No One Is Willing to Compromise on Internet Rules

If the best compromises make everyone unhappy, Federal Communication Commission Chairman Tom Wheeler and his proposals for regulating the Internet have lot going for them.

Everyone seems to hate the FCC’s latest trial balloon, floated by unnamed sources in the Wall Street Journal. The compromise proposal calls for splitting broadband into two different services: a largely invisible one connecting networks to one another, and the public one in which people pay to connect their homes to the Internet. The FCC could then regulate the back-end service under a stringent legal authority known as Title II without applying the same legal standard to the consumer-facing Internet. From a political perspective, Wheeler’s hope is to appease advocates who want the FCC to take broader authority over the entire Internet while avoiding an additional round of lawsuits from Internet providers.

The idea of splitting broadband into two services for legal purposes stems from proposals by Mozilla and from an academic named Tim Wu, both supporters of strong restrictions on Internet providers’ rights to treat various kinds of traffic differently. But  the concept has been losing support, probably because backers now think they can get a better deal.

A major point of conflict is the FCC’s reported reluctance to ban paid prioritization—the practice by which Internet providers charge content companies for access to better performance on their networks. Kerry Trainor, chief executive officer of IAC-owned video service Vimeo, says that anything short of an outright ban on paid prioritization will effectively give Internet providers wide leeway. “If you have any system where any sort of prioritization is subject to review, you have a system where you have to resort to litigation,” he says. If Vimeo had to  challenge Verizon or Comcast on the issue, he says, Vimeo would simply be outgunned by the amount of legal muscle the giant ISPs can flex.

Earlier this week, Verizon preemptively announced that it would oppose any move by the FCC to adopt a split. The company published a white paper saying that there is no technical distinction between the two types of Internet service and said the idea wouldn’t make it through the courts. Jeff Eisenach, head of the American Enterprise Institute’s center for technology policy, argues that the split concept is incoherent. “Proposing to regulate half the Internet is like proposing to pollute half a river,” he says.

Wheeler has been backed into a corner that he seems unlikely to escape without a further turn in court. He has tried to play King Solomon via a compromise, but neither side is consenting to his plan to split the baby.

    Before it's here, it's on the Bloomberg Terminal.