May 19--One of the marvels of the Internet to date is that it's largely been a level playing field where there is equal access to all (at least those not blocked by oppressive governments), an arrangement that has not only encouraged innovation and investment but greatly benefited ordinary consumers. U.S. officials keep claiming to support so-called "net neutrality," but interpretations of what that means seem to vary widely.
At least that explains how last week the Federal Communications Commission could issue rules that reportedly uphold net neutrality but also raise the possibility of pay-for-preference treatment. By a 3-2 vote, the commission advanced regulations for public comment that would allow certain broadband companies to charge more for a "fast lane" type service on the Web.
While it appears to be an improvement over what the commission has embraced previously, it is certain to be inadequate. One problem appears to be that existing law may not be on the FCC's side -- a U.S. Court of Appeals ruling in January established that the independent agency can't regulate broadband service as it does a phone company. That has cast doubt over whether the FCC even has authority to guarantee everyone will get the same level of Internet service.
What the FCC embraced last Thursday mandates that broadband providers like Comcast Corp. or Verizon Communications Inc. provide some baseline level of service and prevents them from blocking or slowing down Web content, as some have done in the past. But those providers could make arrangements with companies to offer preferential treatment and faster speeds for a fee -- a process that would be regulated by the FCC as a "telecommunications service."
The company most often mentioned as a target for such an arrangement is Netflix Inc., which streams video content that takes up much broadband width. Netflix officials have made it crystal clear they don't want preferential treatment, but providers would love to charge them additional fees for the burden they place on the system. Thus, much of the net neutrality discussions have centered on that struggle among behemoth communications companies.
FCC Chairman Tom Wheeler's pledge to guard against Internet "winners and losers" is certainly in the right spirit but one has to question whether the pledge can be backed up. The real danger here is that once this kind of pay-for-performance is sanctified, it will blossom and grow as large companies try to dominate the Internet and small start-ups get squeezed out.
Unfortunately, the debate appears to be -- like everything that goes on in Washington -- shaping along partisan lines. The commission's decision featured three Democrats voting against two Republicans, the latter opposing the rules as unnecessary. Republican appointees are apparently content to allow providers to charge whatever they want for whatever level of service without regulation -- a position that might be acceptable if broadband access was unlimited which it isn't, or there was an Internet alternative readily available (sorry but overnight delivery by the U.S. Postal Service doesn't cut it).
To regulate or not to regulate? That's not really the question. Rather, it's a matter of achieving fairness, something a two-tiered system is unlikely to accomplish. This is one case where keeping a level playing field actually requires greater government intervention, not less -- much in the way that other kinds of utilities are regulated. The U.S. decided long ago that electricity and phone service were too vital and irreplaceable to be left to the tyranny of an unfettered marketplace although some level of competition has been preserved in both.
Unfortunately, the ideal solution may require an act of Congress which appears incapable of dealing with an issue this complex and hotly debated. That's unfortunate but it's also a reality -- FCC rules are likely as good as it's going to get.
But too much is at stake in this debate, particularly given our increasingly information-centered economy, to take an incautious approach. It is the interest of consumers -- not Comcast, Google or Netflix -- that should be considered paramount. As soon as there's a fast lane, it's almost certain the only other option will be the slow one -- a gap that is just as sure to expand as the difference between the salaries of tech company CEOs and those of the sales associates selling computers at Best Buy.
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