Broken by the Wall Street Journal, in a disappointing turn around from their previous position on protecting fair pricing and net neutrality, the FCC will be proposing new rules allowing internet carriers to negotiate individual rates with content providers for a guaranteed “high speed lane”.
This means a company like Netflix will have to undergo distinct negotiations with TimeWarner, Verizon FiOS, Comcast, and every other ISP, to pay additional rates for bandwidth and to reduce the threat of their service getting throttled.
ISP’s can also negotiate separate rates for different services, meaning they can be the gate keepers. They can decide which services will be successful on their networks. If they choose, blocking certain services from competing.
Say Comcast wants to promote their own video-on-demand service, why not quadruple the rate Netflix pays for a consistent data stream? If Netflix doesn’t pay it, you can throttle the service which will upset their customers. If they do pay it, chances are pretty good they’ll eventually have to pass those costs down to their customers also upsetting them. It’s a win win for nobody except the ISPs.
This could also have a chilling effect on innovation, as any successful start up which requires any consistent bandwidth will likely be priced out of the market before they have a chance to actually build a fan base.
The proposal was drafted by FCC chairman Tom Wheeler, and will be distributed to the four other FCC commissioners Thursday where it can be amended. After the amending process it will be up for a final vote on May 15th.
For those interested, here’s where you can find contact information for the members of the FCC.
