The heated debate on net neutrality reaches stratospheric temperatures as President Barack Obama joins the call of Web companies and consumer advocacy groups for the Title II reclassification of Internet service providers as public utilities.
On Monday, President Obama issued his strongest statement yet against allowing cable and wireless companies from creating Internet fast lanes available only to big corporations who can pay extra for the speedier delivery of their content at the expense of smaller websites that do not have the budget to get into the fast lanes. Specifically, the President wants a ban on fast and slow lanes on all points of interconnection, not just in the "last mile" connection where the content is delivered from the ISP to the consumer.
"That kind of gatekeeping would undermine the level playing field essential to the Internet's growth," he says. "So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect."
Within hours of the President's statement, ISPs, industry groups and Republican lawmakers who support the cable and wireless industries' stand against government regulation fired back, saying the reclassification of broadband and wireless companies as public utilities like water and electricity will harm what they claim is a competitive environment that has made the Internet industry as robust as it is today.
Comcast executive vice president and chief diversity officer David L. Cohen has issued a statement saying that Title II reclassification "would harm investment and innovation." He further says that the absence of an "intrusive regulatory regime designed for a different era," allowed Comcast to roll out the fastest broadband speeds in the country.
"The Internet has not just appeared by accident or gift - it has been built by companies like ours investing and building networks and infrastructure," Cohen says. "The policy the White House is encouraging would jeopardize this engine for job creation and investment as well as the innovation cycle that the Internet has generated."
AT&T echoes the same sentiment and accuses certain political groups of advocating for government control of the Internet. AT&T senior executive vice president Jim Cicconi believes the "light-touch regulation has encouraged levels of investment unprecedented by any industry and spawned incredible innovation." To reclassify ISPs as public utilities, he says, is "a mistake that will do tremendous harm to the Internet and to U.S. national interests."
"This action is designed to deal with a hypothetical problem posed by certain political groups whose objective all along has been to bring about government control of the Internet," Cicconi says. "The White House is proposing to put the Internet and our economy at risk as a result of such political pressures."
Libertarian think tank TechFreedom argues against Title II reclassification on a different note. TechFreedom President Berin Szoka in a statement says the Federal Communications Commission (FCC), which is currently working on a second set of net neutrality rules, still cannot ban paid prioritization with ISPs reclassified as public utilities. Instead, Szoka says the FCC can only regulate prices to make sure they are just and reasonable.
"In fact, Title II would authorize broadband providers to charge some price to content and service providers for carrying their traffic to users - and there's no precedent for the FCC from 'forbearing' from this requirement in a market that it claims is a 'terminating access monopoly.'"
Szoka goes even further to say that the reclassification would "choke competition" and "validate Russia and China's push to have the International Telecommunications Union regulate the Internet as a telecom service."
However, the Internet industry is not as competitive as its major players claim. FCC Chairman Tom Wheeler spoke for many consumers when he lamented that consumers do not have many choices when it comes to their ISPs and that broadband speeds are not up to par with the world's fastest speeds. Comcast's Cohen himself admitted, in a statement defending its bid to acquire Time-Warner Cable for $45.2 billion, that competing with other providers is too expensive.
"A lot of this comes from the history of cable and the extensive capital investment in cable, which is that the cable part of this industry has never competed against each other," Cohen said. "Given the expense to build in any particular community, I think no cable company, or only rarely would a cable company choose to compete against another cable company,"
Silicon Valley, which has called for government to intervene in ISP's plans to forge business partnerships with content providers and create different pricing tiers for various consumers, strongly supports the President's statement.
"This is great for us at WordPress," says [subscription required] Matt Mullenweg, CEO and founder of WordPress' parent company Automattic. "We're particularly affected by net neutrality because we power the independent web. Our small customers cannot afford to do paid deals with cable and telcos."
The net neutrality debate stemmed in January, when Verizon challenged the FCC's first set of proposed net neutrality rules in a federal court on the grounds that the FCC does not have authority to regulate ISPs because they are classified as information providers and not telecommunications services. Now, the FCC is turning the tables by considering doing just that.
However, given the complexity of the issues presented from both sides of the debate, Wheeler is taking his time to rewrite the second set of rules and says the proposal will most likely not be announced until next year. Wheeler, who is squeezed by public pressure from both sides, one backed by the giant Internet companies and the other by the President, says he is considering a "hybrid" approach to net neutrality which would draw from Title II and the 1996 Telecommunications Act. He admits, though, that both reclassification and hybrid approaches carry "substantive legal questions" that must be weighed carefully.
"The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," he says. "We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges if may face."