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Consumer groups warn dismantling net neutrality could stymie startup innovation

April 24, 2014 at 6:34 PM EDT
The Federal Communications Commission is on the brink of changing the longstanding net neutrality principle, which allows consumers unfettered access to web content, and limits the ability of Internet service providers to block or filter material. New guidelines would allow some companies to charge more for faster service. Gwen Ifill talks to Cecilia Kang of The Washington Post about what’s at stake.


GWEN IFILL: The debate over how content should be delivered over the Web heated up again today with reports the government is about to change the rules that govern access to the services many of us now take for granted.

The government has long had rules that allow consumers to get unfettered access to content and limited the ability of Internet service providers to block or filter that material. But, as Web users increasingly rely on broadband services like streaming video, some companies are arguing it’s time for a change.

The new Federal Communications Commission rules could allow those companies to charge more for speedier service. Consumer groups say doing that would help the gatekeepers and suppress innovation.

Cecilia Kang of The Washington Post is here to help us understand the concept known as net neutrality and what’s at stake.

What do we know, if anything, about the details of what the FCC is actually going to propose, Cecilia?

CECILIA KANG, The Washington Post: What we do know is that the FCC has proposed new Internet rules that are supposed protect consumers as they use Internet more, as you say.

What they also have allowed is for Internet service providers, that means the cable companies, the telecom companies that provide you the high-speed Internet connections into your home, for those companies to actually charge Web sites like Facebook and Netflix and Google money to have actually the best speeds on the Internet.

That means that a Netflix video, for example, could operate and stream flawlessly without buffering, no slow streaming quality. But that’s because Netflix will be charged by those ISPs to be able to do that.

GWEN IFILL: How does that change the average Web user’s browsing or viewing, streaming experience if that happens?

CECILIA KANG: Well, what — it changes…

GWEN IFILL: They pay more? Does it improve what they get?

CECILIA KANG: It could actually mean higher costs. These costs that these Web sites incur could be passed down to consumers.

So, for example, if Netflix — let’s stay with that example — if they are charged for faster streaming, then they will try to pass on maybe a buck or two to the consumer at some point. It also just means that other companies, and other Web sites, sort of the emergence of all these new Web sites that we have grown to appreciate and love, they may not get discovered, because consumers might be so frustrated with the experience of trying to download a video from a new upstart that’s competing with these deep-pocketed firms like Netflix and YouTube that can afford to pay these ISPs these charges.

GWEN IFILL: To pay Comcast, to pay Time Warner, whoever else is providing the content.

CECILIA KANG: That’s right.

GWEN IFILL: If this were to happen, if this is what the details of this proposal finally emerge as, does this represent a reversal for the FCC?  Were they somewhere else before?

CECILIA KANG: You know, the FCC has always generally said, we are going to watch for discrimination.

And what they mean by that is, we’re going to watch for bad behavior. But what this does, what the FCC is proposing right now, what they have put down into words is the ability, sort of the go-ahead and the permission to say we will allow actually these deals between these telecom companies and these content companies on the Web. And that’s the first time you’re seeing that kind of language, as long as it’s commercially reasonable.

GWEN IFILL: OK. That is exactly where I was going. Commercially reasonable is completely open to interpretation, unless there are criteria to define what commercially reasonable is.

CECILIA KANG: That’s right, Gwen. It’s very vague, a lot of gray area on what will be commercially reasonable. And an FCC official today in a call with the press was really trying to explain and didn’t do a great job, in the sense that he really kept it very vague what they will interpret as commercial reasonable.

They will allow for the public to comment on what they think the guidelines for that should be. But, really, it really opens up the FCC to potentially more complaints and lawsuits even on what could be the standard for what is reasonable or not.

GWEN IFILL: So it is up to the FCC to determine the standard. And do they have any immediate enforcement power? Or does this — it sounds like it might take awhile even if they were to decide that someone was in violation.

CECILIA KANG: That’s right.

And that’s really difficult for, if you are a startup company, to have to go through that process to get — to actually file a complaint, which is expensive, or a consumer to file a complaint, again, which is expensive, and then to wait for the FCC to actually deliberate on a complaint and review it, and then actually have an actionable item from that.

That could take quite a long time and that could mean the difference between the death of a company or the survival of a company and a consumer’s experience.

GWEN IFILL: Give me an example. When you talk about a startup company that could be adversely affected by this, what are you talking about?


So, for example, say YouTube, which does have a lot of money, it’s hugely popular — they’re able to pay Verizon, for example, for the guarantee that all of the video clips there will never buffer, that these — that they always be delivered at the best quality.

Then another video upstart that might try to compete against YouTube won’t really stand a chance or potentially could have a very difficult time doing that. And if the FCC, if that upstart decides, that startup decides — sees that the behavior is anti-competitive and they think it is unfair, they could try to file a complaint to the FCC. But, again, it could be a long, arduous process that’s very expensive for a small company.

GWEN IFILL: You talk about expensive. And the money that these companies would be paying Internet service providers to get this kind of access. It also sounds like this one of — it’s a classic Washington lobbying money thing, and that there is a lot of activity going on just underneath the surface that maybe I wouldn’t see with the naked eye.


And what we have seen is that there is very much a desire by the Internet service providers, the cable companies, the telephone companies to pursue these new business deals, these new business models. And they have been lobbying behind the scenes. And they have actually said in court filings as well that they find — that this is the kind of thing that they would like to pursue as they see more consumers using the Internet for entertainment and communications, and often using services that compete with their traditional phone and cable services.

So they want to pursue these new business models because they want to find new sources of revenue.

GWEN IFILL: And the next thing that happens now down the road, are we expecting a different review that is going to take awhile before we actually see these criteria?

CECILIA KANG: Yes, the FCC hopes to have rules finalized by the end of the year.

But even already — this is a Democratic chairman that is proposing this. But we are already seeing some pushback from Democrats on the Hill. So even though he has a majority in the FCC Commission, who is to say that the other two Democratic commissioners will agree with this idea going forward? So it will take months to see that — go through the voting process at the FCC, for the public to weigh in, and for there to be final rules.

GWEN IFILL: Cecilia Kang of The Washington Post, as always, thank you.

CECILIA KANG: Thank you.