FCC Chairman Tom Wheeler. Image: ALA Washington/Flickr
The Federal Communications Commission will propose new regulations that would let internet service providers charge higher rates for higher-speed delivery of certain types of content, such as online video, according to New York Times sources. Such rules, which would allow ISPs to institute tiered pricing models based on content, would effectively dismantle net neutrality in the US.
While the exact framework has yet to be announced, it's expected that ISPs will be able to charge content providers extra for higher speeds. It would likely be voluntary, which is a key legal distinction; if Netflix doesn't want to pay Comcast for bandwidth, it won't have to. And if Time Warner Cable wants to negotiate different rates for special treatment with Google, NBC, and Netflix, it'll be open to do so. But regardless, it will mean that those that have money can cruise in the internet fast lane, and those that can't will be stuck with what's left.
It represents a fundamental shift away from net neutrality, which assures that end users can pay for faster speeds but all content is treated the same. Net neutrality proponents argue that such equality is crucial for the vibrancy of the web. If Netflix has to pay more for faster streaming speeds, it will probably just pass those costs on to users; if a startup can't afford to leverage a better delivery deal, it's going to find it even harder to compete with the web giants.
Still, the writing has been on the wall for a while. In the decision for Verizon v. FCC earlier this year, the DC Circuit Court of Appeals struck down the FCC's regulations protecting net neutrality based on the FCC's own classification of broadband providers as "information services," which the agency doesn't have the power to regulate. Even so, tiered pricing has been of interest to the FCC for some time.
In remarks last year, FCC Chairman Tom Wheeler—who, it must be noted, used to be a cable and wireless lobbyist—suggested he was open to the tiered pricing model. "We’re seeing the market evolve in such a way that there will be variations in pricing. There will be variations in service." he said. "We want to observe what happens from that, and we want to make decisions accordingly, but I go back to the fact that the marketplace is where these decisions ought to be made, and the functionality of a competitive marketplace dictates the degree of regulation."