Tuesday, April 20, 2010

Net Neutrality: Trusting the Phone Company and Cable Guy

      The wages of the Bush administration’s deregulatory sins, which ran up to hundreds of billions in the financial services meltdown, may soon take a toll on the nation’s high-speed Internet customers. The big telephone and cable companies offering broadband services are now free to play favorites among content-providers — to the potential detriment of customers — unless policy decisions made by the Bush-era Federal Communications Commission (FCC) are reversed either by the agency or Congress.
      The issue is “net neutrality,” a principle that companies such as Comcast and Verizon and the public interest advocates lined up against them all seem to endorse. Both sides in this high-stakes regulatory debate embrace the ideal of an Internet open to all, free and untrammeled. They differ, however, on who gets to set the rules to translate that principle into reality.
      Public interest groups say they want a neutral Internet, with private companies free to manage broadband access in sensible ways but with enforceable regulations preventing any discrimination between content providers. The big communications companies selling high-speed Internet links for a pretty penny also profess devotion to a wide-open cyberspace, but they want users to trust them and the marketplace to prevent discrimination or preferential treatment for favored providers.
      The FCC sided with the companies in two pivotal decisions in 2002 and 2005 that classified broadband access offered by cable and telephone companies as lightly regulated “information services” instead of “telecommunications services” subject to more extensive regulation. The decisions were led in succession by two Bush-appointed FCC chairmen, Michael Powell and Kevin Martin. Both were ardent deregulators except when it came to protecting the public from “fleeting expletives” on radio or television.
      The FCC decisions essentially freed Internet service providers (ISPs) from the obligations of common carriers — think, telephone companies — to transmit content without playing favorites. In explaining the decision in August 2005, Martin said that consumers want to use broadband Internet services to access any kind of content and companies can succeed only if they meet the customers’ demands.
      Martin saw the broadband Internet market as competitive and destined to become more so. Almost five years later, the marketplace hardly looks competitive, as customers who have ordered cable modems or DSL connections can attest. FCC research cited by the Washington Post’s tech columnist Rob Pegoraro shows that 78 percent of U.S. households have access to only two land-based broadband providers and 13 percent have access to only one.
      Even as it freed telephone and cable companies from regulation, the FCC exhorted them — in a nonbinding policy statement — to observe principles of neutral access to the ’Net. The companies all say they will. In 2007, however, some users of the Bit-Torrent file-sharing service discovered that Comcast was interfering with their use of the peer-to-peer application. Comcast eventually acknowledged as much, claiming a need to manage scarce network capacity in the face of the large amount of bandwidth used by file-sharing programs.
      Two public interest groups, Free Press and Public Knowledge, filed a complaint with the FCC, contending that Comcast’s actions violated the 2005 policy statement. The FCC, now headed by Democratic-appointed chairman Julius Genachowski, agreed that Comcast had “significantly impeded consumers’ ability to access the content and use the applications of their choice.” It further said that Comcast had several options for managing network traffic without discriminating against peer-to-peer communications.
      Comcast took the FCC to court, and earlier this month [April 6] the District of Columbia Circuit Court of Appeals ruled the commission had exceeded its jurisdiction. A three-judge panel that included one liberal and two conservatives unanimously ruled in Comcast v. FCC that the commission could not rely on its policy statement or generally phrased language in congressional statutes to enforce net neutrality on Comcast or other Internet service providers.
      Against this background, the controversy may seem to be nothing more than a dispute between movie downloaders and a company, Comcast, sensibly trying to manage what is ultimately a limited resource. But an Internet service provider freed of neutrality requirements could favor one content provider over another for other reasons — economic, political, or whatever. Favored providers — say, an entertainment network that struck a lucrative deal with the ISP — would be routed onto the high-speed Internet path while others would be stuck in traffic.
      Comcast disclaims any such intent, but the history of the Internet offers no confidence in that promise. Remember when the Internet was going to be ad-free? Look at the clutter now. Remember when Google was a futuristic do-gooding company? Look at the billions it’s making as the dominant gateway to digitized information. Any Internet company that disclaims a profit-maximizing motive needs to be regarded with a generous amount of skepticism.
      The FCC might be able to fix the problem by reclassifying ISPs as “telecommunications services” subject to common carrier obligations, but the ISPs are certain to challenge such a move. Congress could address the problem, but an eye-glazing “technical” issue would stand little chance of engaging lawmakers even if the climate on Capitol Hill were less partisan and the elections were farther away. For now, users have to trust The Phone Company and The Cable Guy to manage the Internet for the benefit of all. Users with complaints can expect to be on hold for a while.

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