Uncommon Wisdom

Dec 31 2009   1:58PM GMT

2010 net neutrality and handling premium services

Tom Nolle Tom Nolle Profile: Tom Nolle

We may well get “net neutrality” in 2010, but that may not answer all of the questions everyone already has about the issue. The Internet/broadband era created a different framework for services than that envisioned by regulators, even those involved in the Telecom Act of 1996.

The Internet is essentially an open pipe, and so carrying it effectively creates an open network. This collides in a somewhat philosophical way with a stated FCC principle that Internet services are information services and don’t require sharing. The FCC’s intent was to immunize the broadband infrastructure being deployed from unbundling, however, and not to create a kind of semi-walled Internet. Some of the potential confusion was addressed by the FCC’s net neutrality principles in 2005, and many (including most in the FCC) see the new regulations as simply codifying what were originally informal principles.

The big kicker, as we’ve said, is that the FCC is looking at whether operators might dodge the notion of net neutrality in traffic handling with parallel services based on IP but not part of the Internet. IPTV is such a service in many geographies. The FCC could decide that these adjacent IP services need regulation. It could simply say that parallel services aren’t the Internet and aren’t covered by the Internet broadband ruling, thus opening another round of regulation for the services alone. In turn, that could decide that the infrastructure for those non-Internet services has to be shared. The list of possible outcomes is endless.

It’s not likely, in our view, that the FCC intends to be totally radical here; it knows that broadband investment is fragile. It is likely, we think, that there will be more protection against piggybacking premium handling on Internet service.

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