There’s a saying you sometimes hear about firms in Washington, DC: “If you’re not at the table, you’re on the menu.”
In other words, unless you make yourself a part of the legislative process by lobbying and cajoling politicians, others will change the rules of the game and make you an object of the regulatory mess.
Unfortunately, technology companies may find themselves increasingly dragged into the regulatory fights they’ve long avoided. Until recently, the Internet was lightly regulated and most tech and gaming companies did not worry about the Federal Communications Commission, the national media and communications regulator created in 1934. However, in February 2015 the FCC decided to regulate many Internet service providers (ISPs) and tech companies through telephone regulations, called Title II. Confusingly, many Title II regulation advocates have branded these rules “net neutrality.”
What do title II Regulations Mean for the Internet?
With the Title II regulations imposed on ISPs and tech companies, the freewheeling days of experimentation with new broadband services have come to a close. Already, tech companies and network operators in the United States and abroad—including Facebook, MetroPCS, Netflix, Flipkart, Google, Wikipedia, and T-Mobile—have been intimidated by accusations of “neutrality violations.”
The regulators’ message to tech companies and broadband operators is loud and clear: “Slow down, and get our approval first.”
The convoluted re-branding of Title II is likely why many people believe that net neutrality means Internet providers must “treat all traffic equally.” It’s not clear, however, where this definition originated—and it’s been debunked many times. The FCC can’t—and won’t—hold ISPs and tech companies to that standard.
What’s wrong with net neutrality?
Internet traffic is treated differently based on customer demands and network capacity.
- Some ISPs, like PlusNet in the United Kingdom, are popular with gamers because PlusNet has broadband plans that give gaming priority over other Internet traffic during times of congestion.
- T-Mobile offers unlimited Netflix and YouTube streaming to customers if they accept lower-resolution video that shares scarce wireless network capacity better than high-definition streaming.
- Riot Games, the creator of League of Legends, created its own network and worked out individual deals with ISPs so that their users can have better gameplay.
- New broadband services like voice over Long Term Evolution (LTE) network technology require priority treatment to transmit quality voice calls.
As Fred Baker, former chair of the influential Internet Engineering Task Force, said, equal treatment of all Internet packets “would be setting the industry back 20 years.” Different types of Internet applications need different treatment by ISPs and tech companies to work well and to attract users.
Today, broadband Internet transmits a variety of services and applications, including the Web, gaming, telephone, home security, and television. Subscribers demand near-instantaneous transmission for real-time applications like Call of Duty and League of Legends. But other applications, like video-on-demand, email, and system updates, can work well with many milliseconds, or even seconds, of delay. Further, there are niche services on the horizon like video communication for the deaf that need special treatment or completely new business models to operate.
So, what should the FCC do?
So the FCC won’t force all Internet traffic to be treated the same. Rather, it wants to serve as the Internet Zoning Board and dictate which new broadband services are permitted. The FCC is a New Deal agency created to regulate the old Bell telephone monopoly and the broadcast radio industry. Title II rules for the Internet represent a welcome expansion of power for an agency that sees its influence rapidly shrinking. They also represent a solution in search of a problem. The lightly regulated Internet was rapidly churning out more services and applications for consumers, but the Title II regulatory process means companies need to focus more on compliance and less on network design and services.
If the FCC continues to regulate the Internet, technology and gaming companies may be fixtures at the agency—fixtures that are simply trying to stay off the Title II menu.
Unfortunately, the government often picks winners and losers in business—and that’s a huge problem for people who just want to see the best products out on the market. Learn more here.