Net Neutrality 2.0 - Back to the future or is this something different?

The decision taken last Thursday by the Federal Communications Commission (FCC) to restore the regulated status of open access to the internet has re-ignited the net neutrality wars in the US. In it its official press release, the FCC stated that it had “voted to restore a national standard to ensure the internet is fast, open, and fair.”

The FCC official statement goes on to boldly claim:“Today’s decision to reclassify broadband service as a Title II telecommunications service allows the FCC to protect consumers, defend national security, and advance public safety.”

By creating a national standard (which by default will become the global norm) the FCC, in its own words, is legally ensuring that broadband is treated as an “essential service”. However, the US regulator (due to the narrow majority in favour of re-establishing a National Open Internet Standard) will want to achieve this by avoiding rate regulation, tariffing, or unbundling as it seeks to sustain continued innovation and investment.

The three key areas now subject to FCC oversight are:1. Protecting an open internet: Internet service providers will again be prohibited from “blocking, throttling, or engaging in paid prioritization” of “lawful” content.

2. Safeguarding national security: The FCC will have the ability to revoke the authorizations of foreign-owned entities who “pose a threat to national security” to operate broadband networks in the US.

3. Monitoring internet service outages: Positioned as a civic protection, this remit will cover the FCC playing an active role to ensure that students, workers, and businesses alike are able to operate without service interruption.

What these changes mean for the internet

The FCC’s battle to regulate the internet is now 20 years old; it began with the then chair mandate to internet service providers (ISP)s to preserve “internet freedom”. In 2015, the Obama administration implemented the Title II open internet principles, preventing selective restrictions on internet provision by providers based on commercial motivations. Title II was overturned by the Trump mandated FCC chair Ajit Pai in 2017 and offset by the net neutrality law implemented at state level by California in 2020. Last week’s decision has effectively reasserted the FCC’s prior position that broadband internet is a utility and should be regulated accordingly. 

While debating the utility aspect of broadband may appear esoteric, it has real-world impacts for consumers - and the services used by those affected consumers. An internet that is subject to arbitrary pricing considerations impacting broadband performance has negative implications for price and performance conscious consumers. More significantly, the knock-on effects can ripple through the wider economy, with digital focused sectors - such as entertainment - particularly prone to second order implications. These can range from lack of control over the user experience, to having to negotiate with individual ISPs across multiple territories to conclude revenue shares for the “dumb pipes” controlling the distribution of their services.  Power seems to have returned to consumers and the digital ecosystem supporting their online lives. However, telcos have a vested commercial and strategic interest in holding the balance of power and are expected to legally contest last week’s FCC classification. Once again, the digital norms long taken for granted have been reasserted - but for how long?