Guide to Network Neutrality and FCC Regulation
Telecommunications, the FCC, and Net Neutrality in the United States
Oct 22, 2009
It would appear that Internet technology is accidentally fusing historically divided factions within the telecommunications industry, with 21st century innovators struggling to build new businesses off the backs of infrastructure built by 20th century service providers.
As demand for complex computers and portable devices increases, traditional carriers like AT&T and Comcast are offering customers Internet services over sophisticated networks, leaving web-based content and service providers like Google and Skype at the mercy of those who hold the key to the Internet's gateway.
AT&T and Monopoly
According to Cellular South CEO, Hu Meena, AT&T and Verizon make up 80% of new growth in the mobile carrier industry, with AT&T sending clear signals today that it could potentially return to its monopolistic roots of the early twentieth century.
The company’s Bell Systems monopoly compelled the government to create the FCC (Federal Communications Commission) in 1934, also pushing the Department of Justice to file an anti-trust lawsuit against it in 1974, which eventually split "Ma Bell" into seven independent Regional Holding Companies.
Given its fragile past, AT&T's recent negotiated contract with Apple, which makes it the sole network carrier for the popular iPhone device, has people nervous about its potential to squash competitors that offer cheap video and voice services via the web.
When Apple approved Skype's eagerly-anticipated VoIP (Voice over Internet Protocol) app earlier this year, iPhone users quickly learned that AT&T and Apple's exclusive contract barred people from accessing the carrier's 3G network to place web-based calls using Skype.
Network Neutrality
In 1996, the 125th Congress passed the Telecommunications Act, which gifted corporations virtually limitless opportunities to concentrate media ownership, resulting in a decade of large acquisitions and mergers that served to thin the market and quell competition. Today, these companies are voicing intense opposition to proposed FCC regulations that would level the playing field for new competitors.
Meanwhile, Internet companies producing VoIP applications for the iPhone, including Skype, Vonage, and Google, are lobbying Congress and the FCC to adopt new regulatory measures, dubbed "Network Neutrality," which would allow any device and technology to be attached to phone and wireless networks.
In a recent speech, newly appointed FCC Chairman, Julius Genachowski, announced his intentions to impose so-called open Internet rules designed to prevent traditional network providers like AT&T or Comcast from deliberately blocking and slowing traffic, or content, including video and voice services.
Network providers argue that new rules would stifle their ability to manage traffic, which they say would lead to slower access for users. However, opposing forces point out that the threat of congestion is far from real given the prospect of cheap improvements to infrastructure and slower traffic growth rates in recent years.
Fairness and Competition
Given AOL's historic merger with Time Warner in 2000, and new rumors surfacing of a deal brewing between Comcast and NBC Universal, it may be ulterior motives that is actually compelling media giants to oppose new regulations.
Without oversight, their outlets could soon have the ability to serve up synergized content, prepared at the hands of their own media producers, delivered through their own broadband distribution systems, and perfectly capable of suppressing competition coming from the Internet.
To ensure that fairness thrives among these competitive forces within the telecommunications marketplace, the burden now rests on the government and, more specifically, the FCC to appropriately assess and regulate evolving interstate communications activities in the United States.
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