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