Net neutrality wins: telecoms warn legal battle, content firms cheer

The US telecom regulator the Federal Communications Commission (FCC) – chaired by Tom Wheeler — on Thursday voted 3-2 in favor of net neutrality rules.

The new game changing rule means a lot for Verizon and AT&T and other big broadband companies in the U.S. AT&T, Comcast and Verizon cannot sell broadband at a “special price” to carry content of Netflix or other content firms on their pipe.

The FCC regulation, which was supported by President Barack Obama and his millions of followers on social media pages — would reclassify broadband Internet access under Title II of the Communications Act, and bars ISPs from blocking or throttling legal content and bars paid prioritization, or the creation of paid fast lanes between content and Internet providers.

There will be a ban on paid prioritization on both wired and mobile networks while reclassifying high-speed Internet service as a telecommunications service under Title II of the Communications Act. The regulation change will allow the FCC to treat Internet Service Providers more like public utilities, such as phone companies, which are subject to stricter regulation.

Who is supporting

Internet and tech companies such as Netflix, Reddit and Vimeo have supported the new FCC rules.

President Obama issued a statement thanking the more than 4 million people who participated in an open comments period last year to voice their support of a free and fair Internet.

“The net neutrality debate is about who picks winners and losers online: Internet service providers or consumers. Today, the FCC settled it: Consumers win,” Netflix said.

“Today’s order is a meaningful step towards ensuring ISPs cannot shift bad conduct upstream to where they interconnect with content providers like Netflix. Net neutrality rules are only as strong as their weakest link, and it’s incumbent on the FCC to ensure these interconnection points aren’’t used to end-run the principles of an open Internet,” Netflix said.

What will happen to investment in broadband?

There’s no information from big telecom network vendors such as Cisco, Nokia Networks, Ericsson, Alcatel Lucent, Huawei, ZTE, etc. If AT&T and Verizon decide to put spanner on their broadband Capex (capital investment), it will hurt the telecom infrastructure market.

Broadband user

American broadband market may face a legal battle, as telecoms and cable providers — such as AT&T, Verizon and others — are expected to challenge the new Internet rules.

Verizon

Verizon’s Michael E. Glover, Verizon senior vice president, public policy and government affairs, said: The FCC’s move is regrettable because it is wholly unnecessary. The FCC had targeted tools available to preserve an open Internet, but instead chose to use this order as an excuse to adopt 300-plus pages of broad and open-ended regulatory arcana that will have unintended negative consequences for consumers and various parts of the Internet ecosystem for years to come.”

US Telecom

US Telecom President Walter McCormick said: “Today’s action by the FCC is the wrong path for achieving broadband deployment in all parts of the United States. It redefines the Internet, inserts the federal government deeply into its management, and invites other countries to do the same.”

“The FCC could best facilitate further investment and competition in broadband services by focusing its efforts on removing the regulatory hurdles to a smooth transition to IP networks, fully implementing Phase II of the Connect America Fund, updating the rural Universal Service Fund for broadband, and taking additional steps to lower the costs of access to local rights-of-way and pole attachments that can make up 20 percent of the cost of deploying fiber,” McCormick said.

AT&T

Jim Cicconi, AT&T’s head of public policy, in a blog post said that the commission’s 3-2 decision — with three Democrats defeating two Republicans — is an invitation to revisiting the decision, over and over and over.

Comcast

Comcast executive vice president David Cohen said: “We fully embrace the open Internet principles that have been laid out by President Obama and Chairman Wheeler and that now have been adopted by the FCC. We just don’t believe statutory provisions designed for the telephone industry and adopted when Franklin D. Roosevelt was president should be stretched to govern the 21stcentury Internet.”

TIA

The Telecommunications Industry Association (TIA) CEO Scott Belcher said: “We share the goal of an open Internet, but Title II regulation is unnecessary and will harm consumers and the economy more than it will help. A light regulatory approach has resulted in nearly two decades of remarkable technology progress and increasing speeds, access and choice. In fact, private sector investment has led to a 250 percent increase in connection speeds since 2010 – jumping from 4.6 Mbps to 11.4 Mbps.  Consumers and the country have realized incredible benefits from the $73 billion in annual private sector investments.”

“The uncertainty created by the FCC’s plan will jeopardize the fast pace of private sector investment and improvements.  In addition to having an immediate impact on investment, the FCC’s plan is a Trojan Horse. If Title II is not struck down by the courts, a new Administration or new Commissioners could push the FCC to implement the full, heavy-handed regulatory authority it provides.

CEA

Gary Shapiro, president and CEO of the Consumer Electronics Association (CEA), said: “CEA supports a light regulatory regime that strikes the appropriate balance among fostering innovation, promoting competition and maintaining broad access to and across the Internet. With this vote, the Commission has instead placed regulatory shackles and new legal risks on the Internet and those who use this technological marvel to create critical new services, products and jobs. The end result for consumers: less choice, higher costs and reduced innovation.”

Baburajan K
editor@telecomlead.com

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