Arizona firms cautious about what gets caught in net neutrality rules

Screen Shot 2015-02-27 at 9.57.55 AMBy Kristen Hwang | Cronkite News

Related: What happens when the Internet goes out? This Arizona town found out
What The FCC’s Net Neutrality Ruling Means For You

Arizona technology companies and rural broadband providers expressed concerns about the Internet regulations approved Thursday by the Federal Communications Commission – partly because they don’t have all the details, which makes the ultimate impact unclear.

The FCC has yet to release the 317-page plan it adopted in a 3-2 vote to ensure “net neutrality.” The rule reclassifies broadband and wireless carriers as telecommunications services, making them subject to the same regulatory review that public utilities undergo.

“The short term impact is going to be a lot of uncertainty, and there’s nothing that businesses hate more than uncertainty,” said Steve Zylstra, president of the Arizona Technology Council.

But FCC Chairman Tom Wheeler said the vote marked a “red-letter day for Internet freedom,” because the agency will now be able to prevent Internet service providers from blocking lawful content and from throttling the speed at which content is provided by creating paid “fast lanes.”

Net neutrality is a principle almost everyone can get behind – that all data on the Internet should be treated equally and should not be prioritized based on a consumer’s ability to pay more.

“By ensuring the entire Internet is open in an equal manner, innovators will be able to offer diverse political and cultural information without restriction,” said Diane Brown, executive director of the Arizona Public Interest Research Group. She hailed the vote as a “tremendous victory.”

Despite the claim that the new rules will protect small businesses and technology startups, Zylstra said the FCC’s strategy for ensuring net neutrality is flawed.

“There’s a whole other hierarchy of regulations that exist that would now be heaped upon the Internet. Our position is if it ain’t broke, don’t fix it,” he said.

Zylstra said the Arizona Technology Council supports a “fair and open” Internet, but believes the FCC’s ability to regulate Internet service providers will result in higher costs.

“There’s going to be added regulatory burden, and that always means a higher cost, and ultimately that means higher costs for everybody who is involved in the industry,” he said.

The technology council’s concerns were echoed by the two Republican commissioners at the FCC, but Wheeler said the new rules are “no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech.”

“The Internet is the ultimate vehicle for free expression,” Wheeler said minutes before Thursday’s vote. “The Internet is simply too important to allow broadband providers to be the ones making the rules.”

Supporters such as Rep. Raul Grijalva, D-Tucson, agreed, saying the rules will help keep “a handful of powerful companies from controlling how Americans access the Web.”

Wheeler said the majority of the more than 4 million comments the FCC got on the proposed rules were supportive.

But smaller Internet service providers – those who typically bring broadband access to rural areas – have different concerns, which the new rules may not address, said Michael Romano, senior vice president of policy at the National Telephone Cooperative Association.

“Our members don’t have any incentive or ability, frankly, to engage in anything that would preclude or undermine net neutrality,” Romano said. “If our guys try to shut off Netflix or throttle Netflix, Netflix would basically say, ‘Treat me fairly, and let me know when your customers complain.’”

Romano said that while the FCC’s plan addresses the relationship between Internet service providers and content providers, it doesn’t resolve fair pricing issues between data-transport companies and smaller Internet service providers.

His association represents small telecommunications companies that provide service to rural America, including 3,000 rural consumers in Arizona.

The cost of transporting data to rural areas is high, and without regulation, transport companies can still charge high fees to small providers that are then spread out among relatively few customers, Romano said.

Until the FCC publishes the new plan, Romano said his association is uncertain about what exactly will change and fearful the FCC may have overstepped its authority in some places. But Romano also said the new plan could provide “useful building blocks” for addressing other issues related to net neutrality.

“You see everybody say, ‘I’m for net neutrality,’ because that’s an American mom-and-apple-pie concept. I don’t think anyone refutes that is a desirable goal,” Romano said.

“It’s the means of getting there and how you ensure people live up to that, that’s really where the debate falls,” he said.


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February 2015