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This ISN'T Net Neutrality. This is Net Google. This is Net Netflix – the FCC's new masters

In our must-read analysis, how power shifted

Part two What is striking about the FCC's rules on net neutrality, released today and likely determining how the United States does internet access for the next decade, is how radical they are.

Radical is something that federal agencies rarely achieve because radical in the context of the large machinery of government is often a sign that a particular group has been given too much unchecked power.

Critics of the new net neutrality rules will certainly be making that argument: that the rules represent unchecked government power grabbing; bureaucrats imposing themselves on the free market.

Meanwhile, on the other side are those who can't quite believe that their petitions and the four million public comments have turned the course of a government regulator, especially when set against the might of Washington DC's big beasts: the cable companies. It is a rare victory for the little man.

But the reality is neither of these are true. What the net neutrality rules really demonstrate – and a little sooner that we are all comfortable with – is that a new status quo is emerging. And that status quo is Google, Netflix, Facebook et al.

There's been no Damascene conversion; the FCC hasn't suddenly discovered it must fight for the people's rights: it's simply realized that it's time to serve new masters.

And as excited as some of us all are that Comcast, AT&T, Time Warner have been given a bloody nose after years of price gouging and focusing on profits over customer service, the fact is that the new rules are simply paving the way for the next generation of companies who will bend the market and government to their profit-making will – and be given the freedom to do so in the policies of today.

Here we go ...

On reading the rules – and don't buy the line that it is only eight pages of rules with 300+ pages of mere commentary – two things become clear:

  1. The FCC has taken a leap of faith and produced a Hail Mary for the internet age.
  2. The people that will be most served by the rules are not consumers but large internet companies.

The FCC repeatedly acknowledges within the rules that it doesn't really know what it's doing.

Its own "open internet" plan from last year decided that broadband providers should provide all information about network packet congestion including the source of it, its location, its size and so on. It learned in the course of this process that it didn’t actually understand the internet's infrastructure and so:

We decline at this time to require disclosure of the source, location, timing, or duration of network congestion, noting that congestion may originate beyond the broadband provider’s network and the limitations of a broadband provider’s knowledge of some of these performance characteristics.

The same is true for packet corruption. And as other have been pointing out recently, for prioritization of packets.

The FCC knows it is feeling about in the dark. It says: "While we have more than a decade’s worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context."

This was in response to the sudden pulling out of an extension of the rules to interconnections. It happened almost at the last minute, and followed a letter from Google (quite how Google found out the details and was able to write a letter that perfectly encapsulated what the FCC needed to hear is available for speculation.)

Google and Netflix didn't want to see interconnections between networks regulated, and so it wasn't. While the FCC sees future possible negative motives in the cable companies, it seems to think the opposite is true when it comes to the internet companies: "We find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules."

There are numerous other examples of where the FCC acknowledges that it doesn't really know what it's talking about but it is going to extend its powers over the internet anyway because it believes that's the right thing to do.

And when it is hit with the inevitable complaints that require it to enforce or apply its new rules? Well, it is going to ask others:

In order to provide the Commission with additional understanding, particularly of technical issues, the [Open Internet] Order delegates to the Enforcement Bureau the authority to request a written opinion from an outside technical organization or otherwise to obtain objective advice from industry standard-setting bodies or similar organizations.

And who will be first in line to provide that expert opinion? We'll give you a clue: its name begins with "G."

While the FCC gives itself powers in areas it doesn't understand in order to "protect" the new status quo – noting that it will ask those same companies how it should best protect them – on the other side it creates restrictions on the old status quo, and asks others to devise what they should be.

The internet companies are brave providers of new services to consumers whereas broadband providers are "gatekeepers" that "actually choke consumer demand for the very broadband product it can supply."

The FCC is going to force cable companies to provide many more details over their internet offerings: everything from speeds, rates, restrictions and packet loss stats. And it will do so for the consumer.

But, it doesn't know how to. So it is asking its Consumer Advisory Committee to come up with a plan within six months.

The FCC is also going to be the place for disputes over how cable companies are ripping off consumers and internet companies on a "case-by-case basis." But it doesn't have such a facility, and has never really run one before so it will have to create and hire a new ombudsman.

In essence, the FCC is not just feeling around in the dark, it has decided to run forward into the poorly lit future.

On the spot

You could argue that it didn’t have much choice given Verizon's legal challenge to its previous open internet rules. But, of course, the FCC could have taken many other more conservative routes.

You could also argue, with some justification, that the watchdog is acting against what have been clear abuses of market power by cable companies. But even the FCC acknowledges it has gone far beyond what was necessary to counteract those problems.

And you could argue that it is fighting to keep the path clear for a bright internet future. But you should note the irony in keeping the route as open as possible for internet companies while at the same time arguing that strict controls need to be placed on cable companies.

There was some consternation when President Obama chose Tom Wheeler as the FCC chairman. He was, after all, a former chief executive of the National Cable Television Association (NCTA) and former head of Cellular Telecommunications and Internet Association (CTIA).

As TV funnyman John Oliver famously put it, as a former lobbyist for the very industry he was supposed to be overseeing Wheeler, "that is the equivalent of needing a babysitter and hiring a dingo."

Certainly, there was a time when the FCC pushed to make sure that telcos were unconstrained by hindrances; that they were free to ply their trade and make the world a better place even when there was evidence they were abusing their position.

These rules indicate that that time may soon be passed. The real shift will have come when the future head of the FCC is criticized for his lobbying experience working for the Internet Infrastructure Coalition. ®

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