This past week, the FCC announced that broadband Internet will be regulated like a utility. For most of us, this will be a non-event – Internet will continue to work the way it’s always worked.
The main reason the FCC made this ruling was to enforce the notion of “net neutrality.” Supporters of net neutrality (including Google, Amazon, Facebook, Yahoo and Microsoft) say all Internet traffic should continue to be treated equal, regardless of content. However, broadband providers like Comcast, Verizon and AT&T, want the flexibility to charge businesses extra to have their content delivered faster. The FCC ruling now prohibits this.
Imagine that the Internet is a freeway. Broadband providers get businesses and consumers to pay for onramps to this freeway. That is your Internet broadband connection. Broadband providers argue that if most of the traffic on that freeway is going to one business, shouldn’t that business pay extra not just for a bigger onramp to the Internet, but for faster, dedicated lanes on the freeway?
Supporters of net neutrality, and now the FCC, say if they allowed broadband providers to create these dedicated, faster lanes on the Internet, only larger corporations would be able to afford them. This would give those corporations an unfair competitive advantage. Even more, broadband providers could create exclusivity contracts which would give one business or organization the only dedicated fast lane for a particular type of business or speech. This would create winners and losers based solely on how much an organization could pay.
Another reason the FCC ruled that broadband Internet is a utility is to give alternative broadband providers the opportunity to compete for business.
In many US markets, you have just one or two choices for wired broadband service – the telephone company or the cable TV company. These companies have enjoyed near monopolies providing Internet service because they own the right to deliver service using public easements and telephone poles. With this ruling, services like Google Fiber, now have easier access to those same public easements and telephone poles. By opening the market to additional broadband providers, consumers and businesses will have more choices for access to the Internet and competition should lower costs.
There are concerns about the FCC ruling which trouble some people. Some believe the ruling could result in additional taxes and fees on their broadband bills. Many experts believe state and local governments might have the right to add a fee to your bill, but others say existing laws prohibit this practice. It would be up to Congress to make sure the law is clear about the potential this ruling has on additional fees on your broadband Internet bill.
Broadband providers, fearing additional regulatory requirements and oversight, are now threatening that they will stop creating additional Internet capacity, but that prospect remains to be seen. Its all but certain that the national broadband providers will file suit against the FCC in an attempt to overturn this ruling.
For consumers and small businesses, this ruling is very positive. It keeps the playing field level for everyone. It keeps the Internet as an open platform where all voices are equal. And it will give consumers and businesses additional choices for broadband service.