Is the Internet a Public Utility?



Is the Internet a public utility? And what would happen if federal tech regulators classified it as one? Those are the questions at the heart of debate over net neutrality—the concept that all information that travels over the Internet should be given equal access and equal priority.

Today, those questions are playing out in the ongoing fight over the Federal Communications Commission's (FCC) proposed Internet traffic rules. The agency is holding a vote today on a new, not-yet-public proposal from agency chairman Tom Wheeler that would require Internet service providers (ISPs) to offer a baseline level of service to everyone, but would also allow for the creation of some paid prioritization deals, subject to review by the FCC. The proposal has sparked opposition amongst tech activists who want the agency to consider tougher rules, and a far more consequential change to the way the Internet is regulated: They want the Internet to be reclassified under the FCC's regulatory guidelines from its current position as a Title I "information service" to a Title II "telecommunication service"—essentially, a public utility.

Wheeler's proposal doesn't take that approach, but according to The Wall Street Journal, the chairman is expected to "bring it up as an alternative to his plan." Initially, Wheeler, who spent years working as a telecom executive, was wary of even broaching the subject, but the response to his net neutrality proposal—or at least, to what's been reported about the still-not-publicly available rules—was strong enough that he's apparently decided to allow some discussion of reclassification.

Reclassification of the Internet as a utility isn't the primary proposal at today's FCC meeting—but it is up for discussion.

So it's worth thinking a little bit about what might happen if the agency did pursue reclassification.

Supporters of the change say they want an equal access Internet, one that preserves the little guy–friendly ethos that has defined the first few decades of the Internet's growth—and prohibits anyone from being put in a slow lane.

But the Internet has never really been as equal as the activists suggest. As a National Journal report noted earlier this week, big content providers with big data transmission needs have always wrangled service deals with big Internet carriers; billions of dollars are already tied up in these sorts of bargains. Not only have these deals not ruined the Internet experience for the average person, they've enhanced it, allowing traffic-intensive services like streaming video sites to purchase enhanced capabilities. Those deals have made it possible for startups to handle massive traffic spikes without crashing. And the money involved has helped expand, upgrade, and maintain the Internet's permanent infrastructure overall.

Under Title II, some of that money would probably go away. And so would the infrastructure improvements that go with it. A group of large ISPs wrote to the FCC this week to warn that, if the agency moves forward with reclassification, they would spend less money to build out their networks. This is the industry's position, so some skepticism is in order. But it's not an entirely crazy notion. Transform the Internet into quasi-public infrastructure, and it's likely to start taking on, at least to some degree, a few of the characteristics of public infrastructure—which, I think it's safe to say, is not known for its propensity toward innovation and upgrades.

Besides, it's not even clear that reclassification would prohibit the sort of prioritization deals that net neutrality activists say they want to avoid. ISPs are arguing that Title II doesn't prevent fast-lane deals—it simply enforces a standard that prioritization deals not be "unjust" or "unreasonable," which is basically what Wheeler was already proposing.

It's also worth remembering that this isn't the first time the FCC has considered the issue.

Back in 1998, under President Bill Clinton, the agency submitted a report to Congress concluding that, for multiple reasons, Internet access was "appropriately classed" as an information service under Title I. One of the points the report made was that the Internet is more than just a dumb-pipe for carrying information. Yes, it involves data transport, "but the provision of Internet access service crucially involves information-processing elements as well; it offers end users information-service capabilities inextricably intertwined with data transport." In other words, it simply doesn't make sense to classify Internet access as a utility because the service involves than mindlessly moving packets of information from one place to another. And reclassification, the report warns, would result in "negative policy consequences"—specifically, it could have "significant consequences for the global development of the Internet."

Over the last 16 years, that approach has given us the rapidly growing, innovative Internet we have today. The problem now is that the Internet has done so well that net neutrality activists want to turn it into something that looks more like a public utility, essentially freezing the Internet in place. In other words, they want to hold on to the Internet of today, at the expense of the growing, innovative Internet of tomorrow.