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VOL. 38 | NO. 8 | Friday, February 21, 2014

Local entrepreneurs eye net neutrality battle

By Hollie Deese

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Net neutrality has been in the news for years, but talk has really ramped up since September, when Verizon challenged the Federal Communications Commission’s rules of net neutrality of the 2010 Open Internet Order.

Recently, The U.S. Court of Appeals for the District of Columbia ruled in favor of Verizon, and speculation and worry increased.

On Wednesday, the Federal Communications Commission announced it would not appeal that decision. FCC chairman Tom Wheeler said the agency will, instead, propose new rules to meet the court's requirements.

So what does it all mean?

The concept of net neutrality means everyone is on an equal Internet footing. Internet service providers (Comcast, Verizon, AT&T, etc.) would allow access to all content and apps, regardless of source, and without blocking or favoring particular sites or the products or services they offer.

Alex Curtis, director of Creators’ Freedom Project, says the battle over net neutrality has been going on since at least 1998.

He moved to Nashville three years ago to head up the project, which helps artists promote themselves using innovative techniques like online tools. The project is the work of Public Knowledge, a Washington, D.C.-based public-interest advocacy organization specializing in consumer rights in the emerging digital culture.

There, Curtis was the director of policy and new media and has had more than a decade of experience in telecommunications policy.

“The roots of this concept weren’t born with the Internet,” Curtis explains. “It’s one that’s allowed for non-discriminatory access over telephone lines, enabled trade and passage in the early days of the railroads, and even fair treatment with innkeepers.”

On the Internet, Curtis says the principle of net neutrality has allowed for the free flow of information and commerce without interference.

Most of the non-discrimination rules the FCC put in place, he says, were found to be outside FCC authority in Verizon’s recent challenge.

“This doesn’t mean that the FCC doesn’t have the authority to set a net neutrality rule, but that its most recent formulation – the part of the Telecommunications Act of 1996 on which it hung its rules on – was flawed,” Curtis says.

“Net neutrality isn’t necessarily going to go away, but I presume the FCC is going to take another stab at establishing its authority.”

FCC Chairman Tom Wheeler has said he plans to show an outline for re-establishing rules soon.

How we got here

In 2005, the FCC stated consumers were entitled to certain rights and expectations with respect to their broadband service. According to fcc.gov, those rights are:

Access to the lawful Internet content of choice

To be able to use applications and use services of choice, subject to the needs of law enforcement

To connect to choice of legal devices that do not harm the network

To allow competition among network providers, application and service providers and content providers

After seeking public input, the FCC approved new rules in December 2010 that banned telephone and cable service providers from preventing users from gaining access to certain websites or competing content, but did not keep Internet providers from charging more for faster access.

The three basic rules adopted by the FCC at that time were transparency, no blocking of lawful content, apps or services, and no unreasonable discrimination of network traffic, which could appear as slower or of lower quality.

Comcast has stated it supports those principles, but has not ruled out charging more for high-volume users.

“Comcast has consistently supported the Commission’s Open Internet Order as an appropriate balance of protection of consumer interests while not interfering with companies’ network management and engineering decisions,” Sara Jo Houghland, director of government affairs and public relations with Comcast, stated via email.

“As a result, we agreed in the NBCUniversal Transaction Order to abide by the Open Internet rules for seven years even if the rules were modified by the courts. We remain comfortable with that commitment because we have not – and will not – block our customers’ ability to access lawful Internet content, applications or services. Comcast’s customers want an open and vibrant Internet, and we are absolutely committed to deliver that experience.”

On March 19, 2013, Comcast completed its acquisition of NBCUniversal. Earlier this month, it was announced Comcast was buying Time Warner, making it the largest cable company in the country, and only managed to increase speculation about what is next.

Time to worry?

So while the FCC is working on establishing rules, there is cause for consumer concern.

The stock price for Netflix dropped after the ruling as some assume Internet Service Providers (ISPs) will soon charge more money for services that use more data. In addition, free services like YouTube could begin to have to charge a fee if the company, in turn, has to pay more to provide content.

Curtis says that without net neutrality, ISPs might block content in favor of their own services, or ones for which they have an existing financial relationship, and you can’t blame them for looking out for their own financial interest.

That’s exactly why so many people think rules need to be established.

“If net neutrality rules are not re-established in the long term, our ability to access the Internet and provide amazing unfettered innovation and commerce over it will suffer,” he adds.

In fact, there have already been multiple reports that some consumers were having trouble connecting to Amazon and Netflix over Verizon fiber optic immediately following the ruling. Verizon denies the allegations, but says they are investigating.

Whether it happened or not, Curtis says ISPs blocking or downgrading content has absolutely happened in the past.

“There should be some concern over whether or not that has the potential to happen and what would happen if that did happen,” Curtis explains. “But the providers don’t necessarily feel that is a problem.

“They are essentially saying they control the connection to the Internet for consumers and companies, and there is a level of service they would like to be able to provide to those folks which very much changes how we think the Internet works, both on the consumer side and on the business side.”

This could be especially devastating to Nashville’s creative entrepreneurs who depend on a free and open Internet to connect with their fans, clients and consumers.

For example, musicians used to have to deal with record labels, distributors and others. Now, they can directly connect with fans, sell tickets, sell downloads and more.

If the way the Internet works today changes, that ability to connect directly with fans could potentially go away, or a series of fee-based gateways could emerge.

“Now, you pay to connect to the Internet and that is it – you build your new, innovative and maybe even disruptive business without even having to ask anyone’s permission,” Curtis says.

“If the rules of how people connect to the Internet changes, you might have to pay additional just to get on the full-fledged Internet through your ISP.

“Nashville is a very innovative town, and increasingly very entrepreneurial in the tech space, so if we don’t have access to the full-on Internet, it really changes how people can innovate. People ought to be paying attention to what is happening.”

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