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On December 21, 2010, the Federal Communications Commission adopted "network neutrality" rules that are intended to ensure that consumers have open access to content and services they want use on the Internet. Although Internet users will not notice immediate changes in their Internet experience, it turns out that the Mobile Internet is less neutral than the landline Internet, which will have a notable impact on the mobile Internet experience.

 

The decision, adopted by a 3-2, party-line vote, almost certainly will be appealed, and Congressional action may overturn it. The FCC press release on the order is available on the FCC's web site here.

This decision is the latest step in a saga that began more than five years ago when the FCC adopted its Internet Policy Statement. The majority view, as described by the FCC staff, is that the growth of the Internet depends on content and application providers and on their ability to have certainty about their access to customers. The minority view, as described by both Commissioner McDowell and Commissioner Baker, is that the growth of the Internet is the result of the government keeping its hands off both the content and applications that users want to reach and the networks that carry Internet traffic.

LANDLINE RULES

The new rules for landline providers of Internet access have three basic components: transparency, a prohibition on blocking access, and a prohibition on unreasonable discrimination. These rules, with some exceptions, mirror what the FCC proposed in its original notice of proposed rulemaking in 2009.

Rule 1: Transparency

A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider's voice or video telephony services, subject to reasonable network.

Rule 3: No Unreasonable Discrimination

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

MOBILE INTERNET SERVICES

As FCC Chairman Genachowski stated in his opinion "there is only one Internet and it must remain an open platform however consumers and innovators access it". He had announced earlier that the requirements imposed on mobile service providers are less restrictive than for land line providers. Most significantly, the anti-discrimination rule, stated above, applies to "fixed" broadband Internet providers, will not apply to mobile broadband. As a result, in most cases mobile broadband providers will be allowed to provide preferential access to some types of content and applications. In addition, the prohibition on blocking use of devices also will not apply to mobile providers. (As we all know, only certain "approved" devices can access a carriers network- for valid technical reasons)

The upshot of this is that your Internet experience on your mobile device, whether it's a smart phone, notebook PC or other emerging device, will be different, depending on whether you are connected to a carrier provided cellular network, or your premises wireless LAN. Your premises wireless LAN, per the FCC rules, will remain transparent and un-blocked, just like your wired Internet connection. Conversely, your cellular network provider may restrict some services and devices.

As an example, this may impact "converged" voice communications. Smart phones have both cellular and wireless LAN (WiFi) capability. Ideally, the smart phone would detect and engage the premises wireless LAN for originating and terminating mobile calls, and accessing Internet content. Ideally, even guests would receive and make calls or access the Internet over the premises guest access wireless network. When there is no WiFi network available, of course, the phone would use the cellular network.

Using the local WiFi network for in-premises or in-building calling and Internet access conserves scarcer cellular spectrum, which I would think the carriers will appreciate, but they may lose minutes if calls originate or terminate on the premises LAN. With the FCC taking a permissive stand on blocking or discriminating services on mobile networks, the carriers may block, or treat with discrimination, services that permit the smart phone to select a wireless system for calling, based on availability of Wi-Fi.

As Tim Berners-Lee, the director of the International World Wide Web Consortium, and Inventor of the World Wide Web, wrote in a recent article "it is bizarre to imagine that my fundamental right to access the information source of my choice should apply when I am on my WiFi connected computer at home, but not when I use my cell phone."

As I described in my last blog, Cisco Systems is projecting a doubling of mobile Internet data every year for the next five years, which I believe will put a strain, to put it mildly, on the cellular networks' capacity. The FCC's National Broadband Plan intends to free up an additional 500 MHz of spectrum in the next few years to alleviate this problem, but it will be a decade, maybe two, before this new spectrum is fully engaged. For those of us in the ITS industry, we should be able to plan to fully utilize the greater than 500 MHz of unlicensed spectrum available for WiFi devices. Knowing in advance the intentions and legal position of the cellular carriers to off-load voice traffic to the premises LAN will help us immensely in planning and deployment.

The success of the Internet has been based on its' openness. Why should it be compromised because of mobility? The mobile Internet is possibly at risk of being something less than it might be. Think of America Online back in the 1990s, the dial-up system that gave you a restricted subset of the Web. AOL single handedly reduced your Internet experience to a "walled garden". Clearly, there is scarcity to cellular spectrum, but this shouldn't be a reason to discard the openness of the Internet, which has led to so much innovation.

Despite the heated rhetoric on both sides, what is perhaps most significant about this decision is how little it differs from what the FCC described as its policy in 2005. The key differences concern what Chairman Genachowski has referred to as transparency, the applicability of the rules to wireless providers and, most important, turning the 2005 principles into formal rules.

The most significant immediate effect on provider-customer relationships most likely will come from the transparency requirements, which will force providers to disclose their network management practices, the terms of their service offerings and, most significantly, the performance of their services. Depending on how the performance disclosures are structured, this obligation could have a significant effect on marketing broadband services.

It is unlikely that the new rules will have much effect on how landline Internet service providers treat their customers, because the rules essentially require providers to act as they usually do and give providers a wide berth for network management and blocking undesirable content.

It possible, in fact, that the antidiscrimination requirements adopted today will have a greater effect on relationships between Internet service providers and content providers. The order does not explicitly prohibit practices like paid prioritization, but it creates an environment in which challenges to such practices likely will be successful.

Even though the rules for wireless providers are less stringent, it is possible they will be affected more significantly. The rules explicitly prohibit blocking, a requirement that did not exist previously, and the blocking rules for wireless actually are more stringent than those for landline services. However, the non-discrimination principles will not apply to mobile.

As expected, the new rules for landline providers of Internet access have three basic components: transparency, a prohibition on blocking access and a prohibition on unreasonable discrimination. These rules, with some exceptions, mirror what the FCC proposed in its original notice of proposed rulemaking in 2009.

Indeed, these transparency requirements appear to go further than what the FCC proposed last year. Rather than focusing purely on network management techniques, this rule also requires disclosures about the performance of a provider's service and the terms on which it is offered. Presumably, most providers will not find it difficult to disclose the terms of their offerings, but disclosures of "performance" could prove to be more complicated. It is not obvious, for instance, that current advertising, which typically describes maximum offered speeds (rather than typical or average speeds) would comply with this requirement.

This portion of the rules will prohibit Internet service providers from limiting the ways in which customers use their services. Providers specifically will be prohibited from blocking access to content and applications and from preventing customers from attaching "non-harmful" devices to the network. Providers can, however, block access to content or applications that are unlawful. This will, for instance, permit providers to block access to child pornography sites and to sites that host content that is pirated.

The blocking rule does not appear to have been changed meaningfully from the rule that was proposed last year. Thus, it does not appear likely to have much impact on landline Internet access providers.

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