FCC Proposes Allowing Streamers To Strike ISP Deals
The Federal Communications Commission will propose allowing streaming companies such as Netflix to pay Internet service providers for faster transmissions directly to consumers’ homes.
Until a federal appeals court tossed out net neutrality rules earlier this year, the FCC prohibited providers from preferring the content of one source over another. As the FCC prepares to recast the rules, some in the industry have advocated that the agency address the issue of whether a content provider can pay ISPs to get around heavy Internet traffic.
The provision is part of new net neutrality, or open Internet, draft proposals that FCC Chairman Tom Wheeler will forward to commissioners Thursday. They will be voted on at the agency’s May 15 meeting.
The proposal will likely come under attack from net neutrality advocates, who support the equal treatment of all Internet traffic. “The FCC is inviting ISPs to pick winners and losers online,” said Michael Weinberg, vice president of technology advocacy group Public Knowledge. “The very essence of a ‘commercial reasonableness’ standard is discrimination. And the core of net neutrality is non-discrimination. This is not net neutrality.”
Late Thursday night, Wheeler issued a statement saying the FCC is not “gutting the open Internet rule. … There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. … Behavior that harms consumers or competition will not be permitted.”
In the proposal, the FCC will still insist that the ISPs offer a basic level of service to subscribers, but will be able to “enter into individual negotiations with content providers,” according to two FCC officials. They did not want their names used because they are not authorized to discuss the issue publicly.
Such arrangements would be reviewed by the FCC on a case-by-case basis to make sure they are “commercially reasonable,” they said. The provision presumably was included so that smaller companies would not be priced out of the market.
The FCC officials emphasized that the proposal addresses only “the last mile” that connects the ISP to customers’ homes. It does not address other aspects of Internet traffic such as the back pipes used by content providers to send data to ISPs.
Netflix recently agreed to pay Comcast to connect its servers directly to Comcast’s network for faster streaming. Net neutrality opponents have argued that such arrangements must also be addressed by the FCC as it revises its rules.
Even the executive who struck the deal, Netflix CEO Reed Hastings, conceded that his arrangement with Comcast was one he made reluctantly. He later urged federal regulators to craft stronger net neutrality rules. ISPs “must provide sufficient access to their network without charge,” he said.