Top Tech Companies Blast FCC Net Neutrality Proposal

A joint statement was signed and issued by numerous tech companies, including Amazon, Google, Facebook, Netflix, and Yahoo, to share a simple message about the Federal Communication Commission’s most recent policy proposal:

this represents a grave threat to the Internet.

The total number of companies that signed this letter numbers over 100 and includes other big names like Dropbox, Microsoft, Reddit, Tumblr, and Twitter. They are reacting to the potential that “the Commission intends to propose rules that would enable phone and cable Internet service providers to discriminate both technically and financially against Internet companies and to impose new tolls on them.”

What is this all about? Well, back in January, a Federal Appeals Court invalidated the FCC’s Open Internet rules. Basically, these rules require Internet service providers (such as Verizon, who won that court case) to treat all traffic on the Internet the same; they cannot slow down or speed up certain kinds of data arbitrarily. Nowhere is this more apparent than with Netflix, whose performance on the top ISPs has been declining, leading to accusations that those ISPs are intentionally slowing down their speeds as a means to make Netflix pay for a “fast lane” for their streaming service.

Beyond some of the obvious concerns about censorship or the way Comcast’s own streaming service can benefit from a slowed-down Netflix, fast lanes can have subtle effects. A variety of studies have demonstrated the effects of just slightly slowed website load speeds, which include lowered credibility, fewer sales per visitor, and higher exit rates. In other words, slowing the typical website down by just one second might be undetectable to most web surfers but could have major effects on the effected websites.

With this in mind, the FCC issued the so-called Open Internet Order in 2010, which banned ISPs from interfering with Internet traffic. They were not to treat any data transfer differently from others; Netflix can use much of their bandwidth and that’s okay, because that is apparently what their users want. Unfortunately, the Appeals court ruling of January this year declared that the FCC does not have legal authority to enforce the Open Internet Order. Ever since, the FCC has been scrambling to find some alternative rule that they are legally justified to enforce.

So far, FCC chairman Tom Wheeler explained in a blog post last week that he is proposing to make legal certain fast lane arrangements between ISPs and web services so long as they are on “commercially reasonable terms.” Further, he claims that any ISP that is “degrading service in order to create a new ‘fast lane’ would be shut down,” in addition to promises that these agreements cannot have the effect of hurting competition between ISPs or web services, censor political opinions or activity, or promote an ISP’s private interest at the expense of a web service (think about the Xfinity Streampix and Netflix debate here).

While this sounds all well and good, he claims the problem with the current system is that violations are decided on an ad hoc basis, with the FCC having to react to violations of open Internet principles after the fact rather than preventing them in the first place. This does not seem to do any better. He does say that he reserves the right to reclassify ISPs as “common carriers,” if necessary; this would give them the legal basis to enforce the Open Internet Order that was invalidated by the Appeals Court.

The letter claims that the proposal allows ISPs to “discriminate both financially and technically against Internet companies and to impose new tolls on them.” In other words, the companies that signed on to the letter do not see this playing out as Wheeler does. For the FCC, their proposed rule would lead to a strong baseline service available to all with a few special contracts between ISPs and services like Netflix to ensure top quality. The companies think that this will turn into a de facto Internet toll, where all but the simplest websites will need to pay every ISP in order to make sure everything works reliably.

The letter concludes:

This Commission should take the necessary steps to ensure that the Internet remains an open platform for speech and commerce so that America continues to lead the world in technology markets.

This is not a desperate, hail-mary type of public relations pitch on the part of these companies. As Wheeler emphasizes in his blog post, “this is not a final decision by the Commission but rather a formal request for input on a proposal as well as a set of related questions.”  He explains further that his proposal states, “all options for protecting and promoting an Open Internet are on the table.”

A vote on the matter among FCC commissioners has been scheduled for May 15, but one commissioner has asked for a delay, citing “tens of thousands of e-mails, hundreds of calls, [and] commentary all across the Internet” as well as a need for “giving the American public opportunity to speak.” No decision has been made on her request at this point.

The companies that make the Internet a service worth accessing have made their opinions known in a big way. Whether they can affect the final FCC decision has yet to be seen.

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