FCC stakes claim to be the Internet’s referee

The light-speed changes in our digital world are now colliding with the dial-up crawl of America’s political and legal systems—with the future of the Internet at stake.

The crash was guaranteed last week when the chairman of the Federal Communications Commission (FCC) said Internet service should be considered a public utility, with ultimate oversight firmly in the lap of government.

“The Internet must be fast, fair and open,” FCC Chairman Tom Wheeler said.

Few disagreed. But skeptics say Wheeler’s proposal—which the full FCC will consider later this month—could expand the government’s Internet oversight far beyond a guarantee of “net neutrality,” the system in which virtually all online traffic is treated equally.

Declaring the Internet a utility, they said, could eventually lead to aggressive government interference in price, access and content decisions—dramatically reducing digital growth and usefulness by discouraging private investment and experimentation.

“It’s the camel’s nose inside the tent of regulation,” US Rep. Kevin Yoder of Kansas said. “Giving the FCC broad discretion to regulate content or pricing on the Internet or access…we don’t know where that authority will stop.”

Wheeler insisted that would not be the case.

“It is regulation to make sure someone is watching out for the consumer,” he told PBS. “We’re going to have a referee on the field.”

The courts and Congress will almost certainly be involved in the debate, as well as the FCC. But outsiders said Wheeler’s announcement clarifies the issues the public and private sector will face for years to come.

The rest of us are watching.

“People want their stuff to work,” said Lee Rainie of the Pew Research Center, which studies the Internet and public attitudes about it. “Anything that will guarantee that, going forward into the future, they’ll approve of.”

But who best guarantees a high-quality, functioning Internet: the government or business?

 

Access

The digital revolution has changed our lives, but not equally. Internet service may resemble utilities like electricity and water, but it isn’t yet considered as essential as either service.

That means the wonders of the Internet haven’t yet reached everyone. In rural areas and in pockets of center cities, the Internet remains beyond the reach of some consumers—too expensive to build or to buy.

Thousands of inner-city Kansas Citians failed to sign up for Google’s high-speed fiber-optic service, for example, raising fears of a widening and permanent digital divide in the community. On Thursday US Rep. Emanuel Cleaver wrote to Google asking for more efforts to attract low-income customers.

“Without a doubt, the investment Google has made into fiber in Kansas City has been an economic and entrepreneurial boon,” he wrote. But he added that “for the 25 percent of Kansas Citians who do not have Internet access at home, it is simply not enough.”

Through a spokesman, Google said the company is aware of the letter.

“Digital inclusion is a community effort, and each of us has a role to play in getting more people online,” the company said, pointing to outreach efforts and its inexpensive basic Internet plan. “Getting more people connected is a priority for us.”

Empowering the FCC to regulate Internet service providers as utilities might address uneven access. Wheeler’s proposal supports a universal service fund for broadband Internet “in the future.” Still, the details of how that would work—and who would pay the cost—remain unclear.

Some providers said they don’t expect an immediate government push for what’s called “digital inclusion” for underserved populations. The cost to providers is simply too high.

Wheeler’s plan does bar Internet providers from charging some users more than others or offering “fast lanes” at a cost premium. The concept of net neutrality means your sister’s cupcake store and Netflix will have the same access to customers on the Web.

Millions of Americans have petitioned the FCC to maintain net neutrality.

But providers say a tiered pricing system might allow them to collect more revenue from heavy Internet users. That could lead to more revenue, more innovation—and movies that don’t stutter and freeze.

Andy Huckaba, a Lenexa councilman, serves on an Internet committee for the National League of Cities. He says FCC access rules could make it harder for companies to expand the Internet into underserved rural areas.

Huckaba asked: “Have we ever seen a situation out there where more regulation, or a heavier regulatory touch, creates a more open system?”

 

Cost

The National Cable & Telecommunications Association is certain. If the FCC assumes control of the Internet, it said, “consumers will pay more for Internet service.”

Yet, the cost of Internet service depends on many factors, including the quality of service, state and local taxes, and especially competition.

Generally, Internet service in the US is slower, and costs more, than similar service hookups abroad. A 2014 study by the Open Technology Institute showed a fast broadband connection here costs around $70 a month typically, while a similar connection in Europe costs $54.

Kansas City, though, offers a relatively good Internet bargain. Time Warner Cable is the dominant player. But it’s seen competition in recent years from AT&T and Consolidated Communications (formerly SureWest). Then came Google Fiber, selling more broadband than consumers yet know how to use at a price—at least per megabit—unmatched elsewhere in the country.

Fifty dollars a month buys a Kansas Citian 42 megabits of speed, the study found, better than New York, Los Angeles or Washington, D.C.

Hong Kong consumers, on the other hand, get 302 megabits for that price. In part, that’s because building high-speed Internet in a dense community can be cheaper than in spread-out cities, sprawling suburbs or thinly populated rural areas.

Such confusing price structures suggest the potential for government intervention, the same way the cost of electricity is subject to oversight.

But the FCC plan specifically rules out government rate setting for now.

“Broadband providers shall not be subject to tariffs or other forms of rate approval,” the agency’s fact sheet says.

That may be particularly good news for mobile Internet providers, now locked in a furious rate-cutting battle. Wheeler’s proposed order classifies wireless broadband for your smartphone as a utility, just like wired Internet for your living room.

While some mobile companies such as Verizon sharply criticized Wheeler’s plan, Overland Park-based Sprint appears less concerned. In mid-January it wrote to the FCC endorsing utility status for broadband, as long as the FCC uses a “light touch.”

A spokesman for the company said Wheeler’s proposal appears to maintain that touch, although “Sprint will review the proposed rules to confirm that they give carriers sufficient flexibility to control their networks.”

 

Content

The FCC now regulates what licensed television and radio stations can provide to consumers. It also requires cable companies to carry certain channels—a rule the companies unsuccessfully challenged as a violation of the First Amendment.

Full control of the Internet might involve similar FCC involvement in free-speech issues.

Wheeler has promised “forbearance” of such content-based regulations. The FCC said that “an open Internet allows free expression to blossom without fear of an Internet provider acting as a gatekeeper.”

The FCC regulates phone service without playing a major role in what can be said on a phone.

Some open-Internet advocates are nervous anyway.

“We need to ensure that the FCC rules will actually do what is needed to protect the open Internet—and no more,” the Electronic Frontier Foundation said in a statement.

Other groups are worried about the privacy implications of FCC oversight. Government access to e-mails, Web usage records and other Internet transmissions might be made easier by a deeper role in the system.

Yoder has reintroduced a bill designed to protect some emails from government scrutiny. The measure would require the government to obtain a warrant to review e-mails more than six months old.

Under current law, those stored e-mails and digital records are considered abandoned and can be seized without a warrant.

“You don’t lose your constitutional rights because you send an e-mail,” Yoder said.

 

The future

None of these changes is expected soon. Wheeler’s proposal will face serious pushback from Republicans in Congress. Lawsuits are almost certain.

“This will be in court for years,” Sen. Roy Blunt of Missouri predicted. “The FCC is headed in the wrong direction.”

The clash of approaches suggests Internet users should prepare for more confusion over rules, service quality and cost.

“The global nature of the Internet…is creating a bit of chaos at the moment,” said Janna Quitney Anderson, director of the Imagining the Internet Center at Elon University in North Carolina.

“Because of the volatile nature of this consistently growing system with billions of nodes, the chaos is not likely to be settled anytime soon.”

Dave Helling / The Kansas City Star