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Posted at 12:37 PM ET, 12/ 6/2010

FCC net neutrality proposal opens door for prioritization and higher fees for consumers

By Cecilia Kang


A proposed net neutrality regulation at the Federal Communications Commission would allow broadband service providers to prioritize their own content and that of partners over that of competitors. The draft proposal also would allow broadband network operators to charge consumers based on how much data they use, according to one source at the FCC who has seen the draft of rules.

What that means is that a company such as Comcast could make its soon-to-be acquired library of NBC content cheaper to watch and delivered at better quality than streaming videos from competitors like Netflix, the source and experts said. Add the permission of usage based pricing, which the source said Comcast insisted on in meetings with the FCC chairman’s staff, and you could see a scenario where users would be less inclined to subscribe to Netflix because they would meet their usage caps and end up spending more money for competing services.

“This allows for fast and slow lanes and while it suggests it would be a negative thing, nowhere does it say it violates the principle of rules,” the sources said on the condition of anonymity because the document hasn’t been made public.

The source said the FCC would require network operators disclose how they are managing services that allow for prioritization of certain content. But for enforcement purposes, carriers don’t have to prove it is reasonable so there is less burden on the carrier.

“If you are Netflix and suddenly it costs subscribers $60 a month to use the service, then this hits you directly,” said Art Brodsky, communications director at Public Knowledge. “Usage pricing is an excuse for not building out your network and the question is how to enforce this and whether a company like Comcast had set usage prices for YouTube but not Comcast content.”

The rules are weaker on wireless. FCC Chairman Julius Genachowski’s proposal would prevent wireless carriers such as AT&T and Verizon Wireless from blocking competing voice and video telephony services (think Skype video or Apple Face Time). But observers say that by clearly drawing rules only on those two areas, the agency has opened the possibility for carriers to block all other applications.

By Cecilia Kang  | December 6, 2010; 12:37 PM ET
Categories:  AT&T, Comcast, FCC, Net Neutrality, Online Video, Sprint Nextel, T-Mobile, Verizon  
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Next: As Comcast-NBC try to tie up merger, news editorials differ on consequences

Comments

This is disheartening, since the comcast dominated area I'm in has one other choice; Verizon DSL(& not even Fios!).Please, FCC & Justice, take your time in considering the ramifications of this merger proposal.

Posted by: Hattrik | December 6, 2010 2:45 PM | Report abuse

We would like to see the rule instead of it being "wikileaked" / anonymously sourced, as I have blogged on here:

http://mediafreedom.org/2010/12/notes-for-fcc-net-neutrality-reform/

This is getting offensive to due process and transparency.

Posted by: MikeWendy | December 6, 2010 2:59 PM | Report abuse

Cecilia
You're right on target with a clear and easy to understand explanation of the issues here. Comcast has actually "played fair" on this, set the cap at a reasonable 250 gigabytes and promising to raise it over time. That's 100 hours a month of video, perhaps more.
Bandwidth is cheap but it isn't free, so it's perfectly fair to charge at some point. It's Time Warner's proposed 10 gig, 2 hours of TV/week cap that's abusive and what we need to fear here.

It turns out that so few people actually watch that much video/draw so many gigabytes that Verizon, AT&T, and the carriers in France don't have any cap. In Australia, Optus just raised their cap to a terabyte, four times as much as Comcast.

With bandwidth getting cheaper and Internet traffic growth slightly decreasing, caps and charges on wired networks should soon high enough enough for most families to watch their TV over the net. I predict that Comcast and the other cablecos will improve their offerings and hold most of the market, but this is the question.

Thanks for the strong reporting. db


Posted by: daveburstein | December 6, 2010 6:15 PM | Report abuse

Cecilia Kang, Google's Reporter at The Post, claims to know the contents of a document which the FCC has not released (in violation of its promises of transparency). Is she psychic? Does she have X-ray vision? Or is she taking fellow Google lobbyists, such as those from the astroturf group Public Knowledge, at their word when they say they know what's inside? Worse still, is FCC Chairman Julius Genachowski leaking the contents to selected lobbyists while keeping the public in the dark?

Posted by: LBrettGlass | December 6, 2010 8:33 PM | Report abuse

This proposal is the exact opposite of Net Neutrality. I am dismayed, although not surprised, that the pseudo-journalist who wrote the article failed to challenge that label and highlight what Net Neutrality actually means.
I stipulate that if all americans had reasonable and competetive choice in who provides their internet, the proposal might make more sense, but we are far from that era, and this reduces the amount of chosen content a consumer has available. Not all content is equal, as anyone with half an operating brain cell may deduce from a hour spent looking at content on the Net.

Posted by: murrayh | December 6, 2010 8:37 PM | Report abuse

So, looks like the Administration can be rolled by the GOP and big money on any number of fronts.

Posted by: OneIfBySea | December 7, 2010 2:42 PM | Report abuse

This is EXACTLY NOT network neutrality. The FCC is selling out consumers to the monied interests and lobbyists of the cable companies.

What is this? 1984? Bad is good! War is Peace! Highway robbery is network neutrality!

The least the Congress could do for us here is outlawing the monopolies that cable companies have over cities if this is how they're going to extort money from their customers. They can say you pay protection money to get our services, or you get nothing.

America falls further and further behind the rest of the developed world, and the current administration ignores the reality of the commercial graft being perpetrated on us.

Posted by: leicaman | December 7, 2010 3:40 PM | Report abuse

This sounds to me like double charging customers. I already pay $40.00/month for my 6 Mb DSL line. If Netflix has to charge $ 60.00/month, that's one hell of an increase in my billing.

I don't see how that can be considered fair. It certainly would not be affordable to me. I already can't afford cable or satellite.

Posted by: dead_naked_drummer | December 8, 2010 6:14 PM | Report abuse

So net neutrality means the big telcos and cable companies can charge me even more for less service and lower quality. Sounds like another republican plan, you know like screaming about the deficit then making it worse with more tax cuts we can't afford.

Posted by: clubdead | December 9, 2010 8:57 AM | Report abuse

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