FCC proposes a two-lane Internet

The Federal Communications Commission voted to propose new Internet rules that would allow Internet service providers to charge companies for faster access to consumers. Although couched in terms of "how best to protect and promote an open Internet," the proposal has drawn swift criticism from supporters of so-called net neutrality, which opposes preferential access for any companies.

The proposal also raises the question of re-categorizing ISPs as common carriers, much like telephone companies. Such a change would give the FCC broader power over the companies than it currently has though would face stiff opposition by Republicans in Congress, although an agency ruling does not require legislative passage. The current classification caused court reversals of previous FCC attempts to control Internet rules. The 3-2 vote along party lines to move the proposal forward starts a public comment period.

The combination of approaches might be an attempt to placate both sides enough to gain support for the rulings. Commissioner Mignon Clyburn last week wrote: "There is no doubt that preserving and maintaining a free and open Internet is fundamental to the core values of our democratic society, and I have an unwavering commitment to its independence. My mind remains open as I continue to evaluate how best to promote these fundamental, core values."

However, the specifics are likely to be contentious. Net neutrality supporters have already begun to condemn the two-lane approach. In a statement, Michael Copp, a special advisor to public advocacy group Common Cause and former FCC commissioner, called the approach "alarming" and said, "Any proposal to allow fast lanes for the few is emphatically not net neutrality."

Net neutrality supporters, including many in the high tech industry, are concerned that small innovative companies might ultimately find it too expensive to bring new technologies and business models to market. ISP fees for speedier access, necessary for high resolution video services as one example, favor large incumbents, whether a Google (GOOG) or Facebook (FB), or a Comcast (CMCSA).

ISPs, which include the largest cable and wireless companies, argue that creating a two-tier system is important so they can get the money they need to invest in the infrastructure necessary to keep pace with the fast growth of data use. The argument is weak because the large ISPs already invest money and see significant revenues and profits. In addition, ISPs charge for data traffic, which means both consumers and companies pay for the volume passing through ISP networks.

A reclassification of the ISPs as common carrier utilities will likely be necessary to make any rules stick in court. But a court review would happen only in a legal challenge. It may be that the FCC hopes the two-tier compromise offers enough of a carrot to the ISPs that they won't head back to court.