The Internet may never be the same again.

The Federal Communications Commission (FCC) (, the independent United States government agency in charge of regulating interstate and international communications by radio, television, wire, satellite and cable, on Tuesday voted to approve and adopt formal rules to regulating Internet traffic for the first time ever since the inception of the Net.  The rules are expected to get into effect early next year.

Today’s vote is the culmination of several years’ worth of debate on Net Neutrality but is hardly going to be the end of the issue. The rulings seem to have made all the key stakeholders of the debate uniformly unhappy (which some are arguing is a sign that a fair compromise has indeed been arrived at), and the regulations can be expected to be challenged at court. The Republicans have also said that they will challenge the rules in Congress. Additionally, there is some concern that the FCC may not have the legal authority to enforce the new regulations in the first place.

What did the FCC decide today?

Under the new regulations, in one of the most controversial of the rulings, the Internet we get from our mobile devices (or wireless Internet) may not be the same anymore as the Internet we get from our personal computers (or the wired Internet). The FCC makes a clear distinction between wired and wireless service providers, giving wireless providers greater leeway in how they manage their networks. According to the FCC Chairman Julius Genachowski, there are significant differences between the two. He cites among other things, “unique technical issues involving spectrum and mobile networks, the stage and rate of innovation in mobile broadband; and market structure." Thus the ruling.

Other tenets of the new regulation prohibit Internet providers from blocking certain Internet traffic, and require them to be transparent about their network management practices. The regulations also require that network management and packet discrimination be ‘reasonable,’ but that only applies to wireline broadband. Prioritized traffic at a higher fee is not explicitly forbidden, merely implicitly discouraged, and goes against what the FCC thinks may be ‘reasonable’.

Let’s take a quick look at some of the implications.

1] Wireless providers are prohibited from blocking "consumers from accessing lawful websites." They are also barred from blocking applications that compete with their voice or video telephony services. This translates into being able to use VoIP services like Skype or Google Chat from tablet devices or smart phones. This could, however, also mean that wireless providers can filter some content (some apps, for example) even though they may not be able to block basic Websites or apps that compete with their own voice or video offerings.

2] The regulations do not forbid service providers from switching to a metered payment model of the broadband, based on bandwidth usage. ISPs can also charge users more for faster service or a better quality of service (QoS).

3] It is not immediately apparent if ISPs could offer varying speeds for different types of content, as long as they did so uniformly for similar content. This means, theoretically, we could have slower speeds for video sites, for example.

4] It is also not immediately apparent how paid prioritization will play out. This means, theoretically, content providers can pay ISPs a certain amount of money for priority service and a faster lane of delivery. However, this goes against the very nature of the Internet, which is democratic, and levels the playing field between users of all kinds. If companies can pay more money to be more visible, they can be expected to; and startups, bloggers and SMBs without similar purchasing power will suffer a significant setback.

The situation today

The FCC's three Democratic members voted in favor of the regulation, which was introduced more than a year ago by FCC Chairman Julius Genachowski, an Obama appointee. The agency's two Republican members voted against the rules.

U.S. President Barack Obama supported the FCC decision in a statement saying that its decision will help preserve the free and open nature of the Internet, while encouraging innovation, protecting consumer choice, and defending free speech. Obama added that the Federal  government will be keeping an eye on future developments. “As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact.”

What is Net Neutrality and what the debate is all about

We can think of Network Neutrality or Net Neutrality as the principle that all Internet traffic should be treated equally.  It is the status quo of how we access the Internet today.      

The challenge is, all Internet traffic is not really equal.  Say there are two users A and B, who pay a Internet Service Provider (ISP) the same fees for similar levels of access to the Internet.  However, A downloads videos and large graphic files all the time, while B sends the occasional email and surfs once in a while. Or think about a situation where Web conferencing is used to conduct an open heart surgery in a remote location.  Should that traffic be the same as a teenager watching movies on say YouTube?

So far internet service providers, both wired and wireless, have been acting as open pipelines or a free highway to the Internet.  What the ISP’s have been wanting to do is act as a filter or a toll booth. They argue it makes more business sense for them to either charge heavy bandwidth users more, or offer them reduced speeds and /or a different quality of service (QoS).

Companies like Google, eBay, or Amazon are understandably pro- Net Neutrality, as they provide content to the users, often bandwidth-intensive content; and stand to lose if content packets starts getting discriminated against.

Net Neutrality was not as significant an issue in the Web 1.0 ecosystem; but as more and more users collaborate online, and more and more websites offer graphic-rich content and videos, bandwidth and network speed get affected. It costs service providers more bandwidth to provide access to someone who is uploading or downloading a lot of videos, for example, but they get paid at the same rate for access.

Comcast blocked usage of some P2P (peer to peer networks) around 2007, as they argued that these services were draining bandwidth. FCC ordered Comcast to stop. There was a huge uproar against Comcast, and the company went ahead and started providing access to the unblocked sites, paying some $16 million in lawsuits in the process. However,  earlier this year, a U.S court ruled that the FCC did not have the authority to legally censure Comcast.  And thus the battle continues.

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