How Tom Wheeler's FCC plan will wreck your Internet

Don't be fooled: The FCC chairman's plan is to profit big ISPs at the expense of everyone else

FCC Chairman Tom Wheeler is the Michelangelo of lobbyists, and the proposal for net neutrality voted upon by the Federal Communications Commission this week is his Sistine Chapel.

Wheeler has managed to forward his proposal to kill net neutrality in a country where almost everybody wants net neutrality. He's doing it by exploiting the ignorance, gullibility and passivity of the public, the anti-regulation platform of the political right and truckloads of money from the industry he serves at the expense of the public.

Let me tell you about the best lobbyist in America.

Wheeler, the lobbyist in charge

Right out of college in the mid 1970s, Wheeler began his long career representing companies that would come to oppose net neutrality. He started at the National Cable & Telecommunications Association, working there for more than a decade and rising in the ranks to become its president.

After working some years at a startup, then as a venture capitalist, Wheeler returned to industry advocacy in 1992 to head the Cellular Telecommunications & Internet Association for 12 years.

Wheeler is the only person ever to be inducted into both the Wireless Hall of Fame and the Cable Television Hall of Fame for his tireless efforts on behalf of the industries. (Note that in the U.S., companies that provide Internet service and wireless tend to be the same companies.)

Both of the associations where Wheeler worked promote the interests of member companies. The main interest of these companies is making as much money as possible, and net neutrality is a barrier to that goal.

In order to get himself nominated for the FCC chairmanship, Wheeler raised more than $700,000 for President Obama's presidential campaigns. As a super-lobbyist, his nomination was controversial, but the industries he championed all strongly endorsed him, pressuring both Obama and Congress to nominate and approve him, respectively.

A former FCC chairman, by the way, Michael Powell, who held the job from 2001 to 2005, currently has Wheeler's old job as president and CEO of the National Cable & Telecommunications Association. See how that works? It's the old revolving door between making scads of money lobbying for the industry and then for a short while pretending to "regulate" it while instead continuing to advocate for it.

Understanding net neutrality

Before we talk about what happened this week, let's first clarify the whole issue of net neutrality.

Net neutrality means that Internet service providers, or ISPs -- Comcast, Time Warner Cable, Verizon, Cox, AT&T, Charter, Frontier, Suddenlink, CenturyLink and so on -- deliver all traffic without playing favorites between sources of content. For example, Google can't pay Comcast to give priority to YouTube traffic streaming to your home.

Note that net neutrality is about the connection between your ISP and your home -- the so-called "last mile." It has nothing to do with the connection between the source of data and the ISP.

ISPs aren't going to offer net neutrality voluntarily, so government regulation is necessary to make it happen. The question is: How much regulation? How neutral should the Net be?

At one end of the spectrum, there is true net neutrality through maximum regulation. The ISPs would be re-designated as "public utilities" or "common carriers" like the phone system. That would give the federal government the legal right to dictate service levels, prices -- everything. This is the option favored by many Silicon Valley companies, by entrepreneurs and by the general public, for the most part.

At the other end of the spectrum is zero net neutrality and zero regulation. The ISPs can sell priority to the highest bidder and even provide exclusivity to sources of data -- for example, without regulation, Netflix could pay Comcast to stop delivering HBO Go programming over the "last mile." If HBO doesn't like it, they can pay up. This is the option favored by the companies Wheeler has spent his career working for.

Because the idea of total regulation -- the "public utility" option -- is so unacceptable to the powerful ISP industry and also to many conservative Republicans, the FCC has avoided proposals that would institute this status or label for ISPs. Instead, we have a de facto net neutrality situation without that designation.

Net neutrality is very hard to kill in the U.S. It has been a fundamental principle of the Internet since its inception and is backed by just about every major person and company involved in creating and building the Internet. No one has ever been able to figure out how to steal net neutrality from the public.

Until now.

Wheeler's indecent proposal

The FCC voted Thursday on Wheeler's new rules for net neutrality. They approved the motion to allow the rules to go forward and to seek public comment on the question of making ISPs "common carriers."

Wheeler said his proposal doesn't allow for "paid prioritization" -- favored access for the companies that pay ISPs for faster and more reliable data connections -- but in fact it does, and that's one point left open for public comment. Under the proposal, ISPs are free to sell fast access for certain types of content, as long as they can show that it does no harm.

He claimed net neutrality is preserved, and that consumers won't be harmed because he said the FCC won't allow ISPs to slow down users' connections beyond what they pay for.

He also couched his proposal in warm and fuzzy language, such as the following: "I will not allow the national asset of an open Internet to be compromised," Wheeler said. "The prospect of a gatekeeper choosing winners and losers on the Internet is unacceptable."

Those are the right things to say because that's exactly what the public wants. But the whole proposal is in fact the opposite of that. It compromises the open Internet and grants gatekeepers status to ISPs which get to choose winners and losers on the Internet.

The "fast lane" prioritization that Wheeler wants to allow for the first time, clearly favors large companies over small ones, rich organizations over poor ones and existing companies over startups.

The truth is that "fast lane" prioritization directly benefits only high-bandwidth data sources like Netflix, YouTube and their ilk. That's today. In the future, we don't know what high-bandwidth, real-time applications might emerge. Maybe games will gobble up increasing bandwidth. We could see shared virtual reality social spaces, of the kind Mark Zuckerberg envisions with his Oculus VR acquisition. The Internet's future applications haven't been invented yet.

In the future Wheeler is proposing, small startups in these emerging spaces will be locked out, unable to pay for prioritization while the existing giants will buy high performance.

The fact that Wheeler opened the issue for public comment, including and specifically the question over labeling ISPs as "common carriers," sounds like reasonable compromising, when in fact it's the opposite.

The four-month comment period assures that the actual decision and implementation will happen just after the mid-term elections, when most initiatives opposed by the public are scheduled.

And the question of "common carrier" status is a poison pill, a red herring, a diversionary tactic. It's purpose is to give the political right something to fight and reject.

Wheeler's proposal is brilliant because it takes the U.S. as far away from net neutrality as possible by presenting the killing of net neutrality and making it sound like the opposite.

Wheeler's proposal sounds fair, balanced and transparently arrived at. In reality, it's the Mother of All Gifts to ISPs, accompanied by smoke and mirrors and crafted by Wheeler himself in secret.

The most subtle aspect of Wheeler's proposal is that he moves the U.S. from a country where Internet access is equal by default, to one in which it's unequal by default. It provides the FCC with the future discretion of calibrating how much abuse the agency allows simply by how it chooses to enforce or not enforce the new rules. It moves Internet access from a solid footing to a slippery slope.

How Wheeler's net neutrality rules will wreck the Internet

But the real damage from Wheeler's proposal isn't sufficiently appreciated.

With net neutrality, ISPs are under pressure to constantly upgrade the speed-price ratio. Under the old rules, it was impossible for ISPs to improve Internet connections for any data source without improving it for every data source. The incentive was to keep improving service for all data sources.

With paid prioritization, ISPs have the opposite incentive. They get paid more when data sources are unhappy with unpaid performance. They make data sources unhappy by making customers unhappy. And you do that by gaming the expected rise in network performance.

See the genius in that? Let me give you a simple example. Let's say a person signs up with Comcast to get 10 Mbps speed connectivity. Both Netflix and Amazon movies are delivered at up to 10 Mbps. Then Amazon comes along and pays Comcast to deliver only Amazon content at 20 Mbps. Comcast can prove that nobody was harmed because the customer is paying for 10, but in one case they're getting 20. What's the harm? The Amazon speed is frosting on the cake.

That might even sound reasonable, until you consider the fact that we have an expectation that Internet connection speeds will keep going up. I should expect to get 20 Mbps next year for the same price I get 10 this year. Companies like Netflix and Amazon keep increasing the quality of video and other content based on this expectation of rising performance.

But if key companies are paying Comcast to provide that level of service, Comcast wins by keeping the base data rate low while raising it only for data sources that pay up.

Consumers don't know what specific data rates really mean. All they know is they pick a plan and, when they watch streaming TV shows and movies, boy that Amazon is much better than Netflix. Might as well just cancel Netflix.

Amazon wins. Comcast wins. The Internet loses. We end up with de facto paid prioritization and the death of net neutrality.

ISPs would have an incentive to make last-mile connections unacceptable for data sources that don't pay. The incentive is to improve service for those who pay, and to not improve service for those who don't.

That's the worst part of Wheeler's proposal. If approved, it will slow the rate of progress for Internet performance in the U.S. for all data sources except the big, rich companies that pay.

Customers expect steady increases in network performance. Wheeler's proposal will give ISPs incentives to deliver on those expectations, but only for the companies that pay special rates for priority. Over time, the customer perception is that progress is being made, but that startups and nonprofits and other types of information just don't seem to be keeping up, for some reason.

This, combined with a new unlevel playing field that punishes innovative new startups, will damage the U.S. economically, culturally and socially for the financial gain of a tiny number of ISPs.

Tom Wheeler is truly a lobbyist who delivers.

This article, How Tom Wheeler's FCC plan will wreck your Internet, was originally published at Computerworld.com.

Mike Elgan writes about technology and tech culture. Contact and learn more about Mike at http://Google.me/+MikeElgan. You can also see more articles by Mike Elgan on Computerworld.com.

Read more about broadband in Computerworld's Broadband Topic Center.

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