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FCC Rolls Out New Rules for Regulating Internet Traffic

December 21, 2010 at 4:44 PM EST
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The Federal Communications Commission on Tuesday approved new rules, known as net neutrality, for regulating how information and traffic flow on the Internet. Jeffrey Brown talks to Washington Post reporter Cecilia Kang for more.
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JUDY WOODRUFF: Now to new rules for regulating Internet traffic.

Jeffrey Brown has that story.

JEFFREY BROWN: On the information superhighway that is the Internet, what, if any, rules should there be for, say, speed limits or public access? Should such decisions be left to those who build the network, the so-called gatekeepers of the Web? And what’s the proper role for government regulation of online traffic?

Today, the Federal Communications Commission took a major and controversial step towards answering some of those questions, approving its first rules for Internet access, often referred to as net neutrality.

Here to explain is Cecilia Kang, technology reporter for The Washington Post. Welcome to you.

CECILIA KANG, The Washington Post: Thank you.

JEFFREY BROWN: All right, let’s define the terms first, because we used that sort of ugly term, net neutrality, which is confusing. What does it mean?

CECILIA KANG: It is certainly ugly. And it wants — makes one want to fall asleep.

Net neutrality is this idea that — and it’s a very basic principle — that a consumer should be able to access any Internet service, any Internet content that they choose on — to their liking, in their home desk computer, on their wireless phone, whatever they should want to access, they should have the ability to access unimpeded.

JEFFREY BROWN: Equally, unimpeded.

CECILIA KANG: Equally, no fast lanes, no slow lanes, no content that is blocked. And that means, if you want to access a Facebook application on your cell phone, you should be able to. If you want to do a Google search on your computer at home, you should be able to. And it shouldn’t be — the results shouldn’t not be any slower or faster than, say, Microsoft’s Bing.

JEFFREY BROWN: So — all right, so, before we get to exactly what the FCC did, just to continue the explanation, I mean, sometimes, we ask the “Why do we care?” question. In this case, it’s interesting that so many different players seem to care a lot about this, right?

CECILIA KANG: Absolutely.

JEFFREY BROWN: Why is it important?

CECILIA KANG: Well, there’s a lot of money at stake. And consumers are increasingly understanding that this affects them directly, because consumers are using the Internet as their main mode of communications.

They get their news. A lot of people are actually cutting their cable cords and getting their video and entertainment through — and news, video news — through the Internet. And they’re cutting their phone lines and using wireless phones for communication. So, they can feel — there’s more of a visceral connection to why this matters, this idea.

And, so, the companies are very concerned about this, because there’s a lot of money at stake. There’s multibillion-dollar business plans at stake. And along those lines, you have different camps. You have those who actually put the lines into your homes, the Internet access providers. And they provide you the Internet connections through your cell phones, your smartphones and your tablets.

They care an awful lot. And they generally do not like the idea of being regulated more.

JEFFREY BROWN: All right. So, let’s — that leads us to what the FCC has now decided.

Now, start with — because they — they do some differences between those company providers that come in with lines, like the cable companies, vs. wireless. Start with the cable companies, the phone companies.

CECILIA KANG: Right.

JEFFREY BROWN: What’s new for them?

CECILIA KANG: So, the rules are applied more directly to them than they do to your smartphone and your tablet carrier, service providers.

The cable companies and the telecom companies that bring you Internet connection to your home desktop, they will be regulated in a way where they cannot block and they cannot slow down arbitrarily any Web services. They can’t say, for example, oh, you want — you like Netflix. It takes actually a lot of bandwidth. We’re going to slow down the delivery. It’s going to be herky-jerky, a lot of buffering, Hulu, the same case.

They can’t decide to do that. They can’t outright block a Web site either. And there are some real examples.

JEFFREY BROWN: Legal Web sites, we should say, because it’s an important distinction, right?

CECILIA KANG: Legal Web sites. And that is an important distinction.

Any pirated copy, any illegal pornography, these are the kinds of things that are actually not allowed.

JEFFREY BROWN: Right.

CECILIA KANG: But there are some examples of why — and why the FCC has acted on this, in that Comcast has been — the FCC has found years ago, four years ago, that Comcast actually blocked some users from sharing files off this application called BitTorrent.

And that raised a lot of questions and really brought this very — again, this kind of ugly term and this esoteric, wonky notion, net neutrality, into — made it more of a kitchen table issue. They — people realized, oh, this is something that can affect me.

JEFFREY BROWN: Now, the FCC new rule would allow, for the first time, a kind of tiered pricing…

CECILIA KANG: Yes.

JEFFREY BROWN: … to some degree.

CECILIA KANG: That’s absolutely right.

JEFFREY BROWN: Explain that.

CECILIA KANG: And the cable and the telecom companies like that quite a bit.

So, that’s actually not illegal at this point. It never has been, but it’s been frowned upon by regulators. And a lot of cable and telecom companies have been reluctant to basically charge as you go, pay as you go, pay by the bit that you consume. So, they have been reluctant, because the ideas is that, if you are, say, only the — well, the idea is — or the fear is that only the wealthiest will be able to access the Internet.

And you might have other communities who won’t be as inclined to search for news, to actually watch videos, to watch streaming Netflix, for example, but only those who can really afford it. But this idea of usage-based pricing is a big win for cable companies, in that they need to invest in their networks.

These are really expensive, multibillion-dollar networks. It costs a lot to lay down fiber, to bring copper wire into homes. And they want to be able to justify those investments by how much is used. And they don’t want — if users are increasingly using the Internet more and accessing the Internet more and using more bandwidth, they need to put more money into those networks continually.

JEFFREY BROWN: Now, I said this was controversial. And it was actually split at the FCC along party lines.

The opposition to it — and two of the Republican appointees wrote — they both wrote op-ed pieces this week to explain their opposition.

CECILIA KANG: That’s right.

JEFFREY BROWN: But the opposition comes down to really the notion that these new regulations can hamper the development of online commerce, correct?

CECILIA KANG: That’s right. It can hamper the development of online commerce. It can hamper the development of these networks, that these networks providers will be reluctant to put more money into their networks.

I think that the fear is that a lot of the regulatory — the regulatory move here may be more hypothetical than it is real, in that the fears may be hypothetical.

Commissioner Meredith Attwell Baker said in her speech today that she read that there were 60 uses of the word “could,” which shows you that so many of this is projecting what possibly could happen in the future, without there being enough examples of real bad doings by the Internet access providers to justify this kind of regulation.

And, interestingly, that’s why the FCC said that they do not want to impose the same kind of rules that they are for the cable companies and telecom companies to the wireless space, because it is a fast-evolving, new space.

JEFFREY BROWN: They left that whole area untouched for now, largely.

CECILIA KANG: Pretty much untouched, largely untouched.

The only services that cannot be blocked are competing voice applications. So, that means, if you’re Verizon Wireless, you cannot — no longer — you cannot block Skype or Vonage from your app store. But if you decide to introduce a new social networking app, maybe you will decide to block Facebook, and that’s OK by…

JEFFREY BROWN: And, just briefly, now, there was the opposition from the conservative, and then public consumer groups also didn’t like this, because they thought there are not enough protections for consumers, right?

CECILIA KANG: Sure.

JEFFREY BROWN: So this is going to go on.

CECILIA KANG: This is just the beginning.

This is just the beginning of a lot of steps. And this particular rule, the FCC chairman, Julius Genachowski, said he’s tried to strike a compromise. And what he’s done, effectively, by striking compromise, sort of hitting the middle of all these different interests, is, he’s not really garnered a lot of support. He’s not getting a lot of love for this.

(LAUGHTER)

He’s — a lot of his once allies, the consumer groups, say that it’s just not strong enough on the wireless side, particularly because minority groups use cell phones to access the Web more than anyone else.

JEFFREY BROWN: All right, so this will continue in public debates and in the courts now.

CECILIA KANG: That’s right.

JEFFREY BROWN: Cecilia Kang of The Washington Post, thanks very much.

CECILIA KANG: Thank you.