As the FCC approved draft proposals on wireline and wireless net neutrality in the US, the Supercomm show in Chicago last week was dominated by the carriers’ angry response. One by one, senior executives used their keynote spots to argue that heavy regulation and neutrality will damage network and service quality, because it will deter players from investing heavily in new technologies.
This was the message from Verizon CEO Ivan Seidenberg, who warned: ‘This is an analog policy that is not built for a digital universe’, while the firm’s EVP of public affairs, Tom Tauke, said that net neutrality rules failed to address core issues of network management, opening up dangers of security breaches and poor service performance. “You’ve got to be careful and not do something really stupid,’ he said.
Private equity groups and other investors expressed fears that neutrality would make return on investment in telecoms even more uncertain and accelerate the flight of capital that has been seen over the past three years.
With such comments ringing in its collective ear, the FCC published its proposals nonetheless, and was immediately countered by proposed legislation to block the actions. Introduced by former presidential candidate Senator John McCain, the Internet Freedom Act would prevent the FCC from enacting rules to stop broadband providers from selectively blocking or slowing certain internet content and applications. Net neutrality rules would create “onerous federal regulation’, wrote McCain, calling them a ‘government takeover’ of the internet that would stifle innovation. The wireless industry has “exploded over the past 20 years due to limited government regulation,” McCain said in the statement.
The rules proposed by the FCC, which would formalize recommendations in place since 2005 and extend them to wireless, would allow web users to run any legal applications and access any legal web sites unfettered by the carriers, and would require service providers to use “reasonable” network management to reduce congestion and maintain quality of service. The rules would also require them to be transparent with consumers about these efforts and the quality of their networks.
The FCC now will seek public comment on its proposed rules, with the goal of finalizing them some time next year. The rules almost certainly will be challenged in court as well as Congress.
Meanwhile, the FCC’s broadband coordinator, Blair Levin (executive director of the Omnibus Broadband Initiative) told Supercomm that mobile broadband would be the biggest driver of growth, but only if the US gains more spectrum, which will mainly rely on clearing current bands of incumbents. ‘I hope policy makers understand the seriousness of it,’ Levin said, adding that the plan needs to be formulated now, since it can take six to 13 years to clear spectrum.
Over in Europe, there is anger in many quarters over the opposite issue ‘ the apparent lack of progress on neutrality. Jean-Jacques Sahel, European regulatory affairs chief for chief neutrality cheerleader Skype, wrote on his blog that the internet telephony service was still being ‘arbitrarily blocked’ by a number of operators, across several EU countries. Although the European Commission is circulating its draft declaration on net neutrality ‘ talking about ‘preserving the open and neutral character of the internet, taking full account of the will of the co-legislators now to enshrine net neutrality as a policy objective and regulatory principle’ ‘ Sahel argues: “So far, we’ve seen no action by the European authorities to stamp out these blatant abuses of what internet users can do online. The excuse that ‘net neutrality is an American problem’ just doesn’t wash any more; it’s too convenient and simply not true.’