The FCC’s net neutrality rules: 5 things you need to know

Advocates for open access to the Internet were popping champagne corks on Thursday after the Federal Communications Commission voted in favor of reclassifying broadband Internet as a public utility. In addition to regulating fixed broadband lines that go into your home, the FCC vote also extended public utility rules to mobile broadband for the first time.

The FCC vote means that Internet service providers (ISPs) will be required by law to respect the principles of net neutrality. But what exactly does that mean, and why are so many people celebrating the FCC’s ruling while others are cursing it?

Here’s a quick explainer.

What does “broadband is now a public utility” mean?

On Thursday, the FCC voted 3-2 down party lines to reclassify fixed broadband lines under Title II of the Telecommunications Act. This turns ISPs and mobile broadband providers into public utilities. As a result the companies will be more highly regulated than they were in the past.

In terms of net neutrality, ISPs will be prevented from offering “paid prioritization,” or fast and slow lanes where customers and/or web services must pay the ISPs for better speeds for certain content. It also prevents ISPs from actively blocking access to online content or from punitively throttling (slowing down) certain kinds of traffic, such as torrents.

Were these regulations even necessary? Are ISPs doing this kind of thing?

There has been concern for some time that ISPs would experiment with slow and fast lanes, but the companies never actually tried it out. The ISPs and mobile broadband providers have, however, deliberately throttled traffic.

Comcast began throttling users who were causing large amounts of traffic on the company’s network back in 2009. The throttling efforts were targeted against so-called bandwidth hogs, such as people downloading large amounts of torrents. Comcast was also hit with a class-action lawsuit (settled in 2010) over previous throttling efforts that began in 2007. Comcast was required to pay up to $16 million as part of the settlement.

More recently we’ve seen reports of BitTorrent throttling rising in the U.S.

Even mobile broadband providers have been getting into throttling. Last summer, Verizon publicly announced a throttling policy for heavy LTE data users even if you’re on an unlimited data plan. That policy was put on the back burner in October a few months after the FCC got involved.

Will ISP innovation die under Title II?

That’s what some ISPs and other opponents of the FCC’s ruling are saying. They argue that more regulation will mean less investment and innovation in broadband.

From a consumer’s point of view, however, it’s hard to argue that American ISPs were innovating on Internet delivery and working hard to improve service under the previous “light touch approach.” For starters, a lot of major ISPs are despised by their customers due to poor customer relations.

You can also find instances where major broadband providers refuse to increase broadband speeds or expand capacity. America has some of the slowest, yet priciest broadband in the world, according to an October report by the Open Technology Institute.

Last May, Tier 1 global network provider Level 3 said five major U.S. ISPs were deliberately failing to increase their interconnect capacity with Level 3, resulting in near constant web traffic congestion. Level 3 did not name the companies, but did say that all five had dominant or exclusive market share where the congestion was happening.

Level 3 has also accused Verizon of failing to improve interconnections at data centers where Level 3 and Verizon networks meet—an improvement that Level 3 said would be very inexpensive. The result? Deliberately constrained capacity that causes poor Internet speeds at home, and degraded Netflix performance more specifically in this case.

Arguably the most innovative ISP in the United States right now is Google Fiber, which delivers blazing fast 1Gbps speeds over the “last mile” to homes in select markets. Google Fiber has had the effect of increasing competitor speeds and service in areas where it operates—competition that arguably would not have happened otherwise.

Does Title II mean more competition in broadband?

Probably not. As part of the FCC vote on Thursday the commission explicitly ruled out forcing the ISPs to share their networks with competitors. That means market dominance by one ISP in local markets will not be broken as a result of the FCC ruling. Some are arguing that because of this the FCC ruling does little to change problems with U.S. broadband services, such as the aforementioned high prices and slow speeds.

Now that broadband is considered a public utility is the fight over?

Heck, no! When Verizon is so incensed about an FCC ruling it protests with a blog post written in Morse Code you know this issue is headed to the courts.

Congress is also getting involved. Prior to the FCC vote on Thursday, there was already a movement lobbying Republican lawmakers in Congress to undo a potential FCC ruling in favor of reclassification.

In the words of Han Solo, “it ain’t over yet.”


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