In The FCC's Own Words: Chairman Wheeler Has Proposed Online Discrimination, Paid Prioritization, And Exclusive Deals

from the that's-not-net-neutrality dept

Last week, we showed how the Verizon court decision made it clear that without Title II reclassification, the internet would be open to discrimination, paid prioritization and exclusive deals. This week, we're looking at how FCC Chairman Tom Wheeler's claims back that up, despite his attempts to argue otherwise.

Chairman Wheeler claims to oppose discrimination and a two-tiered Internet of fast lanes and slow lanes.

Chairman’s speech on 5/15/14: “This agency supports an Open Internet. There is ONE Internet. Not a fast internet, not a slow internet; ONE Internet. … The potential for there to be some kind of ‘fast lane’ available to only a few has many people concerned. Personally, I don’t like the idea that the Internet could become divided into ‘haves’ and ‘have nots.’ I will work to see that does not happen. In this Item we specifically ask whether and how to prevent the kind of paid prioritization that could result in ‘fast lanes.’”

But his proposal would authorize discrimination and a two-tiered Internet of fast lanes and slow lanes.

Chairman’s proposal: “[W]e propose to adopt the text of the no-blocking rule that the Commission adopted in 2010, with a clarification that it does not preclude broadband providers from negotiating individualized, differentiated arrangements with similarly situated edge providers (subject to the separate commercial reasonableness rule or its equivalent). So long as broadband providers do not degrade lawful content or service to below a minimum level of access, they would not run afoul of the proposed rule. We also seek comment below on how to define that minimum level of service. Alternatively, we seek comment on whether we should adopt a no-blocking rule that does not allow for priority agreements with edge providers and how we would do so consistent with sources of legal authority other than section 706, including Title II.” (para. 89)

That is, the rule proposed would allow for cable and phone companies to offer and cut new deals with websites and applications, and those deals do not have to treat similar companies similarly. These priority arrangements could be for a fee, and wildly different fees for each site. As an "alternative" to the proposal, the FCC agreed to ask whether it should adopt a rule that forbids "priority arrangements," but that is certainly not Wheeler's official proposal.

Further, Wheeler is also proposing exclusive deals, with merely a rebuttable presumption against a very small subset -- between an ISP and a website it owns. So Verizon-Amazon or Comcast-Apple exclusives would be legal.

In light of such concerns, we propose to adopt a rebuttable presumption that a broadband provider’s exclusive (or effectively exclusive) arrangement prioritizing service to an affiliate would be commercially unreasonable. (para. 126)

What this means is that the FCC is presuming that all exclusive deals with websites and applications are reasonable -- except for a small subset where a cable company makes an exclusive deal with a company it owns. So if Comcast prioritizes NBC.com (which it owns) and one other company (say Apple or Facebook), then Comcast's deals are presumed reasonable. If Verizon makes an exclusive deal with one investment platform (e.g., E-Trade or TD Ameritrade), then the exclusive deal is presumed reasonable because Verizon does not own either of them.

As I noted in my previous post , if the FCC relies on the authority in Section 706, and not the one in Title II, the FCC must in fact permit discrimination, paid prioritization, and exclusive deals. Meaning, so long as the FCC grounds its rule in Section 706 and not Title II, Wheeler could not have even proposed a better rule.

Filed Under: discrimination, exclusive deals, fcc, net neutrality, open internet, paid prioritization, reasonable, section 706, title ii, tom wheeler