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Navigating net neutrality

Navigating net neutrality
President Obama's statement on keeping the Internet open and free (The White House)

Ever since he first ran for the White House, President Obama has been a vocal supporter of net neutrality — the notion that Internet service providers shouldn't interfere with their customers' choice of online destinations and services. On Monday, Obama made that support more explicit, urging the Federal Communications Commission to enact stricter neutrality rules than it has ever contemplated. He's right about how vital it is to protect the openness and freedom to innovate that have characterized the Internet since its inception. But there's a real risk of regulatory overkill in what Obama has proposed.

The threats to the open Internet are largely hypothetical today. No Internet service provider has tried to charge a content provider or online service for improved access to the ISP's customers. The fear, though, is that the lack of competition in broadband — the vast majority of homes are reached by only their local phone and cable operators' wires — gives ISPs the opportunity and the incentive to charge tolls on their networks and, potentially, deliver some companies' content and services faster than their competitors'. This sort of paid prioritization could also give deep-pocketed online companies one more potential advantage over fledgling rivals, hurting innovation and entrepreneurship.

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Nevertheless, seemingly everyone with a stake in this debate says they want to preserve the status quo of an open Internet. The disagreement, and it's sharp, is over how to do so. Ardent net neutrality proponents want the FCC to treat ISPs as utilities subject to strict regulation under Title II of the federal Communications Act. ISPs and their allies, many of whom don't want any formal neutrality rules, want the commission to continue treating broadband access as an information service, subject at most to light regulation.

The problem with the latter approach, as the U.S. Court of Appeals for the District of Columbia concluded in January, is that it doesn't give the commission the authority to flatly ban Internet service providers from picking winners and losers online. The court tossed out the rules the commission adopted in 2010 to prohibit ISPs from blocking websites and discriminating unreasonably when managing traffic on their networks. Though the commission can impose such one-size-fits-all regulations on utilities, the court held, it has to allow information services some flexibility.

To many net neutrality advocates, including millions of Internet users who filed comments with the FCC, the way forward is obvious. The commission should reclassify broadband ISPs as utilities, then flatly prohibit them from prioritizing data for a fee. President Obama joined that chorus Monday, calling for reclassification and three prohibitions on ISPs: no blocking, no speeding or slowing of content streams and no paid prioritization. He also threw in two new proposals: applying all the neutrality rules to mobile networks and, possibly, to the deals ISPs strike with other networks that want to exchange traffic with them.

Obama conceded that Title II, much of which was written 80 years ago, is a poor fit for broadband. So he called on the FCC to formally waive (or "forbear from," in FCC parlance) almost all the provisions of the title, reserving only the rules necessary to stop ISPs from putting their thumbs on the scale of competition online.

It's appealing to think that the FCC could effectively restore its 2010 rules simply by substituting a new legal foundation for the one the court rejected. After all, those rules preserved the open Internet without deterring ISPs from investing in higher capacity networks. Such investment is of paramount importance, considering the growing demand for bandwidth from consumers spending more and more time watching high-definition video online.

But what Obama has proposed would require the commission to thread a regulatory needle. The FCC would have to find that there wasn't enough competition in broadband to justify using Title II to stop ISPs from behaving badly toward content providers, but that there was enough competition to waive Title II's price controls and service mandates and similar consumer protections. It would also have to provide a clear rationale for reversing its previous decisions to classify broadband as an information service.

Some opponents of using Title II warn that such rules could also become a barrier to innovation within a broadband network, preventing the development of valuable services that don't work without some type of special treatment for their data. These include remote health monitoring that may require a level of reliability not available on broadband today. Similarly, paid prioritization might not be threatening if it were done at the request and expense of the user — for example, if broadband users paid extra to have their favorite video streaming services prioritized over their emails, software updates and their kids' online video games.

The alternative proposed in May by FCC Chairman Tom Wheeler sought to achieve the same goals as the 2010 rules by using the same authority — Section 706 of the Communications Act — but providing more flexibility. It would still prevent ISPs from blocking sites, but would allow them to strike deals with content providers, apps and services if the agreements aren't "commercially unreasonable." The FCC would judge deals on a case-by-case basis, considering their effects on such things as competition and free expression.

Critics complain that, regardless of Wheeler's stated intent, his proposal would lead to fast and slow lanes on the Internet's "last mile" into the home. And even supporters of that approach concede that it's not well matched to the task of preserving the open Internet.

The best solution would be for Congress to give the FCC explicit new authority to bar ISPs from blocking sites and manipulating data for a fee unless directed to do so by their subscribers. But congressional Republicans have staked out a position against the FCC regulating the Internet, and Obama's declaration Monday is likely to make them even more hostile to net neutrality rules. That leaves the commission to address the threats to neutrality with the tools it already has, as poorly suited as they are for the job. The commission must beware of creating rules so rigid that they force ISPs and web-based companies off the path Obama is trying to keep them on.

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