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Opinion: An Internet open to all Americans

By Anna-Maria Kovacs, Ph.D., CFA
Federal Communications Commission (FCC) Chairman Tom Wheeler testifies during a House Energy and Commerce Communications and Technology Subcommittee hearing on oversight of the FCC, on Capitol Hill in Washington, D.C. on May 20, 2014. File photo by Kevin Dietsch/UPI
Federal Communications Commission (FCC) Chairman Tom Wheeler testifies during a House Energy and Commerce Communications and Technology Subcommittee hearing on oversight of the FCC, on Capitol Hill in Washington, D.C. on May 20, 2014. File photo by Kevin Dietsch/UPI | License Photo

WASHINGTON, Feb. 26 (UPI) -- An open Internet is a goal for all Americans, but it must be achieved via means that don't favor the most technophile one percent of Americans at the expense of the rest. The order the Federal Communications Commission is contemplating could do exactly that.

Thursday, the FCC will vote to approve its open-Internet Order based on Title II of the Telecommunications Act of 1996. Both Chairman Tom Wheeler and Commissioner Ajit Pai have issued press releases and fact sheets detailing the draft order that is circulating pending the vote. It is an order that pro-regulation activists and their lawyers will love, but for vulnerable consumers and small businesses, it could be painful.

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For one thing, according to Pai, the draft order circulated on February 5th favors unlimited all-you-can-eat data plans and discourages usage-based pricing as well as sponsored-data plans. Were the final order to take that approach, low-priced plans that provide an entry point for the poor would vanish. Consumers who make less use of the Internet would be forced to subsidize those who use it heavily. Sandvine's midyear 2014 data showed that the top one percent of Internet users consume nearly twice as much traffic in total as the bottom fifty percent of users consume in total. Pew Research, Nielsen and others have shown that it is elders and the poor who are least apt to use the Internet. They should not be forced to subsidize the one percent.

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But the harm to consumers would not necessarily be limited to pricing. In 2005, the Supreme Court affirmed the FCC's prior decision that broadband Internet access (BIA), as currently offered, is an information service that is not subject to Title II of the Communications Act. If the FCC decides to improve its chances of victory by forcing the BIA providers to radically change the service they offer to make it fit Title II's requirements, the service would become much more difficult for non-geeks to use. Specifically, BIA providers would have to sever the transmission from the other services with which it is currently integrated.

One real-world implication of such a legal maneuver would be that vulnerable consumers who already find Internet access confusing might suddenly find themselves responsible for their own DNS-lookup (website address) and cybersecurity, as well as searching for new sources of email, web-browsing, and other functions currently integrated for them by their BIAs. Yes, all these are available from various sources on the web as numerous Title II fans pointed out in the FCC's docket. But perhaps before filing those comments they should have asked their grandparents whether they want to take on the job of vetting those sources for security and reliability. One thing the FCC can count on if it implements such unbundling of services is the fury of millions of seniors and other vulnerable consumers who would suddenly find their Internet access more expensive, more difficult, and less secure.

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The Chairman's fact sheet also indicates that, to further improve its prospects in court, the FCC will force BIA providers to offer a new service to edge providers that the FCC will also declare to be a telecommunications service. The service appears to consist of the completion of the edge provider's response to a query from an end user. For example, a BIA subscriber might request a movie from a website. The website's server sends the movie, and the BIA delivers it to the end user. The delivery of that response from the website would be considered a service offered by the BIA to the website, separate from the BIA's service to its own subscriber. Currently, the end-user's payment to the BIA covers the cost for both the end user and responding website, but the new legal approach is likely to change that.

Any telecommunications service must, according to the Telecommunications Act of 1996, be offered for a fee. Since the response of the website is being unbundled from the query by the end user, the FCC can't expect to be sustained in court if it tries to argue that end users are paying for both services. Thus, the FCC would have to insist on payment by website owners for the service they receive from any of thousands of BIAs with whom they have no established relationship. The payment would, of course, create a new cost for website owners like Senator Leahy's favorite, the Vermont Country Store, and even smaller businesses, a new cost that would provide them with no new benefit whatsoever.

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Before the FCC votes order, its commissioners must take the time to think about the real-world consequences of the legal strategies they pursue. While the pro-regulatory activists have been the vocal participants in this proceeding, they are not the only ones who will be affected by it. Driving vulnerable Americans off the Internet and small businesses out of business is not a legacy any of the FCC's commissioners would welcome. The open Internet must serve all Americans. ________________________________________________________________________________ Anna-Maria Kovacs is a Visiting Senior Policy Scholar at Georgetown University's Center for Business and Public Policy. She has covered the communications industry for more than three decades as a financial analyst and consultant.

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