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The Wall Street Journal and The New York Times are reporting that the F.C.C. is “shifting” its net neutrality policy to accommodate both (and sometimes in the same company) communication carriers and content providers.  (Comcast would be in the “same company” category, since they own NBC Universal, and are currently attempting to acquire Time Warner.  These facts are important to the issue at stake.)

What does this “shift” mean?  Or portend?  It means, at the very least, that the lobby power of both communications and content providers, huge K Street players, has been successful.  Does it portend the end of all other freedom, citizen communication and individual creativity on the internet?  In my view, not necessarily, although overbearing influence, power and presence are factors citizenship groups will and should keep their eye on for us.

Why am I not joining the Chicken Little chorus?  A couple of the big boy business model axioms are reasonable given the U.S. marketplace.   Consumers want content on the internet.  Communications companies want the cash to make it technically feasible.  Having already soaked consumers for broadband to a saturation point – proportionally, consumers in the U.S. pay more than almost any other country – they look to the big guys to pay for the costs.  Content companies want “faster lanes” to deliver content, enough so that they are willing to pay extra for it.  That makes sense.

Moreover, if this business model rings true enough – remember, I qualified my statements at the start with the recognition that we are within “the U.S. marketplace,” which lacks the regulatory authority and power of, say, Europe – then it would seem that one of the principal concerns of consumer watch groups might be rethought.  The net neutrality argument, to some degree, relies on a zero-sum assumption: there is only so much bandwidth available, and so discrimination of content should not be allowed to consume it.  If I understand the business model proposal behind this shift, that assumption must now take into account that more funds will increase that bandwidth, providing “fast lanes” for content corporate interests.  The remaining bandwidth should operate still with the net neutrality principles intact.  This theory is a terrible simplification, but I think its essence is what supports Commissioner Wheeler’s defense of the shift as still being consistent with the concept of net neutrality.

Of course, consumers must watch out.  No doubt we will be asked to absorb the costs that content owners will pay to communications companies for those “fast lanes.” Competition is critical in this calculus, which is why Netflix is opposing the Comcast takeover of Time Warner.  Competition for content will drive down the costs; vertical integration will drive them up.  Reed Hastings, who used to be an F.C.C. commissioner and is now the president of Netflix, knows that from the inside out.  Let’s hope that the F.C.C. and the Department of Justice see his point. 

Legal beagles will appreciate that the Verizon and Comcast cases, both of which the F.C.C. lost, plays a role in this “shift.”  In short, the F.C.C. does not have much of a legal leg to stand on to make rules that have any force.  Therefore, Commissioner Wheeler is operating with a tremendous handicap.  I will continue to read Susan Crawford, who is sure to get another NYT Op-Ed out of this recent shift, for advice about how and in what legal ways the F.C.C. may want at some point to go back to Congress to get its “information” and “news” service Brand X categorization sorted out so that it can actually regulate.  At this time it can only navigate around the edges of its confined authority.  If the watchdog consumer groups want to make a real impact, they should go back to fundamentals of this legal shell game, propose a revision that makes solid consumer sense, educate the public about it, and get Congress to act accordingly.

In the meantime, the reigning reason for this analysis: where is higher education in this mix?  Co-founders with the U.S. Department of Defense of the Internet and in need of staying a primarily player in this game to serve its missions, higher education would appear to be nowhere in sight.  That is an enormous mistake.  To date, the language of “net neutrality” has by and large served higher education missions, keeping the playing field level enough for it to operate.  Whatever the outcome of this shift for consumers, salutary or deleterious, it does signal that the times are a-changing.  If higher education does not get into the game in full strength, I worry about its ability to have an impact later on, when the big boys settle down to smoke their cigars over cognac.  By then, it will be too late.

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