Wednesday 13 December 2017

Net neutrality rules approved by US regulator

Members of the audience react after Federal Communications Commission (FCC) voting at Net Neutrality hearing in Washington REUTERS/Yuri Gripas
Members of the audience react after Federal Communications Commission (FCC) voting at Net Neutrality hearing in Washington REUTERS/Yuri Gripas

Press Association

Internet service providers must act in the "public interest" when providing a mobile connection to a US home or phone, under rules approved by a divided Federal Communications Commission (FCC).

The plan, which puts the internet in the same regulatory camp as the telephone and bans business practices that are "unjust or unreasonable", represents the biggest regulatory shake-up to the industry in almost two decades.

The goal is to prevent providers from slowing or blocking web traffic, or creating paid fast lanes on the internet, said FCC chairman Tom Wheeler.

The 3-2 vote was expected to trigger industry lawsuits that could take several years to resolve. But consumer advocates cheered the regulations as a victory for smaller internet-based companies which feared they would have to pay "tolls" to move their content.

Net neutrality is the idea that websites or videos load at about the same speed. That means you will not be more inclined to watch a particular show on Amazon Prime instead of on Netflix because Amazon has struck a deal with your service provider to load its data faster.

Opponents, including many congressional Republicans, said the FCC plan constitutes dangerous government overreach that would eventually drive up consumer costs and discourage industry investment.

Republican FCC commissioners Mike O'Rielly and Ajit Pai, who voted against the plan, alleged that President Barack Obama unfairly used his influence to push through the regulations, calling the plan a "half-baked, illogical, internally inconsistent and indefensible document".

Michael Powell, a former Republican FCC chairman who now runs the National Cable and Telecommunications Association, warned that consumers would almost immediately "bear the burden of new taxes and increased costs".

But it is not true that consumers would see new taxes right away. The Internet Tax Freedom Act bans taxes on internet access, although that bill expires in October. While Congress is expected to renew that legislation, it is conceivable that states could eventually push Congress for the ability to tax internet service now that it has been deemed a vital public utility.

For years, providers mostly agreed not to pick winners and losers among web traffic because they did not want to encourage regulators to step in and because they said consumers demanded it.

But that started to change around 2005, when YouTube came online and Netflix became increasingly popular. On-demand video became known as data hogs, and evidence began to surface that some providers were manipulating traffic without telling consumers.

By 2010, the FCC enacted open internet rules but the agency's legal approach was eventually struck down. FCC officials are hoping to erase the legal ambiguity by no longer classifying the internet as an "information service" but a "telecommunications service" subject to Title II of the 1934 Communications Act.

That would dramatically expand regulators' power over the industry by requiring providers to act in the public's interest and enabling the FCC to fine companies found to be employing "unreasonable" business practices.

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