It was obvious from the initial leaks that net neutrality advocates would view the new FCC proposals as a sell-out. They're right. And yesterday FCC Chairman Tom Wheeler used a tone of denial in a statement that basically confirms the leaks.
The Commission hasn't had much luck with their net neutrality proposals so far. Even though the Appeals Court, in their last FCC smackdown, essentially wrote the Commission a set of instructions on how to proceed in the future, I get the sense that what the Commission wants right now is something that they can call a victory and that won't be in court until after the current administration is gone. So they wrote rules that they thought the ISPs would go along with. It's a politician's move, but I'm basically happy with it. I've never thought much of net neutrality.
It's still a common misconception that there's some official thing called the "Internet." What we call the Internet is a series of networks, generally private, connecting to each other and conforming to certain standards.
A long, long time ago when the Internet was young and few, if any had thought to make a profit off it, an unofficial system developed among the network providers who carried the traffic: You carry my traffic and I'll carry yours and we don't need money to change hands. This system has collapsed under modern realities.
The old system made sense when the amount of traffic each network was sending to the other was roughly equivalent. Today though, we have content providers like Netflix which send huge amounts of data over other people's networks and don't return the favor. How huge are these amounts? A study last year found that Netflix accounts for 31.6 percent of downstream Internet traffic on fixed networks (like Comcast's), far above the #2 site YouTube at 18.6 percent.
This is but one of the realities that make the naive dreams of net neutrality advocates illogical and unfair. Of course Netflix should pay network providers in order to get the huge amounts of bandwidth they require in order to reach their customers with sufficient quality.
Another myth of net neutrality is a conflict like that between Netflix and ISPs (most prominently Comcast) involves some sort of discrimination against content. It doesn't. ISPs have no interest in discriminating against particular forms of content. They do have an interest in managing their networks so that everyone has adequate performance, and therefore they need to be concerned with providers who send huge amounts of data, whatever the type of that data. Bandwidth isn't free.
So what do the new rules say? First, they say that ISPs can't block any legal content. This is really the core of the original theology of net neutrality and the reason it's so divorced from reality. The real-world examples of ISPs blocking content for other than legal reasons (e.g., child porn) are few and far between. The common example of Comcast and Bittorrent is nonsense; in that case Comcast temporarily blocked Bittorrent users who were hogging the local circuit, but quickly moved to a protocol-neutral system. Now they only throttle users who are consuming excessive bandwidth when the local circuit is at or near capacity and they don't pick on any particular application or protocol. They have no reason to do so.
It's in this paranoid environment that Netflix is expressing outrage at having to pay the costs of their business model. I'm not a Netflix subscriber, but they want me, as an ISP customer, to pay for ISP build-out for customers who are. Think about that next time you hear the ISPs are being unfair.
When they are generating such an extreme level of traffic, is it really "commercially unreasonable" to make them pay ISPs to build out the infrastructure needed to support it? It's not, which is why the second new FCC rule sets that as a standard for ISP actions that "harm the Internet." (The wording there is ridiculous and overwrought, and really ought to be "impose special costs on parties connecting to their networks." I think I'll make that comment to the FCC.)
The final rule, "[T]hat all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network..." seems reasonable enough and I'd be surprised if it generates any overt objection.
All that leaves is the one remaining objection ISPs might have to the new rules: Accepting them concedes jurisdiction to the FCC, something they haven't had to do so far. They might also be concerned that conceding jurisdiction subject to subjective terms like "commercially unreasonable" is too risky. But I don't expect this. I think the last appeals court decision was partly a message to both parties to find an acceptable (close enough to) middle ground. That's where we are.