What Happened to Net Neutrality?

Given the frenetic closing days of 2010 in Washington politics -- passage of the tax bill; repeal of Don't Ask, Don't Tell; approval of the New Start treaty; defeat of the DREAM Act and the Omnibus Spending Bill -- it is not surprising that the December 21 decision by the Federal Communications Commission on network neutrality was barely noticed. Unless you are a communications industry executive or one of the lawyers, lobbyists, or advocacy groups in a long-running debate, this fundamental move to regulate the technologies that increasingly manage our business or personal activities could not have made much of an impact. But it should have.

The FCC vote of three (Democrats) against two (Republicans) was meant to be the culmination of an already protracted review process that would make all wired and Wi-Fi technologies broadly accessible as they become increasingly dominant in daily life. From the outset, the Obama administration's stated goal was that all services should be fairly priced and provided in ways that make them available to the maximum extent possible on an equal basis to the public. So in the quieter interregnum of post-Christmas week, I pulled out my net neutrality file, read reports of the FCC decision and the raft of commentaries that appeared in the days around the FCC vote, determined to reach my own judgment on what had happened to this essential aspect of communications policy. The major conclusion of this exercise is that the net neutrality issue is actually far from resolved, despite the FCC action. In fact, by reaching what was essentially a compromise decision, the FCC set the stage for another round of contention, almost certain litigation, and possibly a move for congressional action to override the FCC.

In the meantime, what the FCC did was adopt rules that do assure access to material on the Internet -- Facebook and YouTube, for example -- without restrictions or extra pricing. But when it comes to wireless providers and mobile devices, the major companies such as Verizon and AT&T now have latitude, which they seem destined eventually to use to create tiers of service that are determined by price or other factors that the companies will determine. While the Internet is approaching universal usage, Wi-Fi and mobile technologies are evolving into the fastest growing sectors of communications. What the FCC has done is create a major administrative loophole that enables the providers to determine how those technologies will work -- although it does require them to be more transparent in explaining their decisions as they are made.

For those of us outside the orbit of the great corporations on one side or the open access/free speech advocates on the other, one recognizable analogy to the debate is the record of cable television. Over the decades, television has progressed from networks and a handful of independents to cable systems with hundreds of stations that gradually have become tiered so that premium programming is now substantially more expensive than the free television that was the standard a generation or two ago. The FCC has determined that the Internet should, in effect, remain open to all on equal conditions. But while not explicitly recognizing that wireless providers will create a class system of services, it has given them opportunity to do so -- which, given the record of corporations of all kinds in telecommunications, seems inevitable.

Julius Genachowski, the FCC chairman, hailed the outcome of the deliberations, saying: "for the first time, we'll have enforceable rules of the road to preserve Internet freedom and openness." President Obama's statement was equally enthusiastic. He said that the government would "remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse and that the democratic spirit of the Internet remains intact."

Both those declarations strike me as exaggerated. Having considered the arguments from a variety of viewpoints, I have come down on the side of Josh Silver, executive director of Free Press, one of the leading open access advocacy groups, who wrote in a letter to supporters: "For the first time in the history of telecommunications law, the FCC has given its explicit stamp of approval to online discrimination.... For wireless communications, the rule provides virtually no protections at all." Silver does acknowledge that the FCC actions discourage "unjust and unreasonable" practices. That means that dominant industry players will need to provide data in support of the rationale for their service changes rather than simply imposing them. But given their resources and determination, big corporations are likely to prevail in most instances.

The Obama administration's commitment to net neutrality -- the broadest possible access for the public to technology across all platforms -- has been significantly weakened in many respects by the FCC decision to split the Internet and wireless regulation. But rest assured that, whatever the FCC has done so far, the issues are not finally resolved. In a scathing editorial last week, the Wall Street Journal said: "The FCC's brazen power grab is already producing a welcome backlash on Capitol Hill. GOP Representative Marsha Blackburn says she'll introduce legislation to prohibit the FCC from enforcing net neutrality rules." The stakes are very high. The technology corporations, the communications industry interests, the open access advocates, Congress, and ultimately the courts will have much more to say on the subject, and they will all be in the fray as the impact of last year's decision takes hold in the New Year.