These 3 Net Neutrality Rules Will Change American Broadband

New Post Public Reply Private Reply Replies (1) Message Board
chessmite
These 3 Net Neutrality Rules Will Change American Broadband Forever

By Anders Bylund
March 17, 2015



Cable Confusion by Eric, on Flickr.

The Federal Communications Commission recently voted through a new set of rules to regulate broadband Internet services. Two weeks later, the FCC published the full decision, and it's a doozy.

Eight pages of actual rules are joined by 312 pages of clarifications and background, plus another 87 pages of statements from the five FCC commissioners involved in this 3-2 vote. Eighty of these final pages consist of dissenting opinions from Republican commissioners Michael O'Reilly and Ajit Pai.

You can read the entire 400-page tome, if you're looking for some light bedside reading. Start on page 283, where the actual rules are laid out under the label of Appendix A.

Or you can sit back and let me summarize the three most important rules coming down the pipe. Here we go:

No blocking, no throttling, no paid fast lanes
I'm bundling these three essential rules together as one, because they essentially address the same issue of unfair broadband service practices. This is actually the bread and butter of the entire order, since everything else just explains how the FCC plans to manage and enforce these provisions.

When these rules take effect, broadband service providers will not be allowed to:
•"Block lawful content, applications, services, or non-harmful devices,"
•"impair or degrade lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device," or
•"engage in paid prioritization."

That's it. I'm not kidding.

These rules are all subject to one important caveat, allowing service providers to apply "reasonable network management" practices. You can expect cable and telecom companies to use this fuzzy clause whenever they want to dodge the actual rules. Other than that, the rulebook is both compact and clear as day.

These orders will ensure that American broadband subscribers get what they pay for. They safeguard full access to the global Internet, tell the ISP to keep their data pipes flowing, and stop them from setting up faster connections across the Internet backbone in return for premium payments.

That last bit is exactly what Netflix (NASDAQ: NFLX ) was asking for last year, when broadband titans Comcast (NASDAQ: CMCSA ) , Verizon (NYSE: VZ ) , and AT&T (NYSE: T ) all started throttling the digital video titan's access lines.

These bottlenecks weren't set up in the direct connection between the consumer and the service provider, but deep in the bowels of their nationwide networks. And they all went away when Netflix agreed to pay more for a higher-quality connection on the back end.


Source: Wikimedia Commons.

So the FCC is forcing the service providers' hands to provide better service without charging extortion-like fees for that privilege. This won't be good for Comcast's or Verizon's profit margins, which explains why the ISPs hate this FCC order with a passion.

Businesses that depend on low-cost access to an open network structure, on the other hand, may see their network costs dropping. More importantly, they absolutely should see network quality improving. Netflix, for one, applauds the order for setting up a workable policy for the Internet backbone.

But even Netflix isn't entirely pleased, and here's why.

Title II
You see, the commission took this opportunity to classify broadband services as "telecommunications services," falling under Title II of the Communications Act of 1934.

The FCC took this route to establish its authority to set networking rules at all. Critics argue that Title II will lead to oppressive regulation, heavy fees, and the end of broadband innovation as we know it. The CFOs of AT&T and Verizon said as much in their appearances at industry conferences last week.

"It's going to be more difficult to invest; it's going to be more difficult to innovate and deliver speedy solutions to the consumer because now you're going to have to navigate what is regulated, what isn't regulated, and all this other stuff," said Verizon CFO Fran Shammo at a Morgan Stanley confab. "You could probably take an assumption that there is going to be a lot of litigation around this when it's all said and done."

Interestingly, the FCC was largely forced to use the Title II option because of a legal win by Verizon in 2002. Back then, Verizon wanted favorable construction terms for its then-nascent fiber-optic network rollouts. Moreover, a "common carrier" under Title II may be heavily regulated, but it also gets to set high subscription fees -- particularly when the customer is a government entity. The cable industry was the enemy in 2002, and Verizon got its way -- fiber-based phone networks were shunted into the Title II category while the cable guys became a less cushy Title I "information service."

This time, the cable and telecom giants are allies and they have already built their high-speed backbone networks. So they'd much rather have less government control, even if it means fewer infrastructure construction incentives. Hence, times have changed. Title II is now their common enemy.

Verizon and friends want to have their cake and eat it, too. Their wireless networks already run under Title II rules, albeit with plenty of so-called forbearance exceptions that limit federal fees on your favorite smartphone operator's networks. But the fiber that connects those wireless towers to the rest of the Internet, well, that's all part of the hands-off Title I environment that just became another Title II item.

As for Netflix, the company appreciates the new rules but didn't exactly love the Title II move. Speaking at the same Morgan Stanley conference as cited above, Netflix CFO David Wells explained why:

"Were we pleased that it pushed to Title II, probably not, right?" Wells said. "I mean, we were hoping that there might be a non-regulated solution to it. But it seems like companies that are pursuing their commercial interests, including us, have to arrive at something like that."

So it's a compromise. Title II gets the job done, and in a sense, maybe it is the right idea:

"You know when you're as successful as the ISPs are at providing a service, essentially Internet has become a utility," Wells said. And in that case, utility-style regulations do seem to make sense.



More transparent billing
Finally, you should know that the new rules will force service providers to step up their billing practices.

The agency cited consumer complaints "that the speed of their service falls short of advertised speeds, that billed amounts are greater than advertised rates, and that consumers are unable to determine the source of slow or congested service." Moreover, ISPs often slow down or terminate user connections based on "excessive use," often to the surprise of the affected customer.

The FCC noted that service providers already do disclose plenty of information, but the old rules had lots of leeway for sweeping important details under the rug. So the new rulebook will force user bills and marketing materials to include the following information:
•Full monthly service charges, including the terms of promotional rates;
•All additional fees and surcharges, including modem rental, early termination fees, and taxes;
•Data caps with trigger conditions and additional fee structures; and
•Performance characteristics of the network service, including speed, latency, and packet loss statistics.

These details are sometimes hard to find on today's Internet service bills, and even tougher to spot in advertising banners. The new rules should help consumers make informed choices on which broadband service to use, and protect them from predatory billing tricks.

On the back end, broadband providers must also report their network practices to the FCC for further review, which will help the agency determine if they step outside the "reasonable network management" umbrella.

The Motley Fool
http://www.fool.com/investing/general/2015/03...rican.aspx

Digital Uts Ventures (DUTV) Stock Research Links

DUTV Board Company Profile Buy Rating Time & Sales News Filings Financials
Scroll down for more posts ▼

Top 10 Most Recent News Articles

Top 5 Most Recently Viewed Articles

Snap Aims to Boost Advertising and Augmented Reality Growth

Updated Category News Views 91

Snap's Strategy to Revitalize Its Advertising Business Snap is working hard to improve and broaden its struggling advertising segment. CEO Evan Spiegel recently shared this goal with employees, emphasizing a strong focus on augmented reality. Challenges in the Advertising Landscape This announcement comes at a challenging time for the Snapchat creator, as it faces fierce...

Continue Reading
ResiBuilt Achieves Industry Recognition with IMN SFR Award Exceeding Expectations

Updated Category News Views 120

ResiBuilt Triumphs with IMN SFR Award Recognition ResiBuilt has achieved significant recognition in the build-to-rent (BTR) sector by winning the BTR/Land Deal of the Year award at the IMN SFR West Conference for the third time in four years. This honor reinforces ResiBuilt’s reputation as a leader in the BTR development arena, showcasing its commitment to excellence...

Continue Reading
Discover American Coastal Insurance Corporation's Upcoming Event

Updated Category News Views 86

American Coastal Insurance Corporation's Virtual Investor Day American Coastal Insurance Corporation (NASDAQ: ACIC) is gearing up for an exciting event. The company will host its 2024 Virtual Investor Day, an opportunity for investors and stakeholders to gain valuable insights, on December 4, 2024, at 11:00 a.m. Eastern Time. This event highlights the firm’s commitment...

Continue Reading
Flywire Investors Urged to Join Class Action Ahead of Deadline

Updated Category News Views 128

Flywire Investors Encouraged to Act Before Deadline In light of recent developments, investors in Flywire Corporation are strongly encouraged to take action before the crucial deadline for a pending class action lawsuit. The law firm Faruqilaw.com is actively reaching out to investors who may have suffered losses, particularly those who acquired shares during a specified...

Continue Reading
Zoomcar Launches 'ZoomPro' for Next-Level Fleet Management

Updated Category News Views 134

Zoomcar Launches 'ZoomPro' for Next-Level Fleet Management Zoomcar Holdings, Inc. (OTCQX: ZCAR), India's premier car-sharing marketplace, has recently debuted 'ZoomPro', an innovative B2B dashboard aimed at transforming the self-drive vehicle rental landscape. The introduction of this platform aligns with impressive company growth, evidenced by a 10% year-over-year...

Continue Reading