FCC Proves Yet Again That It's Out to Kill Net Neutrality

Well, that meeting of the Federal Communications Commission earlier today was certainly a lot of sound and fury signifying next to nothing.

FCC Chairman Tom Wheeler, despite weeks of backlash, still wants to allow Internet Service Providers like Comcast and Verizon to "offer" different levels of service to internet companies, although he refused to call them a "fast lane" and a "slow lane” and refused to recognize how those arrangements up the food chain affect consumers and a neutral internet.

He is refusing to recognize reality.

His concession to those of us who value a neutral internet is to allow it on a case-by-case basis, guaranteeing that nothing will ever get settled, and internet companies will be allowed to bleed money.

The other commissioners weren't exactly profiles in courage. The Republicans, Ajit Pai and Michael O'Rielly, both former GOP Hill staffers, kept to the orthodoxy prescribed by Comcast, AT&T and Verizon. Rather than take the side of the many businesses that do business on the web, they favored the few, although in various disguises. Pai said the FCC should defer to Congress, forgetting that once upon a time Congress created the FCC to regulate “communication by wire and radio.” O’Rielly warned about “monopoly-era rules,” forgetting that in many places real broadband is a monopoly.

Sure, the FCC will ask whether the telecommunications services that carry internet content should be regulated like utilities (Title II of the Communications Act), and there will be people who make an argument for it.

Here's the rub. The damage is already done. It was done months ago. And the FCC did nothing to stop it. Regardless of what rule the FCC finally approves, and defends through the years of court challenges, it already established the bad precedent that big ISPs can cause traffic congestion, demand tribute to fix it, and get away with it.

As this chart shows, the "offer" is one that can hardly be refused when a company like Comcast slows down traffic during the "normal" course of doing business, but it miraculously gets back to normal when some extra coin jingles in.

In another world, this might be called "extortion."

Last February, Netflix had to concede defeat. It asked the FCC for help, got nothing, so it paid its "Wheeler Tax" so customers wouldn't suffer. The Wheeler Tax is what streaming or other Net companies have to pay in order to bring their service back to what it should be. Netflix hasn't said how much more it has to fork over from what it was paying Cogent, a third-party carrier. Whatever it is it is too much. In fact, Netflix is now paying twice. It didn't take long for Verizon to demand similar tribute.

When Wheeler approved Comcast’s gambit and the others were silent, big Internet companies could see the skywriting in the cloud. Google, one of the 100 or so companies signing a pro-Net Neutrality letter to the FCC, caused some of this mess by cutting a deal with Verizon that the former hapless FCC Chairman Julius Genachowski endorsed, in principle having weak rules for wired connections and none for wireless.

Now, Google has a big business in YouTube, which streams video. They don't want to pay the Wheeler Tax, so now all of a sudden, they are back in the fold. The same goes for Amazon, which wants to be a streaming competitor. After staying out for a while, Amazon, like Google, was among 100 companies signing a letter protesting Wheeler's proposals.

In fact, it looks like the whole band is back together. Microsoft and Yahoo! were early supporters of Net Neutrality, but bailed when the fight got serious in Congress eight years ago. Now they are signing anti-FCC letters, too. Nice to have you back, guys.

Here's the problem: regardless of what the FCC does, Netflix is still stuck paying the Wheeler tax to Comcast. Remarkably, their congestion issues with Comcast seem to be dissolving. Not so much for Verizon, even though Netflix is paying them the Wheeler Tax also.

Now Wheeler is talking about allowing pay-for-play on a case-by-case basis. Sure, that will work. Instead of one big case, there will be dozens. But it is wrong anyway you cut it. Netflix is still out millions. The others may be too. Carriers like Cogent, which formerly handled Netflix traffic, lose millions in business that goes directly to the bottom lines of Comcast and Verizon because of simple, unchecked, market bullying.

The basic question is what would be regulated.

Wheeler thinks he's offering a compromise by putting something into the proposed rule to ask about regulation of high-speed services, although it’s not clear how he would distinguish between the broadband service consumers get and the broadband services that exist higher up the food chain, such as when Netflix sends programming through Comcast to consumers. Legally, it's all broadband. Where would regulation of one piece stop, and the other start? Pai and O'Rielly have predictably already started whining about the horrors of "regulating the Internet." No, the Internet wouldn't be regulated. The telecommunications service that allows the Internet to exist would, as services did before now which made the early online world possible.

The difference is easy. Wired.com and every other Web site is carried over high-speed connections, wired or wireless. It's those connections that are the service. Wired, Amazon, Netflix and on and on are the content that is the Internet. The FCC can stay out of that, but the law gives them clear authority to overturn the FCCs of the past and create once and for all an Internet that doesn't play favorites at any point along the line.

The FCC meeting certainly displayed as fractious an FCC as has ever existed. If the writing of the proposed rule caused this much controversy, the deliberations following the July 15 comment deadline, and following reply comments, should be painful, not only for the Commissioners and their staffs, but for consumers and companies that want to do business online as well.

• Editor: Emily_Dreyfuss[at]WIRED[dot]com*