Lobbying intensifies as net neutrality faces threat

Consumer groups accuse the Internet controlling body of betraying its promises.

In the nine weeks since the Federal Communications Commission said it would try, for a third time, to write new rules to secure an open Internet, at least 69 companies, interest groups and trade associations — over one a day — have met with or otherwise lobbied commission officials on what the rules should specify. That effort does not count the more than 10,000 comments that individuals have submitted to the FCC.

Now the flood of lobbying efforts is likely to increase after the disclosure on Wednesday evening that the FCC would soon release preliminary rules allowing for the creation of special, faster lanes for online content to flow to consumers — for content providers willing to pay for it.

The proposed rules, drafted by Tom Wheeler, the chairman of the Federal Communications Commission, and his staff, would allow Internet service providers to charge companies different rates for faster connection speeds. The FCC had previously warned against those types of deals, saying they could unfairly discriminate against companies that could not or were not willing to pay. But after a federal appeals court struck down, for a second time, the commission’s earlier regulations, the FCC is trying again.

Reaction was swift to the proposed new rules, as consumer groups accused the commission of betraying its promise to maintain net neutrality, or equal treatment for both providers to and users of the Internet. That prompted an immediate rebuttal from the FCC chairman, Tom Wheeler, who said late Wednesday that speculation that the commission was “gutting the open Internet rule” was “flat out wrong.”The jockeying continued on Thursday. Verizon, which brought the court challenge that prompted the last set of open Internet rules to be struck down in January, issued a statement warning against “unnecessary and harmful” new rules. Consumer advocates reiterated their opposition.

Wheeler stepped up his defence of the commission’s plans. “The proposal would establish that behaviour harmful to consumers or competition by limiting the openness of the Internet will not be permitted,” he wrote in a post on the FCC’s blog.The sparring will be closely watched by every company that depends, even peripherally, on the Internet — which is to say, just about every company.

Businesses that use Internet connections to provide consumer services — obvious ones like Google and Netflix but also home alarm system providers, medical equipment companies and even makers of washers and dryers — will thrive or fail based on how much it costs them to maintain easy online contact with households and businesses.

As such, the lobbying ahead of the release of the proposed new rules on May 15 is certain to be intense. As recently as Tuesday, officials from the National Cable and Telecommunications Association, which represents cable and broadband companies and is led by Michael K Powell, a former FCC chairman, met with commission staff members to discuss the pending proposals.

Determining acceptable practices

For Internet service providers, video distributors, movie studios and even medical companies, lobbying efforts will centre on what it means for a broadband provider to favour some content over another in a “commercially reasonable” way — the standard that the FCC says will determine whether a practice is acceptable. The FCC says its proposal will show that it is trying to accomplish most, if not all, of the same goals that it pursued in its 2010 Open Internet Order, which the appeals court struck down.

“The court of appeals made it clear that the FCC could stop harmful conduct if it were found to not be ‘commercially reasonable,’ ” Wheeler wrote in his post. The commission “will propose rules that establish a high bar for what is ‘commercially reasonable,’ ” he said. In addition, he wrote, the commission “believes it has the authority under Supreme Court precedent to identify behaviour that is flatly illegal.”For years, many advocates of a free Internet have said that information should never have to pay a toll to ride on the web. But as traffic and competition has increased, much of it from big video providers like Netflix, the Internet has been becoming more congested and regulators have struggled to catch up with new digital realities.

If the FCC fails in this attempt to devise rules that withstand judicial scrutiny, it might have no choice but to try to reclassify broadband for stricter utility-like regulation, which would likely result in another trip to court.

With no more than vague guidance, many interested companies were reluctant to comment. But Verizon said in a statement that it was “publicly committed to ensuring that customers can access the Internet content they want, when they want and how they want.” However, it added, “Given the tremendous innovation and investment taking place in broadband Internet markets, the FCC should be very cautious about adopting proscriptive rules that could be unnecessary and harmful.”

That position was also put forth by two Republican lawmakers, Fred Upton of Michigan, the chairman of the House Energy and Commerce Committee, and Greg Walden of Oregon, the chairman of the House Communications and Technology Subcommittee.

In a joint statement, they said, in part: “We have said repeatedly that the Obama administration’s net neutrality rules are a solution in search of a problem. The marketplace has thrived and will continue to serve customers and invest billions annually to meet Americans’ broadband needs without these rules. Chairman Wheeler’s approach to regulation seeks to freeze current market practices, which will cast a chill on technological breakthroughs and cause American consumers to lose out.”

But plenty of groups supporting a strict interpretation of net neutrality criticized the FCC’s plans. Michael J Copps, a former FCC commissioner who is working with the nonprofit advocacy group Common Cause to keep net-neutrality safeguards in place, said big telecommunications and entertainment companies had spent millions to lobby for rules that would allow them to tilt the scales in their favour. 

The FCC’s plan “is a lot closer to what they wanted than what we wanted,” Copps said in a phone interview. “It reflects a lot more input from them.” Based on what the FCC has revealed so far, he said, the commission appears to be going beyond what the appeals court laid out.