The FCC Just Approved A Proposal That Will Completely Change The Internet As We Know It

Another Win For The Big Guy

The FCC voted today 3-2 to approve creation of an "internet fast lane."

This will have massive ramifications for how all internet companies operate in the future. 

According to the FCC's proposal, companies that deliver content over the internet like Netflix, Hulu, and Business Insider will be able to pay internet service providers (ISPs) for direct access to customers on a given network. That means their content will reach ISP subscribers much faster than content from companies that don't pay ISPs for direct access.

For example, Netflix is already paying Comcast and AT&T for direct access to customers, and it has reported those customers are seeing faster streaming speeds.

But as we wrote yesterday, the proposal gives an unfair advantage to companies that can afford this "fast lane" to consumers. It makes it a lot harder for a new internet content startup to come in and compete with established giants. And without competition, those giants would be free to charge you more.

On the other hand, the FCC's proposal says ISPs won't be allowed to purposefully slow down content from internet companies that don't pay them directly. Still, this gives an unfair advantage to companies that can afford to pay.

It is important to note that the FCC's proposal is just that — it isn't set in stone. The final rules won't be set for several more months. In the meantime, the FCC is open to public comment on its proposal. But based on today's 3-2 vote, it sounds like most of the FCC commissioners are already on board.

The tech community has been up in arms about this decision, so we'll see if it can organize itself and stop the rule from happening. Most advocates of net neutrality want broadband internet classified under a rule called Title II, which would treat broadband internet as a utility. Phone lines got the Title II distinction back in the dialup internet days.

Here's a deep look into why the FCC's proposal is a disaster for the internet >>

Here's the full announcement from the FCC:

The Federal Communications Commission today launched a rulemaking seeking public comment on how best to protect and promote an open Internet.  The Notice of Proposed Rulemaking adopted today poses a broad range of questions to elicit the broadest range of input from everyone impacted by the Internet, from consumers and small businesses to providers and start-ups. 

The Internet is America’s most important platform for economic growth, innovation, competition, free expression, and broadband investment and deployment.  The Internet has become an essential tool for Americans and for the growth of American businesses.  That’s because the Internet has been open to new content, new products and new services, enabling consumers to choose whatever legal content, services and applications they desire.

The FCC has previously concluded that broadband providers have the incentive and ability to act in ways that threaten Internet openness.  But today, there are no rules that stop broadband providers from trying to limit Internet openness.  That is why the Notice adopted by the FCC todays starts with a fundamental question: “What is the right public policy to ensure that the Internet remains open?”

The FCC proposes to rely on a legal blueprint set out by the United States Court of Appeals for the District of Columbia Circuit in its January decision in Verizon v. FCC, using the FCC’s authority to promote broadband deployment to all Americans under Section 706 of the Telecommunications Act of 1996.  At the same time, the Commission will seriously consider using its authority under the telecommunications regulation found in Title II of the Communications Act.  In addition, the Notice:

Proposes to retain the definitions and scope of the 2010 rules, which governed broadband Internet access service providers, but not services like enterprise services, Internet traffic exchange and specialized services.

Proposes to enhance the existing transparency rule, which was upheld by the D.C. Circuit.  The proposed enhancements would provide consumers, edge providers, and the Commission with tailored disclosures, including information on the nature of congestion that impacts consumers’ use of online services and timely notice of new practices.

As part of the revived “no-blocking” rule, proposes ensuring that all who use the Internet can enjoy robust, fast and dynamic Internet access.

Tentatively concludes that priority service offered exclusively by a broadband provider to an affiliate should be considered illegal until proven otherwise.

Asks how to devise a rigorous, multi-factor “screen” to analyze whether any conduct hurts consumers, competition, free expression and civic engagement, and other criteria under a legal standard termed “commercial reasonableness.”

Asks a series of detailed questions about what legal authority provides the most effective means of keeping the Internet open:  Section 706 or Title II.

Proposes a multi-faceted process to promptly resolve and head off disputes, including an ombudsperson to act as a watchdog on behalf of consumers and start-ups and small businesses.