FCC faces new criticism on Internet neutrality

05/11/2014 12:00 AM

05/15/2014 6:40 AM

The government’s plan to let Internet providers charge Netflix, Google and others for faster access to customers has been thrown into turmoil, as the agency responsible for the rule has been riven by internal dissent and faces mounting opposition from the country’s most powerful tech companies.

Determining whether Internet providers such as Verizon should be forced to treat all Internet content equally, from an amateur photo-sharing site to a massive movie-streaming service, has bedeviled the government for years.

In the latest action on “net neutrality,” Tom Wheeler, the chairman of the Federal Communications Commission, last month proposed rules that would allow companies to pay providers to deliver their content at faster speeds.

That proposal drew an outcry by high-tech startups and consumer groups that fear that only the richest companies will be able to afford tolls extracted by Internet service providers. They say the higher costs would trickle down to customers and that the Web sites of nonprofit groups would be harder to find.

Over the past few days, Wheeler has faced a relentless stream of new protests, some from fellow Democrats.

FCC Commissioner Jessica Rosenworcel, a Democrat, called Wednesday for a one-month delay in voting on the proposal. She stopped short of saying she would vote against it, but said in a speech: “I have real concerns about FCC Chairman Wheeler’s proposal on network neutrality. ... His proposal has unleashed a torrent of public response. Tens of thousands of emails, hundreds of calls, commentary all across the Internet.”

Mignon Clyburn, another Democratic commissioner, said in a blog post that her mind was open, but noted that she has publicly expressed opposition to “pay-for-priority arrangements altogether.”

Last week, tech giants including Amazon.com, LinkedIn, Facebook and Netflix, as well as more than 100 smaller startups, called on the FCC to abandon the plan.

“The Commission intends to propose rules that would enable phone and cable Internet service providers to discriminate both technically and financially against Internet companies and to impose new tolls on them. ... This represents a grave threat to the Internet,” the companies wrote.

Wheeler vowed Thursday to forge ahead, according to a release from his office. He needs three votes on the five-member panel, which is expected to take up the issue on Thursday.

The chairman has said he would punish any Internet service provider that unfairly discriminates against traffic in a way that harms consumers. But such guidelines are too broad, subjective and hard to enforce, critics say. And given that Wheeler does not have the support of the two Republicans on the commission, some analysts doubted he could move forward.

“He was walking a very thin tightrope between the public-interest demand for an open Internet and Internet service providers’ willingness to only live with light-handed oversight,” said Gene Kimmelman, president of the nonprofit group Public Knowledge. “And the problem with walking a tightrope at 50 feet is that when you slip, you don’t just slip a foot, you fall flat to the ground.”

If Wheeler loses Thursday’s vote, the path to forging new net-neutrality rules would be uncertain. A previous version of the rules, which deterred Internet providers from selling faster download speeds to the highest corporate bidder, was struck down by a federal appeals court in January.

In some ways, Wheeler is facing a conundrum. No matter how the rules are crafted, they will likely generate fierce protests from either Silicon Valley or telecom giants such as Verizon and AT&T. The two industries are among the most powerful in the economy and the most influential in Washington.

“It’s a given that some important constituency will be unhappy no matter what the chairman does here. I think he’s got a game plan going in, but if he needs to make an adjustment to close the deal, he will. It’s the art of the possible,” said Paul Gallant, an analyst at Guggenheim Securities.

Another influential group chimed in as debate over the rules heated up last week.

Opposition to Wheeler’s plan intensified Thursday.

In a letter to the chairman, 50 venture-capital investors wrote that the net-neutrality plan would upend the entrepreneurial climate of Silicon Valley and ultimately harm consumers.

“If established companies are able to pay for better access speeds or lower latency, the Internet will no longer be a level playing field,” wrote the investors, who included Ron Conway, Brad Burnham of Union Ventures and Chris Dixon of Andreessen Horowitz. The investors have helped launched companies including Google, Twitter and PayPal.

More than 100 public-interest and community organizations sent their own letter of protest to Wheeler, saying the proposal puts free speech at risk and makes the voices of nonprofit organizations harder to be heard online.

“The result will be a two-tiered Internet: a fast lane for those willing or able to pay for it, and a dirt road for the rest of us,” they said.

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