Net Neutrality and FCC Politics

To date, what little authority exists behind net neutrality has been held by the Federal Communications Commission (FCC). However, the FCC is a political creature, and net neutrality is tangled up in its politics.

Right now, the FCC is evenly divided between Democrat and Republican commissioners. By political necessity, companies needing FCC approval for mergers must negotiate with both sides of the FCC, and net neutrality has been at issue. Last year, approval of the SBC - AT&T and Verizon - MCI mergers included a requirement that net neutrality remained in place ... for two years. Why only 2 years? Verizon lobbied aggressively to ensure that net neutrality would sunset after 30 months.

Now we start to understand why this year telco/cable CEOs began signaling their intent to eliminate net neutrality and begin discriminating among content, delivery and pricing in Internet services. Next year they will be free of their net neutrality "chains."

Other than adding limited net neutrality conditions to merger approvals, the only other FCC "authority" behind net neutrality is a set of non-binding principles. Hardly comforting since FCC Chairman, Keven Martin, disfavors regulating the issue.

That cold comfort gets downright frigid when you consider industry statements. While certain cable/telco CEOs pledge not to block or degrade content, other telco representatives argue that those sunset provisions were only meant to address "anomalies" arising during the merger. Translation: net neutrality has been an anomoly that will be "corrected" shortly.

So where does that leave net neutrality at the FCC?

Many suggest letting the FCC deal with the issue on a case-by-case (merger-by-merger?) basis. But the FCC has thrown net neutrality only a 2-year life line. And time is running out, as the telco/cable companies intended.

The blatent weakness of current net neutrality guarantees is now recognized in Congress. Witness the bi-partisan bills on net neutrality in the House and the Senate. Apparently, it is also dawning on some at the FCC that net neutrality is a serious issue of fair competition. Yesterday, FCC Commissioner Michael Copps pubicly stated that the FCC should issue enforceable regulations guaranteeing net neutrality. Copps called net neutrality rules "essential." Former FCC Chairman, Reed Hundt, agrees.

Net neutrality looks like an antitrust issue. Is bundling content with Internet service delivery (when content providers cut exclusivity deals with Internet service providers) so different from Microsoft bundling its browser with its Office Suite?

Both effectively squash competition. For the Internet, other content will still be delivered, but much slower. In the Microsoft case, other browsers could still be used (maybe), but they would not work as well or as fast.

Tomorrow, the House Judiciary Committee will vote on a bi-partisan bill that would punish net neutrality violations under federal antitrust laws. We shall see how far net neutrality has come since the last Congressional committee vote on the subject.