Keep the Internet free and open

Should the Internet be considered a public utility?

How you answer that question will define what role you think federal regulators should play in ensuring that all content, from Netflix programs to Rush Limbaugh podcasts, receives equal treatment by the likes of Comcast and Verizon.

The U.S. Circuit Court of Appeals for the District of Columbia ruled this week that the Federal Communications Commission overreached when it laid down rules preventing network operators from assigning fast and slow lanes to content providers.

Verizon had sued the FCC, arguing that the rules made it unfairly difficult to manage online traffic and discouraged investment in broadband technology.

At stake is what’s known as net neutrality, which guarantees that all online content is treated the same by carriers.

Consumer advocates say that if network operators can give favorable treatment to some content providers — those willing to pay for faster speeds — they’ll be picking the Internet’s winners and losers by making it harder for smaller companies to compete.

There’s also the potential for conflict of interest. Comcast, which owns Universal Pictures, NBC and more than a dozen cable networks, could advance its own business interests online and hinder those of rivals.

“The court’s decision strikes a serious blow to a free and open Internet,� said Delara Derakhshani, policy counsel for Consumers Union. “It leaves consumers at the mercy of a handful of cable and phone providers that can give preferential treatment to the content they profit from.�

My feeling is that the Internet is indeed a public utility, like an electricity grid or phone system, and needs to be regulated as such.

But the court made the right call in this case, and the FCC has no one to blame but itself.

This is where things get a little wonky, so stick with me. The FCC has different classifications for telecom services, and those classifications come with different levels of rule-making powers.

More than a decade ago, the FCC designated Internet providers as lightly regulated Title I information services, as opposed to more heavily regulated Title II telecommunications services like phone companies.

At the time, perhaps it made sense: Friendster was the top social network, and it took more than 12 minutes to download a song using a 56k modem. High-speed Internet access changed all that.

As I reported last week, streaming-video heavyweights Netflix and YouTube now account for more than half of North American Internet traffic from 9 p.m. to midnight, according to network management firm Sandvine.

These are seriously big businesses with the size and market muscle to squash would-be competitors. And thanks to this week’s court ruling, they could do just that if network operators offer them the chance to zip through cyberspace faster than everyone else.

If you were AT&T or Time Warner Cable, wouldn’t you want the ability to charge more for special treatment? It’s your network, after all. Why shouldn’t you be able to make as much money from it as you can?

The answer, of course, is that the Internet serves a greater role than just entertainment. It’s crucial to commerce, education, public safety and nearly all other aspects of modern life. As such, the gatekeepers of the Internet have a unique responsibility to uphold society’s best interests.

The court correctly decided that the FCC has only limited sway over a Title I entity. The solution, obviously, is for the FCC to reclassify Internet service providers as Title II entities, which would allow the agency to lower the boom on any network operator that failed to maintain net neutrality.

Easier said than done, though. The big telecom companies already have made clear that they won’t stand for such a change and will use their substantial political clout to keep it from happening.

AT&T shelled out more than $12 million in political contributions last year, according to the Center for Responsive Politics. Verizon ponied up nearly $10 million to politicians.

“Title II is the nuclear option,� said Fred Campbell, executive director of the Center for Boundless Innovation in Technology, a policy group that promotes limiting the government’s role in Internet issues. “It would be far more sweeping than anything that’s been done to date.�

For instance, he said, reclassifying the Internet might require network operators, and possibly even content providers, to seek FCC approval any time they wanted to change their services. Netflix might need official approval just to raise or lower its prices.

“These are the types of issues that would be raised,� Campbell said.

Not really. The FCC could draft its net neutrality rules in a way that wouldn’t impose onerous or silly requirements on companies.

Tom Wheeler, the head of the FCC, hasn’t indicated what course he intends to pursue. But he said in a blog post after the court ruling that his agency “is not going to take over the Internet.�

“It is not going to dictate the architecture of the Internet,� Wheeler said. “It is not going to do anything that gratuitously interferes with the organic evolution of the Internet in response to developments in technology, business models and consumer behavior.�

But he also said the FCC “is not going to abandon its responsibility to oversee that broadband networks operate in the public interest.�

If we were talking about a power company or a water supplier, most of us would have no issue with the government making sure society’s needs don’t take a back seat to corporate profits.

The Internet today is much more than an information service. It’s a rapidly growing public resource that, according to a 2012 study by the Boston Consulting Group, contributes at least $680 billion to the U.S. economy.

As with any other vital utility, clear rules and oversight are needed. It’s the FCC’s job to provide them.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to [email protected].