Look out, internet: the FCC’s latest “net neutrality” plan is hardly neutral

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All websites are equal, but some websites are more equal than others.

That, in a nutshell, is the Federal Communications Commission’s latest response to a bombshell court decision in January that blew apart its rules on “net neutrality” — the principle that internet service providers can’t favor one type of web traffic over another when they connect consumers to the internet.

According to the Wall Street Journal (sub req’d), the proposed rules the FCC will announce on Thursday will bar ISPs from discriminating against certain websites, but “allow content companies to pay Internet service providers for special access to consumers.” In plain English, this means that an ISP like Comcast can’t slow down traffic from Netflix — but that it could cut a deal with one of Netflix’s competitors to make that competitor’s traffic go faster.

If that sounds like a strange definition of net neutrality, you’re right: an ISP that gives faster treatment to some sites is no more neutral than one that slows down other sites. The measure comes after FCC Chairman Tom Wheeler said in February that the agency would not allow “blocking” or “discrimination.”

The FCC is now reportedly trying to maintain a semblance of neutrality by requiring that ISPs who offer a sweetheart traffic deal to one company must offer the same deal to others on “commercially reasonable” terms. This may sound reassuring, but it’s not.

The reality is that any competitor that wants to enforce the “commercially reasonable” rule will first have to wade through a slow and expensive legal swamp and, in any case, only the biggest of the big will have the means to sue in the first place. A small site that wants those “commercially reasonable terms?” Forget about it.

The horse has left the barn

In case you’re unfamiliar with this debacle, the reason that we’re even discussing “special access” in the first place is because the FCC bungled its own rule-making process in the first place. Specifically, the agency failed in 2002 to classify internet providers as “common carriers,”  which in turn led a Washington appeals court to rule in January that the FCC’s Open Internet Order of 2010 did not apply to ISPs.

The upshot is that the January court decision resulted in an uncomfortable choice for the FCC: if the agency wished to re-impose net neutrality, it could either start regulatory process from scratch and do it right by stating that the ISPs are common carriers — or else it can just sort of muddle through. And that is what it appears to be doing with the proposed “special rates” and “commercially available” language.

This is not entirely the fault of FCC Chair Tom Wheeler. The reality is that the FCC rule-making process is a slow one, and that re-classifying the ISPs as common carriers would be a slow, laborious and possibly unsuccessful process. As such, without the power of the “common carrier” stick, the FCC will have to rely on lesser measures like the ones that will be proposed this week.

The proposed rules also reportedly do not attempt to address the issue of “peering” arrangements, which concern network interconnections (and choke points) that occur before website traffics arrives at its ultimate destination via the ISP. The FCC has not tried to regulate peering in the past, but recent peering disputes over Netflix has brought new attention to the issue.

The bottom line is that the chances of the FCC reimposing meaningful net neutrality requirements are fading by the day. And in the absence of such rules, we are watching the emergence of a new internet order where ISPs and big content firms will be able to engage in all manner of pay-to-play or outright favoritism — at the likely expense of rivals and consumers.

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