Friday, April 7, 2017

Changes in U.S. Net Neutrality Coming

As expected, the new chairman of the U.S. Federal Communications Commission will roll back or modify some elements of the current network neutrality rules, while shifting some enforcement to the Federal Trade Commission, while retaining the original sense of the “Internet freedoms” principles of earlier rules that emphasized the right to use all lawful apps, without blocking.

Among the bigger issues is the notion that network neutrality requires mandatory “best effort only” service for consumer users, without any allowances for quality of service mechanisms.

What is not clear is whether the present complete ban on paid prioritization (“fast lanes”) will be changed, however. It is possible, perhaps even likely, that internet service providers will be barred from providing quality of service mechanisms only for their owned services or apps. But QoS might well be allowed if all app providers can have the same QoS applied to their services as well.

The big issue is whether such entities have to pay for such features. Some of the larger ISPs maintain any app provider--including themselves--can use QoS features under the same terms and conditions any ISP applies to itself.

Most likely, the new rules to be made public in a few months, will roll back the regulation of internet access as a common carrier service until Title II of the Communications Act.

All such changes in regulatory framework can change business models, or potential business models, for the regulated actors. Ending common carrier regulation can, in principle, lead to more changes in prices, terms and conditions, at a faster pace.

As always, the degree of competition in the market will shape the direction of any such changes, and the amount of consumer welfare that might result.

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