Tomorrow, on February 26, the FCC will be voting on a proposal submitted by FCC Chairman Tom Wheeler earlier this month. If passed, this proposal will radically change the Internet in extreme ways, and the nation is focused on the FCC now more than ever before. Politicians in both federal and state governments, ISPs and even celebrities have commented on this pending proposal.
The proposal from Wheeler focuses on three main points: Internet as a utility, community broadband, and rules of the Open Internet. Wheeler cites Title II of the Communications Act to support the proposal.
Since the founding of the Internet, only a handful of major ISPs have provided the majority of Internet services. Although this is not a problem in and of itself, these ISPs have faced little competition over the years, and as a result, consumers have experienced less than optimal service and pricing.
Internet As A Utility; Municipal Broadband
In most areas of the United States, only one or two ISPs offer service. For example, I recently attempted to change my ISP from the local cable company, Armstrong, to a competing service from Verizon, AT&T or Frontier. Where I live in southern Ohio, Frontier has very poor service, because the closest network hub is far away and the network is overloaded. Why not subscribe to AT&T or Verizon, then? Because if you call either company to register for service, they'll route you to Frontier.
Despite technically being competitors in the same markets, ISPs have effectively marked up the United States into areas of service controlled by each company, and they refuse to compete with each other. As a result of this non-competitive relationship, ISPs have been able to charge higher prices while providing slower Internet speeds than is common in many nations around the world.
As a result of the poor service offered by ISPs, some cities such as Chattanooga, Tennessee; Wilson, North Carolina; and Cedar Falls, Iowa, have developed their own municipal broadband networks that offer much faster Internet at a lower cost. ISPs lobbying at the state level have gotten laws passed that have since halted the development of these municipal broadband services.
This part of Wheeler's proposal is arguably the most radical, and the most heavily opposed by ISPs. The proposal would turn Internet access into a government-regulated utility. As a result, in areas where traditional ISPs do not offer adequate rates for fast Internet service, states and cities would be obligated to develop broadband networks owned and operated by the government.
This is a clear threat to existing ISPs, as it would remove their ability to operate without significant competition. ISPs such as Comcast and AT&T have frequently posted operating income totaling over $10 billion dollars, so while profits will drop, the major ISPs can easily afford to offer better rates for faster Internet. Those service providers who don't will likely suffer heavy losses as customers jump to different providers.
The Open Internet
The other major part of the proposal being discussed refers to restricting the control and influence ISPs have over users of their services. In recent years, ISPs have abused the amount of control they have on the Internet. To save costs and reduce the load on networks, ISPs have started throttling the Internet speed of users with unlimited Internet plans in an attempt to curb data usage. Often, this is done without notifying end users.
For marketing purposes, ISPs have also been spying on users of their services. By doing so, ISPs are able to better target advertisements and sell information to other companies.
Internet services such as Netflix face difficulties working with ISPs, too. ISPs threatened to drastically limit bandwidth for services like Netflix unless those service providers agreed to pay a fee for fast-lane service.
The proposal will effectively end all of this by removing ISPs' ability to examine what traffic is passing over the Internet. It will become illegal for ISPs to monitor what websites you are visiting and what services you are using. For this reason, ISPs will not be able to sell information about your Internet usage for marketing purposes, and they won't know what services you are using, be it Netflix, YouTube or Tom's Hardware.
Mixed Reaction From ISPs
ISPs have mixed reactions to the proposal. AT&T has been arguing that the FCC should not be able to make such changes to the Internet using Title II of the Communications Act and is preparing arguments to file a lawsuit against the agency.
Sprint has actually spoken in support of the upcoming proposal, seeing the change as positive for customers and the telecommunications industry. T-Mobile, in an interview with The Wall Street Journal, stated that while it does not favor the proposal, nothing detailed in the proposal was concerning to it or its future plans.
Verizon has taken a similar stance as AT&T, but at the same time, it has taken steps to improve its services and prepare for the proposal to potentially pass.
The proposal will be the focus of the FCC's Open Meeting, which will be tomorrow (February 26), starting at 9:30 am EST. The FCC commissioners' vote will follow.