Tuesday, March 3, 2015

Net Neutrality: A Good First Step

The Federal Communications Commission's recent ruling to reclassify broadband as a public utility under Title II of the Telecommunications Act, is a step in the right direction, but probably will not break the stranglehold that the major ISP's have over our entire nation.

The FCC's new ruling prevents an ISP from offering 'paid prioritization', i.e. slow and fast lanes, depending on how much the content provider pays the ISP. Before Netflix gave in to the bullying tactics of Comcast, the largest ISP in America, streaming a Netflix movie was a pretty bad experience. This is a typical example of the consumer paying the price when network operators argue over money. Throttling and blocking are two other no-no's under the new rules and for the first time, open Internet rules will be fully applicable to mobile devices. In other words, the FCC now can regulate some aspects of how major ISP's conduct their business.

But one of the most important causes of the deterioration of broadband access in America, is the lack of competition. FCC chairman Tom Wheeler did not seem to have the stomach to confront that issue.

Years ago, the situation in England was pretty much the same as it is here: the telephone company (British Telecom) and one cable provider were the only two broadband choices. Then, the government's top broadband regulator, Peter Black, told BT to open its lines to other providers and soon, under pressure from competitors, prices dropped and speeds went up. This 'unbundling' is what we need here.

Lack of competition is the main reason why America ranks so low on an international scale. Not only do the major ISP's have the monopoly over most of the infrastructure, they have also been successful in preventing municipalities from building their own infrastructure in areas where the ISP's would be forced to compete.

Restrictive state laws were passed after successful lobbying by private providers, often with the backing of libertarian or taxpayer groups such as Americans for Prosperity. They argue that some municipal broadband systems have failed, and that taxpayers can be left on the hook when they do.

This is amazingly hypocritical, considering that Verizon, for instance, has actually requested a Title 2 classification, when it needed to spend money on building its infrastructure. Once this broadband infrastructure is laid down, partially paid for with taxpayer dollars, the company turns around and declares the services it offers over those lines, to be exempt from regulation. It uses the FCC classification interchangeably, depending on how it serves their bottom line.

But advocates of municipal cable compare providing broadband in rural America to the need to bring electricity there in the last century. Communities that weren’t served by private electric utilities had to form municipal utilities or rural electric cooperatives. Rural or urban, competition is essential.

The new FCC ruling overturns state laws that protect ISPs, but building new infrastructure takes a long time. The commission's reluctance to tell ISP's to share their network, is not good news for the consumer.

ISPs are probably the purest example of a natural monopoly we have in our modern society. That they were even allowed to escape regulation is shameful. So, yes the new FCC ruling, reclassifying broadband as a public utility is definitely a step in the right direction, but it does nothing to promote competition. leave comment here

Further reading: Net neutrality is all good and fine; the real problem is elsewhere