The IP community has all agreed that managing access to the Internet needs to be regulated/managed by someone. In the US, we have a general acceptance that the role belongs to the FCC. The issue facing the FCC is determining what rules to apply to the Internet Service Providers (ISPs) that supports their need for controlling their networks and business goals, as well consumers’ demand for continued delivery of desired applications and services. The Application Service Providers (ASP) are somewhat caught in the middle, and it is unclear if the current suggested FCC rules will ferment continued growth of the ASPs.

The FCC originally established that ISPs had to treat all traffic the same. This created many complaints from the ISPs, but the ASPs and consumer groups were supportive. When the Judicial Branch threw out those rules, the FCC was at a loss. The current solution is awkward, at best. It is colloquially described as allowing the ISPs to offer two levels of service and let consumers decide which to purchase: faster access or slower access. This is consistent with most commercial offerings of good, better, best.

The Notice of Proposed Rulemaking (NPRM) is expected to submit the following:

• That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
• That no legal content may be blocked; and
• That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity

Any throttling of services and traffic must be disclosed to the purchaser of the service. ISPs cannot independently decide not to support the delivery applications or services. And the ISP must move forward with pricing and definition of services where the Internet marketplace is not materially harmed. As such, these rules will be very difficult to enforce and lack enough specificity for an objective observer to know in advance what conduct is acceptable or unacceptable.

As a provider of Internet access, VoIP and Hosted Unified Communications, ANPI maintains an active interest in the both the process and the result of the FCC’s ultimate set of rules. The current environment has already enabled Comcast to determine it was appropriate to charge Netflix – a content provider – for faster, more reliable delivery of its product to subscribers of its service. Netflix has followed this by entering into a similar agreement with Verizon. These agreements are driven, in part, because of the volume of traffic Netflix generates, which is estimated at nearly 30% of all Internet traffic during peak usage. Subscriber fees have been increased as a result of these agreements, causing some consumer protection groups and politicians to express concern.

While Netflix can afford to make these deals to protect and grow its business, I and others wonder what happens with new entrants with little to no capital or customer base. The Internet is commercially harmed if the rules impede or slow innovation and the entrepreneurial spirit. While many would prefer the earlier egalitarian Internet that was information driven, it is today an infrastructure that supports billions of dollars of commercial business. It does need to evolve, and Chairman Wheeler must support this evolution, balancing the priorities of the ISPs against that of business, innovators, entrepreneurs and consumers.