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FCC’s Net Neutrality Proposal Sparks Sharp Reactions

7 May, 2014 By: Doug McPherson

WASHINGTON – Federal Communications Commission (FCC) Chairman Tom Wheeler’s proposal to let Internet service providers charge higher rates for services that use more resources has sparked new debate over net neutrality.

Net neutrality rules require ISPs to not limit subscribers’ access to any service and treat all content indiscriminately. But some ISPs have argued that a handful of services, such as YouTube, Netflix, Amazon and ESPN account for much of the Internet traffic and should be charged for their high use of resources.

Under the new rules, the FCC would not prohibit ISPs’ charging extra to companies like Netflix, but it would retain the right to judge whether those deals are “commercially reasonable.”

The New York Times opposed the new proposal, writing in an editorial: “It would essentially give broadband companies the right to create the digital equivalent of high-occupancy vehicle lanes for content providers, like Netflix and Amazon, wealthy enough to pay a toll.”

The Daily Beast has echoed this argument: that new start-ups that involve streaming video may not be able to afford the high-tier payments, limiting future entrepreneurial activity.

Proponents of net neutrality say fees charged by ISPs such as Comcast or Time Warner Cable to companies like Netflix will be passed along to consumers via rate hikes. While consumers may not see the change in their monthly ISP bill, they will see it in their Netflix (or other streaming service) bill.

Netflix has announced it will be gradually raising prices on its streaming services from $1 to $2, with a grandfathering of current customers for as much as a year. This decision to raise prices came a few weeks after Netflix signed an agreement to pay fees to broadband provider Comcast. Asked whether the fees played a role in the price-hikes, a Netflix spokesperson told the Washington Post, “Content delivery costs are part of the costs we have to pay.”

The Wall Street Journal reports Google, Netflix and Yahoo “are considering mobilizing a grass-roots campaign to rally public opinion around the idea that the Internet’s pipes should be equally open for all.”

Sen. Al Franken (D-MN) said he is “deeply disappointed” that Wheeler is endorsing online “fast lanes” for companies willing to pay extra fees to Internet service providers.

“Pay-to-play arrangements are inherently discriminatory and anticompetitive, and therefore should be prohibited as a matter of public policy,” Franken wrote in a letter to Wheeler. “They increase costs for consumers and give ISPs a disincentive to improve their broadband networks.”

Franken added he would like to see the FCC aim to “sustain competition and consumer benefits” instead of creating new “unnecessary tolls for businesses and consumers.”

“The Internet was developed at taxpayers’ expense to benefit the public interest. It belongs to all of us,” he writes.

But Wheeler continues to insist his proposal won’t destroy open Internet principles.

“Reports that we are gutting the open Internet rules are incorrect,” he said at a speech at the National Cable and Telecommunications Association (NCTA) event in Los Angeles. “I am here to say wait a minute. Put away the party hats. The open Internet rules will be tough, enforceable and, with the concurrence of my colleagues, in place with dispatch.”

Wheeler added he doesn’t “intend to allow innovation to be strangled by the manipulation of the most important network of our time, the Internet.”

He also dismissed the idea that allowing “fast lanes” could harm companies that don’t strike deals for prioritized delivery. “Any new rule will assure an open pathway that is sufficiently robust to enable consumers to access the content, services and applications they demand and innovators and edge providers the ability to offer new products and services,” Wheeler said.

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