“Net neutrality” fight over nothing less than the future business and regulatory model of advanced telecommunications

The state vs. federal showdown over “net neutrality” is about far more than regulating ISPs’ ability to favor or “speed up” some advanced telecommunications services or slow or even block others. It’s a fight over nothing less than the future business and regulatory models of advanced telecommunications (ATC). Should ATC be bundled with services owned or procured by the ISP or be a common carrier “dumb pipe” in which the role of ISPs is primarily to provide connectivity?

Because Internet protocol enabled digital ATC can deliver far more services than the analog voice telephone service that preceded it, ISPs naturally see a gold mine in monetizing these services. An example is their push for “video everywhere” displayed on home TVs as well as personal devices and acquisitions of video content producers such as AT&T’s recent purchase of Time Warner.

This is the ATC as an information service regulatory approach favored by ISPs and expressed in current public policy wherein the U.S. Federal Communications Commission has reclassified ATC as an information service rather than a common carrier telecommunications utility as the FCC classified it in its 2015 Open Internet rulemaking.

The problem with treating ATC as a proprietary information service instead of a common carrier telecom utility is it will always have limited availability because the infrastructure to deliver it will only be built to serve “high potential” neighborhoods deemed sufficiently profitable by ISPs. The FCC’s now repealed Open Internet rules by contrast included a mandate on ISPs to make ATC available to any customer in their service territories making a reasonable request for service. As information service, that provision contained in Title II of the Communications Act doesn’t apply since information services are regulated under Title I of the statute.

Big ISPs naturally prefer Title I information service regulation because it supports their vertically integrated business models favoring proprietary content delivered to end users over proprietary infrastructure. That supports their top lines. And not having to serve “low potential” neighborhoods reduces capital and maintenance costs, benefitting their bottom lines. It’s a lopsided winner take all scheme in which the ISPs win big and consumers lose.