The Federal Communications Commission has announced that it will work on a new set of rules to enforce open Internet access for all users -- ensuring equal speeds to everyone on the web, avoiding giving preference to traffic from some sources over others. The move comes just a month after a federal appeals court struck down earlier FCC rules.
The concern is that the Internet service providers could become gatekeepers and make it more difficult for smaller companies that couldn't afford additional fees to compete in the market -- something the FCC wants to prevent.
The FCC had previously written rules "requiring transparency and prohibiting blocking and unreasonable discrimination" by Internet service providers. Some major ISPs have shown an interest in capping the amount of bandwidth consumers have. Some have already shown indications that they might charge to favor certain traffic.Although the potential for subsidized video and other high-bandwidth services could have appeal for many consumers and companies, there is a hidden price. Young companies with innovative offerings might not be able to afford subsidies and find themselves effectively drowned out by more established firms. The net effect would be to make bringing innovation to the market much more difficult for all but the firms with the best funding.
Meanwhile, the telecommunications industry argues that as traffic increases, particularly when video moves to the new super high-definition 4K standard, they are forced to invest more to handle the traffic and need various control mechanisms, including caps on consumer usage and pricing that reflects the increased costs.
Critics counter that the ISPs taken as a whole already make money from both parties, as the companies and the consumers both pay for traffic they use. The concern is that some companies would be favored, while others not.
Netflix (NFLX) has already found its reception among telecommunication companies has been getting chilly. The result, according to Netflix, has been slower speeds at prime viewing times for both Comcast (CMCSK) and Verizon (VZ) customers. Both offer paid TV services and could lose revenue if people moved away from traditional television delivery toward the Netflix streaming model.
The FCC's bid will have some significant challenges, even within the agency. Commissioner Matthew Berry called net neutrality "a solution in search of a problem." He said that the Internet is already "free and open," and questioned whether the new effort will "end any differently from the last."
Meanwhile, FCC Chairman Tom Wheeler wrote that he intends to see the process move forward and also not-so-subtly dangled the prospect of reclassifying ISPs as so-called common carriers, which would take the issue away from the courts and give the FCC more authority to regulate traffic.