This week, for the first time ever, the Federal Communications Commission voted to approve regulation of internet traffic. These new 'net neutrality' rules have left both sides of the political spectrum upset — the left is saying the rules haven’t gone far enough to protect consumers, while the right is calling it unnecessary regulation. The Wall Street Journal'sAmy Schatz explains why the only ones who seem satisfied with the new regulations are the internet service providers being regulated.
BOB GARFIELD: From WNYC in New York, this is On the Media. Brooke Gladstone is off this week preparing a show about video games for next week, which will blow your mind. I'm Bob Garfield, and all I've got is net neutrality.
FEMALE CORRESPONDENT: The Federal Communications approved the first regulations covering high speed internet access in a vote today.
MALE CORRESPONDENT: The Federal Communications Commission today approved a controversial new policy it says will provide all users equal access to the Internet.
MALE CORRESPONDENT: Republican lawmakers vowing to fight what they are calling a job-killer today.
BOB GARFIELD: In an effort to keep access to the Internet equally open to all comers, without stifling economic opportunity and innovation, the Federal Communications Commission issued a rule this week mandating more transparency from internet service providers and limiting their ability to give preferential treatment to the biggest players, at least on wired connections. But the rule was immediately lambasted by critics on the left, who say the regulation is too weak, and also by critics on the right, who believe the government’s intervention is heavy handed and burdensome to the private sector. Reporter Amy Schatz, who covers the FCC for the Wall Street Journal, has broken down the stakes of the debate, which she believes is far from over.
AMY SCHATZ: So the idea of net neutrality is that all legal internet traffic should be able to be accessed by consumers without anybody getting in the way and blocking or slowing what you look at.
BOB GARFIELD: So give me an example of what internet service providers could do that would be deemed not neutral.
AMY SCHATZ: A couple of years ago, Comcast Corp actually was deliberately slowing some of its subscribers traffic because there were some subscribers who were downloading a lot of video files off the filesharing networks, and Comcast found that it was slowing down other users’ traffic. And so, they didn't tell anybody, but they basically slowed some users’ traffic down. And when people found out about it, they got really upset because Comcast had never told them they were going to do that. That was an example where the FCC actually tried to step in and stop that sort of thing, and they didn't have a lot of luck, although Comcast eventually stopped doing it anyway.
BOB GARFIELD: Yeah, we'll get back to the why they didn't have a lot of luck, in a moment. So, one of the new rules mandates that companies who do throttle users, that is, speed up and slow down traffic for traffic management purposes, be transparent about it. How does that work?
AMY SCHATZ: Internet companies are actually going to have to tell you what kind of internet speed you’re getting, because right now they'll, they'll tell you the advertised speed, and that could be slightly to greatly different [LAUGHS] than what you’re getting at home. And another thing they're going to have to do is actually tell you if there are any usage caps. So if you’re getting close to the amounts that you’re supposed to be using every month, they're going to have to tell you, and they're going to have to tell you what those, those limits are. And, and right now, most consumers have no idea how much they're using every month or if there even is a cap.
BOB GARFIELD: What about the notion of charging consumers more for a faster internet than for a slower one?
AMY SCHATZ: It’s never really been about how much they could charge consumers on this. It’s really about if they could charge other companies to deliver services faster to subscribers. So if, let's say, Netflix wanted to make sure that it could get its services to you, a Comcast subscriber, Netflix right now couldn't really pay extra to make sure that they got their services to your faster. But in the future, under these new rules, they might be able to.
BOB GARFIELD: And that’s one of the great fears, the idea that deep-pocketed large companies will be able to afford the HOV lanes, you know, the toll lanes, and the vast majority of others on the internet will have to settle for the heavy traffic.
AMY SCHATZ: That’s exactly what folks have been worrying for years about this, because they don't want to create a sort of have-and-have-not system on the internet. You know, the FCC is saying today that they don't necessarily want to see that as a future for the internet, but these rules certainly open the door to that.
BOB GARFIELD: It particularly opens the door to that on mobile devices, your smartphone and your iPad. Why has the FCC opened the opportunity for wireless providers to be more aggressive in traffic management than the ISPs who are giving us our home broadband services, for example?
AMY SCHATZ: Wireless providers have been arguing that their networks are simply different than the network that you get in your house through a cord because there’s less airways out there for them to use, and they have a lot more congestion on their networks than you might have on your connection coming through Comcast or some other cable provider. So they successfully lobbied the FCC and said, look, you know, we don't have as much space and we have to do a lot more aggressive management of all the data that’s going across our network because we want to make sure people can still get phone calls and we need to manage a much more scarce resource than people who are offering wired broadband. So the rules that were approved Tuesday by the FCC basically set different standards for wireless broadband than it does for wireline. You can't block an internet site but you could certainly block some sort of software application on a wireless network in a way that you couldn't do on a wireline.
BOB GARFIELD: So this rulemaking was passed three to two. The three Democrats voted yea, the two Republicans voted nay. The Republicans complained that by imposing regulation it’s going to restrict companies from, from achieving the glories of the marketplace and, and it will suppress entrepreneurism, and so forth. The Democrats fear that too much leverage has been given to these gigantic internet service providers. And yet, the telcos themselves - AT&T, Verizon, Comcast - they aren't griping much. If they're happy, I think I should be nervous. Why are they happy? Should I be nervous?
AMY SCHATZ: They're happy ‘cause they thought it could be a heck of a lot worse. They're not, you know, jumpin’ up and down and opening champagne corks or anything, but they're, they're not unhappy because basically one, one of the things they really wanted was to make sure that the rules that applied to wireless were different and less stringent than the rules that applied to your home wireline broadband connection. And they got that.
BOB GARFIELD: You mentioned that the FCC’s attempt to slap down Comcast a couple of years ago wound up failing because there’s a question as to whether the Federal Communications Commission really has the rulemaking authority required to make all of this stuff stick. Can the FCC at long last regulate the internet?
AMY SCHATZ: Congress has never given the FCC authority to play internet traffic cop, so what they've been trying to do is take these rules that were written a long time ago for your old phone network, then sort of cobble them together and come up with some way to apply them to these new networks. You know, it hasn't worked out super well for them in the past, and, and they're, they're going to take another shot at it.
BOB GARFIELD: Because the courts ruled against them in the Comcast case; they said they lack the authority.
AMY SCHATZ: That’s – exactly. They said, good try but no luck, so they're going to try again.
BOB GARFIELD: One way or another, this is apt to be settled in the courts?
AMY SCHATZ: Most likely.
BOB GARFIELD: All right, Amy, thank you very much.
AMY SCHATZ: Thanks for having me on.
BOB GARFIELD: Amy Schatz covers the FCC for the Wall Street Journal.
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