Wolff: Nobody's neutral in net neutrality debate

Net neutrality, the FCC's effort to govern broadband providers who supply Internet access, enters a new chapter as the commission, closing its heated comment period last week, tries again to formulate rules acceptable to the courts and to a set of vehement antagonists.

This will be the agency's third effort to create a policy that comes, in its view, as close as possible to forcing the owners of pipes to treat all distributors of data as equal.

In this, the FCC may hold the least-popular position in what has become quite a grand, passionate and yet thoroughly muddled debate.

There's the pro-business side, reflecting the interests of the companies that have paid for the broadband — cable operators and telcos. They naturally want to be able to charge bigger users higher prices. That's the logical growth area of their businesses —charging the distributors of data as well as the consumers (you and me).

There is the big data side, the major Internet companies making the greatest use of the pipes. They oppose the broadband companies, both because they logically want to limit the leverage the pipe holders have over their own businesses, as well as increase their leverage in their negotiations with broadband providers. Big data suppliers actually want better treatment, they just naturally want it as cheaply as they can possibly get it.

There's the tech-centric, ideological side, reflecting the Internet community's historic belief in level access and the view that government should protect broadband as a common carrier — i.e. Internet data should be treated the same way telephone data is treated (you can't block or slow calls from people you don't like). That's the only way to protect the free speech essence of the Internet — keeping the pipes neutral as regards to how they are used. The Obama administration has generally tilted toward this position, believing it encourages growth and innovation.

But then there is the opposite free-market position: Imposing utility-like regulation, as in treating broadband like the telephone or even railroad tracks, inevitably creates a bureaucratic morass that in fact slows growth and innovation.

Then there is the position of the federal courts (in opinions that generally have a left-right consensus), which ruled in 2010 and early this year that precisely because broadband is not characterized like the telephone as a common carrier, the FCC does not have the authority to mandate equal access. To do so, broadband would need to be reclassified, a move opposed for varied reasons by almost everyone except tech-centric ideologues.

And recently, there's the popular culture, or populist view, promulgated by John Oliver in one of his I'm-mad-as-hell sketches on his HBO show: Cable operators, like Comcast, are bad, and out to screw whomever they can screw, and all Internet users ought to right away file official comments with the FCC during its comment period. Oliver helped to create a groundswell of 3 million citizen comments, most of them, presumably, against the FCC's approach, as well as confused as to the precise issues. (Oliver's network, HBO, is increasingly distributed over the Internet, hence an interested party to this debate.)

And then there is the FCC itself, which, in its efforts to thread the needle in the ever-growing controversy, has created a position objectionable to pretty much everyone. While preserving various more arcane parts of net neutrality policy, it is also proposing to allow a two-tier system. While broadband providers would not be allowed to slow down traffic, they would be able to charge data providers extra to speed up their traffic. (The FCC's proposed rules do not cover wireless, so in a sense it is a three-tier system.)

In this the FCC bows both to the courts and to an unanticipated development in Internet usage: video.

As much as 70% of Internet-distributed data is now video, 50% of it from Netflix. This new video industry — growing exponentially and transforming the nature of entertainment — is getting a free ride on the cable and telco investment in broadband. Arguably, this is unsustainable free distribution, overtaxing networks and slowing the Internet for everyone. Equally, this new video industry, which has grown up on the basis of free distribution, in fact wants more speed and, as well, to erect economic barriers to other Internet upstarts. Indeed, Netflix negotiated a pay-for-speed deal with Comcast, before deciding — in a jiu-jitsu move in what will surely be an ever-continuing negotiation with broadband providers — to oppose the FCC's new rules, which would permit such deals.

Notably, it is the cable companies, which obviously have a vested interest in protecting the cable television business, that have come, mostly by happenstance, to be the main providers of Internet access. Net neutrality has allowed their competitors to flourish (on the strength of cable's investment); a lessened net neutrality policy could now allow cable to stifle those competitors (or at least improve cable's negotiating position).

So, arguably, the subtext of the net neutrality debate is not a war for the soul of the Internet, but another chapter in the battle to control video distribution (often a function of regulatory nuance). And it is not just cable video against Internet video, but now-powerful Internet-video distributors against their own nascent video competitors.

It is to the advantage of various sides in this debate to continue to cast the Internet as what it once was, a commons and a free-for-all, and our own thing, deserving of special protection. And it would surely be politically ill-advised for any of the sides to suddenly argue that the Internet isn't about freedom. But everybody — except die-hards, John Oliver and many members of the Obama administration — knows that the Internet is fast becoming the television business.