Tech companies split on FCC's 'fast lanes'

Fault lines are forming in the tech industry in the fight over the Obama administration's new proposed net neutrality rules.

While some companies stand to benefit from the "Internet fast lanes" currently under consideration at the Federal Communications Commission (FCC), others worry it will significantly hinder up-and-coming Internet companies.

ADVERTISEMENT
A proposal currently being floated by FCC Chairman Tom Wheeler would allow Internet providers like Comcast and Verizon to charge content companies like Netflix for better access to subscribers.

The deals for better access would have to be "commercially reasonable," a standard the agency would create and then use to assess deals on a case-by-case basis.

The proposal would also establish a basic level of access that Internet providers would have to give to content companies, and would keep Internet providers from blocking certain sites or apps all together.

Wheeler's proposal comes after a federal court struck down key parts of the agency's net neutrality rules earlier this year. Before they were struck down, those rules kept Internet providers from blocking or unreasonably discriminating against Internet traffic.

Critics of Wheeler's plan say the system would create a tiered Internet, where deep-pocketed content companies can afford better access while others are forced to pass those costs along to consumers.

Instead of allowing some "commercially reasonable" discrimination, critics want Wheeler to open the door for the agency to more strictly regulate Internet providers by reclassifying them like the more heavily-regulated telephone companies. That would give the agency more authority to broadly regulate the companies, but it would likely be an uphill political battle for Wheeler.

One of the most vocal critics of these "fast lanes" has been Netflix, which has publicly opposed a deal it recently struck with Comcast to boost video streaming for Comcast subscribers.

The company has warned policymakers against Comcast's proposed merger with Time Warner Cable, saying the deal would give Comcast even more market power and ability to force content companies to pay "arbitrary tolls" like the one Netflix pays.

The online video company came out against Wheeler's plans this week, with a company spokesman calling it "the fastest lane to punish consumers and Internet innovators."

"Netflix is not interested in a fast lane; we're interested in safeguarding an Open Internet for our members," the spokesman said.

Public interest groups say they expect other tech companies to follow Netflix's suit.

"The proposal that we have seen is not good for the growth of the Internet," said Michael Weinberg, vice president of Public Knowledge. He pointed to the "strong" online reaction to Wheeler's plans this week.

Weinberg said net neutrality advocates are "casting as wide a net as possible" to get tech companies to push the FCC for stricter rules.

Though Netflix has been the most vocal opponent so far, Weinberg said he anticipates more will join the fight once the proposal is published after the FCC's meeting on May 15. The five commissioners will vote on it at that meeting.

"No one has actually seen the rules yet. Without the urgency of the press cycle, some of the companies have the luxury of waiting to see" the specifics in the proposal, he said.

But Wheeler has already found a tech ally in the Consumer Electronics Association, a trade group that represents major tech companies — including Google, Microsoft and "fast lane" critic Netflix — as well as major Internet providers like Comcast and Verizon.

In one of the few public displays of support for Wheeler's plan, the trade group's CEO Gary Shapiro said the group supports Wheeler's "competitive approach" to the net neutrality rules.

"In a competitive environment the FCC doesn't need to take much action related to an Open Internet, if any at all," Shapiro said.

"Competitive forces" rather than government intervention should be what preserve the openness of the Internet, which "is one of the greatest economic and cultural forces ever," he said.

"If the Commission does act, then it must give effect to the limits on its authority and take a cautious and factual approach."

One tech lobbyist said she expects other tech companies will either support or keep quiet about the proposal.

"It depends who the tech company is," but most "are playing it very cautiously" to avoid inviting further regulation, the lobbyist said.

"The companies asking for teeth in the [net neutrality] regulation don't want the Commission to start regulating their business" in other ways.

 -- This post was updated at 1:21 p.m.