Crunch time for the internet

3 big questions remain as net neutrality heads to the end game

The FCC has scheduled a February 26 vote on net neutrality, touching off a final flurry of debate over how the agency should oversee the internet. The home stretch will be dominated by politics, public perception and, just maybe, by Google.

The policy positions are clear enough: consumer advocates, and most Democrats, believe the FCC should invoke so-called “Title II” provisions that would require broadband providers to treat websites alike, and stop them for creating special fast lanes for certain sites. The telecom industry, supported by Republicans, counter that such net neutrality rules could harm innovation.

But certain wildcards make the final outcome hard to predict. Here are three unresolved questions to watch in coming weeks:

How far will Republicans go to stop Title II?

A spate of stories in the last week, particularly in the Wall Street Journal and Politico, suggest the GOP could respond with a burn-it-down approach if FCC Chairman Tom Wheeler dares to reclassify broadband providers as public utilities under Title II. The threatened retaliation includes budget cuts to the FCC, new legislation to stamp out Title II or obstructionist antics to prevent Wheeler conducting an important spectrum auction. It’s unclear, however, if the Republicans would actually go through with all of these measures — or if Title II opponents are just raising them in the media as a way to intimidate Wheeler and net neutrality supporters into backing down.

The legislative threats, for instance, may be hollow since President Obama wields a veto pen for two more years, and he has made clear he supports Title II. Meanwhile, a move to scuttle the planned auction could backfire in light of the fact that a recent spectrum sale raised an eye-popping $45 billion for the federal government: would Republicans really forgo that type of money simply to stick it to Wheeler?

But given the increasingly ideological tenor of the debate, anything could happen between now and early February, when Wheeler’s final proposal is likely to be leaked.

What does the public believe (and do they care)?

Republicans have been attempting to equate net neutrality with over-regulation and bumbling bureaucrats. If such rhetoric proves persuasive, it will give Title II opponents the upper-hand in the public debate since policy decisions that smack of big government are unpopular with the public. (It’s true that Title II wouldn’t necessarily be a burden due to so-called forbearance rules, but these sort of details are typically too arcane for political sound bites).

On the other hand, Republicans’ position makes them standard bearers for the likes of Comcast, AT&T and Verizon — companies that oppose Title II, but that are also deeply, deeply unpopular with the American public. This means Democrats and net neutrality debates could sway the debate if they can frame Title II as pro-consumer, rather than as government meddling with markets.

Finally, the outcome will turn on how many people are paying attention in the first place. While the issue has gripped Reddit readers and parts of the Beltway, it’s unclear how many average voters know or care about net neutrality in the first place. The issue gained brief traction last fall thanks to comedian John Oliver and an “internet slow down” day, but that has been waning (the momentum could change again, however, if the topic pops up in the President’s State of the Union address on January 20)

Will Google get on board?

The last time the net neutrality debate crested in 2011, Google was front and center. This time, the search giant is sitting on the sidelines, offering only vague support for net neutrality, and leaving relative small fish like Netflix and Etsy, which lack any real lobbying clout, to lead corporate opposition to Comcast and the rest of the telecom industry.

But last week, Google signaled it might step into the fray after all. In a filing with the FCC, the company pointed out that the agency could use Title II to oblige incumbents to grant access to utility poles and other infrastructure. In practice, this would make it much cheaper for Google to deploy its Fiber technology — and increase the competition for broadband.

While the filing falls short of a full-throated endorsement for Title II, it does provide the FCC with new ammunition if it chooses to defy the telecom industry. And if Google does decide to go all in, its endorsement would likely prove to be a game-changer, leading to a shift in lobbying power, and causing the rest of the tech sector to follow suit in favor of Title II.

18 Responses to “3 big questions remain as net neutrality heads to the end game”

  1. Net Neutrality is mishmash that consumers don’t need to care about. Netflix has plenty of options and negotiating power when connecting to the internet. The FCC should actually do its job to protect consumers by paying attention to last mile connections where 30 years of failed competition has resulted in the slowest, most expensive internet connections in the developed world.

    Last mile is extraordinarily expensive to construct which is why phone and cable nets were built with monopoly protection and therefore rate regulated. Congress was bought off to remove rate regulation and cable bills tripled in a couple of years, proof that the supposed competition touted by Comcast and ilk was inadequate to protect consumers.

    We should be returning last mile to regulated utility status, just like power, water, sewer. We don’t expect sewer companies to compete; it’s just too expensive. Franchises would be granted to build gigabit or faster connections everywhere, which world experience shows should cost less than $20/mo. It should be divorced from all services, which services would then be able to compete on equal footing. This would also encourage startups; gigabit connections would let a lot of garage companies try to get established.

    Cheap, ubiquitous gigabit would also allow broadcast TV to be wirecast, freeing huge amounts of valuable spectrum to be repurposed to cell data use. Wirecast TV would cut out a significant number of middlemen, lowering costs and making any ‘channel’ available anywhere. It could also support emerging formats like 4k and higher, without the need for a decade of negotiation like the digital broadcast TV conversion took.

    Where is the FCC when you need them?

    • Actually, I am an app developer. And just like home consumers want the sense of ownership and control they gain if only they are allowed to pay for their ISP service, I want the ability to control my own fate. If I want to pay to get my data to my customers, I don’t want government regulations that say my only option is the best effort commodity Internet service the ISP’s are offering today. That I must wait for the rising tide to lift all boats, if i want something more. The tide will stop rising if no one is allowed to get out in front and take the lead on their own dime. That is how the Internet was built, by investment capital pushing out from the content provider end. Now we have Terabits of cheap long haul fiber, but you say this investment must stop at the ISP boundary, that the remainder of the route must be paid for by home subscriber fees. Idiotic.

      You should take notice of the fact the most vigorous proponents of network neutrality are not some rising upstarts being locked out by the financial power of large incumbents. It is in fact the largest content incumbents, like Netflix, trying to cut their operating costs by pushing more of that burden on to ISP subscriber rates. That is fine if you are pushing an established commodity like “TV,” and we never want anything more, but it will make absolutely impossible to develop anything new that doesn’t run on the current commodity Internet. Why would home subscribers pay for something they have never seen? And how can they ever see it if no one else is allowed to pay for it?

      • Daniel Sullivan

        Tim, I read your comments. You seem confused regarding most aspects of net neutrality. For instance, net neutrality doesn’t shift cost to consumers from companies like Netflix. Net neutrality prevents a new line of profit in the form of paid prioritization and paid peering, which Netflix has already been forced to pay. All of Netflix’a content fits in one server box, which Netflix offers to ISPs for free. Comcast refused this offer, and instead allowed its network to become artificially congested to the point that Netflix lost subscribers and was forced to pay Comcast. Thus, Comcast was profiting from being inefficient by use of monopoly power–it’s like what Enron did with rolling blackouts, only legal, unless we have net neutrality to promote efficient network management.

        • Nope, Netflix allowed their traffic to congest at the ISP edge because they refused to buy sufficient capacity from their three transit providers, Cogent, L3, and Tata; they shifted traffic around between pairs of these three until it slowed down instead of spreading it between them in a sensible way and buying more capacity from the other transit providers. The large ISPs then sold them the equivalent of transit at below-market prices, which would have pleased most companies. But Netflix signed these deals and then threw a tantrum because they want transit for free.

          Net neutrality is all about stifling innovation in order to preserve the dominant positions that firms like Netflix have in today’s status quo. Misguided consumer advocates who don’t understand network dynamics are for it, but people who understand how networks work are against it.

        • Well, it depends on how Network Neutrality is defined. If it just means prohibiting ISP’s from giving differential treatment to packets within their network, it won’t shift costs. But, if it means ISP’s can’t charge Netflix for the volume of data they accept into their network, then of course those costs will be spread across all ISP customers.

          As for the Netflix servers, I would like it too if ISP’s would host my boxes in their network for free. But Netflix must pay for a connection, same as you or I, or any other business.

  2. Okay, so let’s suppose we get the Network Neutrality you have been stumping for. Now, suppose I am an application developer and want to offer a new service that requires extraordinary network performance. I don’t know, let’s say it requires 10 Mbps with no packet loss, otherwise it is useless. Many home consumers have 10+ Mbps connections, but the ISP network may not be scaled to deliver that throughput on a sustained basis when other customers are active. Sure, the ISP can upgrade their network to do so, but if the current capacity is serving the needs of most customers, those customers will not be keen to pay for a network build out they do not need.

    Under Network Neutrality, the solution is for the home consumer who is interested in using my application to pay for a higher tier of service from the ISP. So, before they can even test my application they need to upgrade their ISP account and sign on for a higher monthly bill. That’s assuming the ISP even offers such an option, which they would not unless there was some demand for it. But, there can hardly be any demand for it unless people have had a chance to try it out.

    The historical solution to this chicken and egg problem was for capital investors to foot the bill for the initial roll out of a new application and stimulate demand. For example, YouTube only got off the ground because the founders had millions to burn to subsidize the delivery of streaming video. Net Neutrality would disable this critical engine for innovation. No matter how much money I was willing to invest, there would be no way for me to deliver my new service to end users, without first proving they would pay for it via their ISP. If Network Neutrality had been adopted years, ago we would still be on dial up modems.

    • I think your critique makes some sense, but it should also be pointed out that the need for a small startup/app developer to pay ISPs for extra infrastructure under the non-net-neutrality scenario is actually an immense strike against the startup/app developer because it’s so hard for small player like that to obtain the needed capital. More likely that large incumbents would move in first, blocking the upstart from ever competing to begin with.

      And anyway, since until recently net neutrality was the law of the land, it’s hard for me to buy your argument that small developers would be seriously harmed by net neutrality’s reinstitution, given the immense success enjoyed by small developers in recent years.

      • Actually, no, it is not so hard for a small startup to obtain the kind capital I am talking about because they only need enough to prove the concept. It is the big established businesses like Netflix that need to start pinching pennies to succeed at scale in their daily operations. The type of investment I am talking about is exactly what built the Internet. It’s not that the startup pays every ISP directly, but they tell their ISP/hosting provider what they need, and that operator makes arrangements to serve that need, possibly fostering new businesses in the process. That’s where the Akamai, Limelight, etc., CDN businesses came from.

        The concept of Net Neutrality was first coined in 2003, and the FCC did not issue any relevant rulings until 2005. It’s a new idea. In any case, it really wasn’t an issue during the first 15 years of rapid Internet growth because content providers first had to get their data to the ISP doorsteps, which meant building out data centers, long haul backbones, etc. Now that’s all built, so we should start seeing more of that investment going into the last mile. Except the established content providers don’t want to see that. They want it to come out of monthly subscriber fees instead.

        • Let me just add a little more. It’s not that Net Neutrality creates a bias against small companies, but it creates a bias against innovation, as if all we will ever need from the Internet has been built, and now it’s just a matter of dividing it up fairly. Netflix doesn’t want to see everyone playing some new interactive game instead of watching TV. So, they are not going to invent that new game. It will be a small company who doesn’t have a Netflix business that will take the risk.

          Also, many people will say that if the ISP’s charge content providers, the content providers will just pass those charges on to home consumers anyway. But, this ignores the importance of investment capital in today’s economy, where 5% of the people control 70% of the nation’s wealth. They can’t spend it all, so they invest it. And most of those investments don’t ultimately bring a return, because they have all the money already. But, those failed investments turn into freebies for the consumers, like all the infrastructure and expertise that was built during the first dot com bubble. Right now SnapChat is spending $30 million a month to host their free photo sharing service. Why is everyone so against letting some of that money take the pressure off home ISP subscriber fees? Who would have thought consumers would be insisting only they must be allowed to pay for their internet?

    • My parents were in the same situation, but now can get about 100-200 kbps from Verizon 3G hotspot. Getting everyone decent, affordable Internet access is the problem the FCC should be worried about. Not this silly Net Neutrality bogeyman. Then let startups and private investment capital push the edges forward without too much meddling.

      • John Lamica

        No, see.. now you’re contradicting yourself. You drone on about hands off regulation because the private sector will invest themselves. Then you turn right around and admit that your parents connection is pitifully slower than what they’re paying for. Why? No one invested? Go figure. Come on dude, I don’t need a weatherman to tell me which way the wind blows and I don’t need you telling me a laisser faire approach will work. It hasnt. Your parents situation will never improve without utility regulation just like they wouldn’t have electricity, phone, a road, ect if it wasn’t classified a utility.

        • If you re-read my posts you will see I am only arguing against Network Neutrality, not against regulation. In fact, I tend to be on the left on most issues. But this one is just stupid. Network Neutrality regulations will make ISP’s even less interested in spending the money to build out a network to reach you. I would not be opposed to government involvement in getting a basic level of Internet service, say in the 100-500 kbps range, to everyone. That has become essential to participate in our society. Watching TV on the Internet? Not so much. And, I never said my parents connection was slower than what they paid for. They know exactly what they were paying for.

          • John Lamica

            Lol no dude you’re so fucked up. Google just came out and filed a letter to the FCC stating that title II reclassification would make access to physical infrastructure, like utility poles, significantly easier. So YES isps WILL be more interested in reaching out to the millions of unserved citizens of the country.
            You people are just so wrong about this stuff, it’s so easy to pick apart your bullshit. Nothing you’ve said is valid or meaningful. You’re just a lying babbling idiot reaching out into the abyss for facts that aren’t their. Everyone wants net neutrality including the president of the Free World.

    • Daniel Sullivan

      Tim, you clearly don’t understand internet architecture. First, you’re wrong in assuming that net neutrality limits efficient data delivery–you are also wrong in stating that we have not have net neutrality. In fact, we’ve had net neutrality for 25 years, and it has been legislatively enforced for 10 years. Secondly, in your 10 Mbps scenario, the solution is peering (allowing ISP direct access to your data via a local data center or hosting your data at local ISP). Under a net neutral system, no-fee peering is encouraged because both the content producer and data delivery service have a vested interest in delivering data in the most efficient manner possible. Conversely, without net neutrality, ISPs can profit from inefficiency by charging access fees to deliver your content, and bigger competitors will just price smaller ones out of the market. Tech startups overwhelmingly support net neutrality, so stop lying and saying you’re an app developer.

      • I think he’s got a good handle in Internet architecture, there’s nothing in it that says “all packets are equal”.

        The name “network neutrality” wasn’t coined until 2002, and there’s no reference to it in any of the RFCs.

      • Silence Dogood

        I find it interesting that Tim is actually using numbers and dates for reference while you are simply saying “you’re wrong” or “stop lying”. Great logic guy, keep up the trolling. It totally makes you believable.

      • Peering doesn’t help if the ISP does not have enough internal capacity to deliver my data, as in the scenario I outlined. You are the one who appears not to understand how the Internet works, and seem to be just parroting something you read somewhere. Profit from inefficiency?? In fact, the current system where Netflix pays by the volume of data they send is what encourages efficiency. The main thing that has changed in recent years is heavy capital investment on the content distribution side has driven hosting and transit costs down to the point where the last hop ISP makes up a larger share of the cost to move data from point A to B. So, we are seeing a greater share of content provider bandwidth spending going to the final ISP as opposed to getting it to their doorstep.

        I have not see the list of which companies are on record in support of Net Neutrality, but I would guess that most of that is the influence of silicon valley VC network, rather than any rational analysis of their own operations. Obviously, it is good for high bandwidth Internet businesses if you can get ISP’s to be your bill collector, but most content businesses don’t send enough data for this to matter. And, of course, consumers universally despise cable and telephone companies, so it’s an easy choice to go on record against them, whether it’s good policy or not.