FCC Isn’t Considering Pay-For-Access Deals In New Net Neutrality Rules

Back in February, after a federal court gutted net neutrality but before Netflix agreed to pay a premium to Comcast to alleviate its data bottleneck, we predicted that any new neutrality rules would not do anything to prevent the slowdowns that users of Xfinity, FiOS and U-Verse had complained about. If you were more optimistic and holding out hope that the FCC would at least consider this issue, prepare to be disappointed.

Speaking at a press conference earlier this week, FCC Chair Tom Wheeler said the Commission plays an important role in regulating Internet infrastructure, but that this is “not a net neutrality issue.”

That’s a vague enough statement, but a rep for the FCC painted an even grimmer picture of the Commission’s point-of-view when asked by National Journal to clarify:

“Peering and interconnection are not under consideration in the Open Internet proceeding, but we are monitoring the issues involved to see if any action is needed in any other context.”

For those readers still in the dark on this top, here’s a quick primer. Those who understand this stuff can skim ahead.

Netflix and other content companies rarely have a direct connection to an ISP’s network. Instead, their data is carried by bandwidth providers, who then pass the data off to the ISPs for delivery to the customer.

Historically, when a bandwidth provider was beginning to overwhelm an ISP, the ISP would open up more peering ports to ease the bottleneck. Think of it like the supermarket opening up some registers to temporarily alleviate a surge in shoppers.

ISPs had generally opened up these additional peering ports without asking for additional money. Then in the latter part of 2013, Comcast, AT&T, and Verizon all realized they could hold Netflix data hostage by allowing it to bottleneck and telling Netflix that they could pay for a more direct connection to its network.

As we’ve explained before, while some claimed this was a violation of the FCC’s since-gutted Open Internet (aka net neutrality) rules, it’s really an end-run around those rules.

A neutrality violation would have been if Verizon had closed off access to Netflix’s broadband provider. Instead, it was just allowing Netflix traffic to build up by not going above and beyond what it gives to others.

To use the supermarket analogy again: If a store is busy and closes off lanes to deliberately slow down customer traffic, that would have been a neutrality violation. But if the store says “We have two cashiers scheduled right now and we don’t want to pull someone off the deli counter to open another register,” that’s not a violation.

The ISPs say they have a right to be paid for accepting all that traffic from huge content companies like Netflix. Meanwhile, Netflix — thought it’s currently willing to pay — argues that consumers are paying ISPs for a certain advertised downstream rate and it’s up to the ISPs to do what it has to in order to provide the service customers paid for.

And so, after several months of watching its speeds to customers of the country’s largest ISP slide toward zero, Netflix anted up in February, making a deal with Comcast that gives it improved access to the ISP’s network.

In a recent blog post, Netflix CEO Reed Hastings made his argument that a strong, new Open Internet rule would deal with the issues of peering and interconnectivity, saying that so-called paid-peering deals like the one it made with Comcast were counter to the spirit of net neutrality, even if they weren’t a violation of the old rules.

“The essence of net neutrality is that ISPs such as AT&T and Comcast don’t restrict, influence or otherwise meddle with the choices consumers make,” wrote Hastings in a call for the FCC to institute stronger guidelines with the next stab at net neutrality.

Anyone who had hoped for rules clearing up the debate over who is supposed to pay for traffic (Hint: In the end, it’s you), will likely be disappointed, as the FCC statement seems to confirm that the new guidelines won’t be much different than the old ones.

Netflix’s Net-Neutrality Plea Gets Rejected by the FCC [National Journal via GigaOm]