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US to propose pay-for-priority Internet access rules that protect competition, free speech

LOS ANGELES, Calif. - The Federal Communications Commission is set to propose new Internet rules that would allow Internet service providers to charge content companies for faster delivery of their services over the so-called "last mile" connection to people's homes.

The agency also proposes to enhance government oversight of such deals to ensure that they don't harm competition or limit free speech, according to a senior FCC official familiar with the matter. The official wasn't authorized to speak publicly and spoke on condition of anonymity. FCC Chairman Tom Wheeler is scheduled to present the proposed rules to the agency's four other commissioners on Thursday.

So-called "net neutrality" rules have been hotly debated among policymakers, Internet providers and content companies such as Netflix. Without regulation, say consumer advocates, giant conglomerates —citing business or political reasons— could limit consumers from freely accessing certain types of content.

The new rules are meant to replace the FCC's open Internet order from 2010, which was struck down by a federal appeals court in January. The U.S. Court of Appeals for the Washington, D.C., Circuit affirmed that the FCC had the authority to create open-access rules but said it failed to establish that its 2010 regulations didn't overreach.

While the older rules technically allowed for paid priority treatment, it was discouraged. The new rules spell out standards that such deals would have to meet to be considered "commercially reasonable" and are designed to survive a court challenge in the future.

Under the proposed rules, if such a deal for priority access were challenged, the commission would look at its impact on competition, on consumers, on free speech and civic engagement, and whether a broadband provider was acting in good faith.

The commission will also ask for comment on how to make such dealings more transparent, but didn't have a recommendation on the matter.

The new rules don't affect the exchange of traffic between networks that form the Internet's backbone. That means they won't have any bearing on Netflix's recent agreement to pay Comcast to improve the hand-off of traffic to its network. Netflix had called for the FCC to expand its definition of "net neutrality" rules to cover such connections and guarantee that they would be free of charge. Internet providers say they should be allowed to charge content companies when they absorb more traffic than they send back, like in the case of Netflix.

The proposed rules would also restore a previous rule that prohibits Internet service providers from blocking access to websites, which is meant to help Internet startups to succeed and foster the growth of the Internet economy.

The commission is also seeking to establish the minimum standard of service and will ask the public to help determine that.

The FCC is not seeking to treat Internet providers as "common carriers" such as telephone companies, which would subject companies like Comcast and Verizon to even stricter rules, although it is keeping the option on the table.

The draft rules kick off a policymaking process that involves commissioner votes and a public comment period before a final vote sometime this summer.

The Canadian Press


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