy which President Obama embraced in his first presidential campaign.
“This is not net neutrality. It’s an insult to those who care about preserving the open Internet to pretend otherwise,” said Craig Aaron, President and CEO of Free Press, a major advocate for open Internet competition. “The FCC had an opportunity to reverse its failures and pursue real net neutrality by reclassifying broadband under the law. Instead, in a moment of political cowardice and extreme shortsightedness, it has chosen this convoluted path that won’t protect Internet users.”
“The FCC is inviting ISPs to pick winners and losers online,” added Michael Weinberg, vice president at Public Knowledge, a Washington-based consumer advocacy group, said in a statement. “…This standard allows ISPs to impose a new price of entry for innovation on the Internet.”
House Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Rep. Greg Walden, the Oregon Republican who chairs the panel’s subcommittee on communications, in a joint statement criticized the net neutrality rules outlined by FCC Chairman Tom Wheeler as a “solution in search of a problem.”
“The marketplace has thrived and will continue to serve customers and invest billions annually to meet Americans’ broadband needs without these rules. Chairman Wheeler’s approach to regulation seeks to freeze current market practices, which will cast a chill on technological breakthroughs and cause American consumers to lose out,” the lawmakers said.
Mr. Wheeler has pushed back hard at claims that the new proposals would destroy open competition, calling the criticism “flat-out wrong.”
Mr. Wheeler said that proposal “will restore the concepts of net neutrality consistent with the court’s ruling in January,” referring to the D.C. Circuit Court’s decision to strike down rules that would prevent Internet service providers from charging content companies for faster broadband access.
“There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. As with the original ‘Open Internet’ rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted,” Mr. Wheeler said.
FCC Commissioner Mignon Clyburn predicted the proposed new rules would pave the road to greater online innovations.
“It clearly shows the federal government understands that technological advances can enable us to depart from traditional regulatory models and adopt new approaches, with lower administrative costs, which could spur even greater innovation from incumbent carriers, and new entrants,” Ms. Clyburn said in a statement.