On February 26, 2015, the U.S. Federal Communications Commission (FCC) issued its latest attempt to secure an open Internet by establishing net neutrality rules. The latest Order, whose full text will be released to the public after the Commission vote, reclassifies Internet Service Providers (ISPs) such as Comcast, Verizon, Earthlink, and ACD Net as telecommunications service providers (common carriers). Under these rules, ISPs will be subjected to non-discrimination obligations and may not offer paid prioritization to content providers. Common carrier services, addressed in Title II of U.S. communications law, are potentially subject to detailed regulation, although the FCC elected to forbear from the vast majority of rules that had historically applied to public utilities, promising that no price regulation, universal service fees, and taxes would be imposed.
Title II obliges service providers to provide their services on a non-discriminatory basis to all who have a reasonable request. This is the legal framework under which fixed and mobile telephone companies and their broadband services operated until 2005, when they were reclassified as nearly unregulated information services. Cable companies were never subject to such non-discrimination obligations. Non-discriminatory access and an obligation to serve everybody are key tenets of everybody interested in an open Internet, a debate that had been unfolding over the past decade under the heading of “net neutrality”.
There is unanimous agreement that an open Internet is desirable but there are wide differences as to how it could be safeguarded and particularly concern among stakeholders about the chosen approach. Interestingly, the positions of business and users are divided within these groups. Wireline ISPs are vehemently opposed to the new rules, several mobile service providers (including T-Mobile and Sprint) have signaled that they are indifferent, and many high-tech players such as Google as well as numerous high-tech entrepreneurs support such regulatory intervention. Many players in the business community and some cyber libertarians believe that ISPs voluntarily will keep the Internet open and that today’s rules are a historical step backwards, subjecting the Internet to unprecedented and undesirable government intervention.
So what are the strengths and weaknesses of the proposed approach? The biggest advantage of the chosen approach is that is puts FCC authority on a solid legal footing. The other alternative, creating the ability to monitor and safeguard an open Internet within the information services framework is more difficult to construct legally and two prior attempts were overturned by the appeals courts. In that sense, the FCC chose a robust framework. The biggest risk is regulatory creep. Even though the agency promises to apply only light-handed regulation, there is a high risk that stakeholders will gradually (ab)use the regulatory process to tweak Internet policy in their own favor, leading to gradual regulatory expansion that would undermine the dynamic Internet. The most effective, yet most elusive way forward would have been for Congress to endow the FCC with solid legal foundations to safeguard an open Internet. In that sense, the FCC chose a feasible, but third-best solution to support a desirable policy goal.
It remains to be seen whether any of the dire forecasts and enthusiastic predictions will materialize. It is unlikely that the new Order will improve access speeds, increase investment, and accelerate the rollout of Internet access to rural and unserved users as supporters of the Order claim. It is also unlikely that the fears project by opponents, including higher broadband prices, slower access speeds, lower investment, higher broadband taxes, and slower innovation will result. The Order seems to have a beneficial effect in that it will safeguard free speech and access for small entrepreneurs to the web. Most likely, the Internet as a dynamic place and the many players participating in it will adapt to these rules and muddle through on a going-forward basis.
What is needed, and seems to be absent from the Order, is a systematic monitoring of the effects of the Order as it is implemented so that these conflicting claims can be evaluated and, if necessary, mitigating policies can be adopted. Faculty in the Department of Media and Information has a long tradition of generating relevant research. Several of our researchers have studied the issue of net neutrality. Johannes M. Bauer and Jonathan A. Obar published a paper in The Information Society that clearly identified the benefits of an open Internet, the potential risks if all safeguards are eliminated, but it also warned from a simplistic approach that would favor one set of goals over others. The present model is a far cry from such a nuanced approach.
In this tradition of relevant research, the Quello Center for Media and Information Policy under the leadership of its Director William H. Dutton, is launching a Network Neutrality Impact Study, bringing in a network of MSU researchers from the College of Communication Arts and Sciences (Johannes M. Bauer, Steven S. Wildman), Social Sciences (Jay Pil Choi), and Law (Adam Candeub). The goal is to provide a non-partisan, unbiased assessment of the short-, medium- and long-term implications of this far-reaching Order to inform practitioners in business, government, and the public at large. Our hope is to contribute to preserving the openness, free speech, and the dynamics of the Internet.
Johannes M. Bauer
Professor and Chairperson