Last month a court in the US ruled that the US Federal Communications Commission (FCC) has no authority to enforce so-called net neutrality, under which there is no discrimination between users of the Internet and how their traffic is treated.
Giant US telco Verizon had challenged the FCC’s right to impose rules that would prevent ISPs from giving priority to certain types of content, or content from particular users.
The FCC adopted the rules in 2010 after the practice of some ISPs of allowing certain classes of Internet traffic to travel through their networks more easily attracted significant adverse criticism.
The rules were intended to ensure no Internet content providers were being disadvantaged by ISPs giving priority to Internet traffic from users who were prepared to pay more. There were concerns that smaller content providers might be disadvantaged, and that users would find certain types of traffic throttled.
Many ISPs – Verizon foremost amongst then – said that some heavily used and high bandwidth sites, such as Netflix and YouTube, used too high a proportion of traffic, and that they should pay for it. The judges said that the FCC could not enforce net neutrality, as its mandate did not extend to such things, because it could not “impose requirements that contravene express statutory mandates.”
Verizon has wasted no time in moving to sell improved Internet access to those willing and able to pay for it. CEO Lowell McAdam gave a clear statement of the company’s intent at an address to Morgan Stanley’s media and telecommunications conference this week.
“People are realising that if you have an intelligent transportation system, or an intelligent healthcare system, you are going to need to prioritise traffic.
“You want to make sure that if somebody is going to have a heart attack, that gets to the head of the line, ahead of a grade schooler that is coming home to do their homework in the afternoon or watch TV.
“The big companies have a good understanding with Google. You saw the Netflix-Comcast deal a couple weeks ago, which is smart because it positions them farther out into the network, so they are not congesting the core of the Internet.
“And there is some compensation going back and forth, so they recognise those that use a lot of bandwidth should contribute to that.”
McAdam said he had spoken with Reed Hastings, head of Netflix, and that he believed he would come to “some sort of an arrangement” with the streaming giant.
The Comcast-Netflix deal McAdam was referring to was an agreement late last month in which the two companies said they had reached a “mutually beneficial” interconnection agreement.
“Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that's already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic.”
Comcast is a cable and Internet giant in the US, and owns the NBC network and Universal pictures. The fact that it has decided to facilitate Netflix’s streaming activities shows that it has come to terms with streaming technology, which it sees more as a way to get content to people rather than as a threat to its established cable TV operations.
Now Verizon looks like it might cut a similar deal with Netflix. That is good news for Netflix and its users, who now use more bandwidth than any other group of users on the Internet in the US.
But by prioritising certain types of traffic from paying clients over other types of traffic from users who are not paying a premium for guaranteed bandwidth, a basic principle of the Internet – that all users are treated equally – is being compromised.
We are now seeing the consequences of the recent court decision. Verizon and Comcast are openly flouting it, and the FCC is attempting to get new powers to enforce net neutrality. Soon after the ruling FCC Chairman Tom Wheeler issued a statement arguing both for net neutrality and for the Commission’s right to enforce it.
“The Commission will look for opportunities to enhance Internet access competition. When the earlier rules were adopted in 2010, some predicted that they would stifle investment and innovation. They were wrong. In fact, investment increased for both edge providers and in broadband networks.
“In particular, since 2009, nearly US$250 billion in private capital has been invested in US wired and wireless broadband networks. The FCC must stand strongly behind its responsibility to oversee the public interest standard and ensure that the Internet remains open and fair. The Internet is and must remain the greatest engine of free expression, innovation, economic growth, and opportunity the world has ever known.
“We must preserve and promote the Internet.”