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FCC to study net neutrality regulation

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FCC to study net neutrality regulation

The Federal Communications Commission will conduct an inquiry into broadband market practices that will hopefully lead to a more fact-specific discussion around net neutrality regulation. Commissioner Michael J. Copps complained that “we proceed too leisurely here,” warning that broadband providers can build networks with “traffic management policies that could restrict how we use the Internet.”

Don’t take my word for it. It was the Wall Street Journal that said large carriers “are starting to make it harder for consumers to use the Internet for phone calls or swapping video files.”

Copps didn’t mention that the same article highlighted the burden that a small number of users impose on the network and that it’s unfair to the ordinary users.

In August alone, one cable broadband subscriber consumed a total of 1.5 terabytes, the equivalent of 1,500 standard-definition movies, according to CableLabs, the cable industry’s research and development arm. Fewer than 10% of the subscribers of Time Warner Inc.’s cable unit consume more than 75% of its bandwidth, says Mike Lajoie, chief technology officer of Time Warner Cable. “It can be frustrating for people using email or sending pictures to their moms,” he says. “It tends to slow down the rest of the network.”

The inquiry will examine whether broadband providers “charge different prices for different speeds or capacities of service” and whether the FCC’s own policies should “distinguish between content providers that charge end users for access to content and those that do not.” Shifting part of the focus onto the business practices of content providers who are financing the campaign for net neutrality regulation is an unfortunate new twist, since two wrongs don’t make a right.
Also, interested parties will be able to comment on whether the FCC should adopt a policy principle of nondiscrimination and, if so, what it should look like. For example, is it okay if Comcast and Google share advertising revenue?

Google has shared advertising revenue from searches generated on Comcast.net, with Comcast’s cut expected to be about $70 million this year, people familiar with the matter say. But Comcast feels that its share should be at least $100 million, these people say. Comcast.net, which gets about 15 million visitors a month, is one of the biggest non-Google sources of search queries handled by Google.

The full story is here. Under a pure nondiscrimination requirement, Google wouldn’t automatically get to provide the search results every time a user of the Comcast.net portal enters a query into the default search box on the site. It would be discriminatory if Comcast provided preferential placement or access to any particular content. Google may not mind paying Comcast $70 million or even $100 million, but what if the cable operator wants $1 billion? After all, Google agreed to pay Dell $1 billion over 3 years to preinstall its software on up to 100 million Dell PCs, and it agreed to pay MySpace.com a minimum of $900 million in ad revenue over 3 years in exchange for a Google search box appearing on every MySpace page. It would be hard to draft a nondiscrimination requirement to permit the former but restrict the latter.