Technology

Why Silicon Valley Giants Want Washington to Regulate the Wireless Internet


From the perspective of the federal government, the Internet that travels through tubes and the Internet that travels through the air have always been different beasts. The net neutrality rules that have been the center of heated debate for much of this year focus only on the wired kind—and now Silicon Valley’s biggest companies would like to change that.

The Internet Association, a trade group whose members include Google (GOOG), Facebook (FB), and Twitter (TWTR), filed a letter on Monday with the Federal Communication Commission arguing that the distinction between wireless and wired Internet has passed its usefulness.

Wireless Internet wasn’t included in the FCC’s 2010 Open Internet rules after federal officials determined that wireless networks should be given a regulatory break because they were both more novel and more prone to congestion than wired service. Later that year Google and Verizon (VZ) proposed Internet rules that made the same distinction.

The idea was that wireless Internet providers could experiment more freely, and that has started to happen. Earlier this year AT&T announced a sponsored data plan where content companies could pay for better access to customers, and last month T-Mobile (TMUS) said it wouldn’t count activity on some music services against customers’ data plans. These actions wouldn’t have been allowed under the old rules if wired Internet providers tried to do the same thing (although anything goes at the moment, as the FCC tries to come up with new rules).

The Internet Association wants the government to cut off such experiments in its new net neutrality rules. The FCC “should apply uniform non-discrimination, no-blocking, and transparency rules to wireline and wireless Internet access providers,” the group wrote in its letter. “There is no further reason to differentiate between the two platforms in applying the rules.”

This would be a significant expansion of net neutrality rules, especially given how much Internet activity is shifting from PCs to mobile phones. It’s likely to inspire some strong opposition. The Republican members of the FCC are opposed to any net neutrality rules, so they would surely oppose extending them into the wireless realm.

The Internet Association also said the FCC should be concerned about interconnection fees, payments from content companies to Internet providers for a direct connection to their networks. This is a separate issue from net neutrality, which governs what happens within a specific network.

Netflix (NFLX) has been loudly protesting interconnection fees for months, but has been largely on its own in this crusade. Some other companies that pay such fees wonder what the big deal is, and Netflix’s critics have said if this was really a problem, more people would be complaining about it. Last month the FCC decided to look into the issue and began collecting comments. No one seems willing to come out and say they’re against interconnection fees altogether: Most critics are asking for more transparency for deals that are largely negotiated directly and in private.

The Internet Association’s take is also rather mild. It says that Internet providers are in the position to use these fees as a choke point, and then use them to extract cash from its members. But it never says the fees amount to abuse in and of themselves.

Brustein is a writer for Businessweek.com in New York.

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