Big broadband companies are headed for a clash with Washington over whether consumers have a right to get as much as they want from the Internet, as fast as they want it, without paying extra for the privilege.
Complaints that cable titan Comcast Corp. is deliberately delaying some Internet traffic are prompting moves in Washington to block efforts by broadband providers to favor some kinds of Internet traffic over others.
Congressman Edward Markey (D., Mass.) last night introduced a bill that would change federal laws to make sure Internet traffic has protections similar to phone calls, which companies are required to connect without hesitation.
Together with Rep. Chip Pickering (R., Miss.), Mr. Markey is proposing the "Internet Freedom Preservation Act," which says it is the policy of the U.S. to "maintain the freedom to use for lawful purposes broadband telecommunications networks, including the Internet, without unreasonable interference from or discrimination by network operators." Essentially, the bill would give the Federal Communications Commission more authority to police Internet providers to make sure they're delivering traffic fairly.
Meanwhile, comments are due today at the FCC in the agency's investigation of complaints that Comcast is deliberately slowing some Internet traffic, as well as a broader look at what should be done about such complaints in the future.
The stepped-up efforts by regulators and lawmakers to enforce what tech-industry officials call "net neutrality" come as an explosion in downloading of online video is prompting cable and phone companies to rethink their Internet pricing models, opening the door for fee plans based on the extent of usage.
Time Warner Inc.'s Time-Warner Cable unit recently announced a trial of a capacity-based pricing plan in Texas. Consumers will pay more if they exceed caps for downloading movies and other high-capacity content. "It's not set up to be a punishment of people's responsible Internet usage," Time Warner spokesman Alex Dudley said. "This is an attempt to get the high-end users to think differently about how they consume their Internet usage."
Comcast, the No. 1 cable operator by number of subscribers, and Verizon Communications Inc. also refuse to eventually rule out adopting a similar capacity-based pricing model.
This type of pricing plan is a radical departure from current practice. Cable and phone companies in the U.S. have long adhered to plans that allow Web surfers unlimited downloading for a monthly flat fee. They typically charge higher rates for faster speeds of Internet service but consumers can generally download or upload as much content as they want.
Separately, AT&T Inc. plans to track pirated movies and other content across its network. While it is unclear how the company would execute the plans, consumers have feared it would block content.
In a statement AT&T said, "We want to set the record straight that we have not said we are going to filter, and in fact, there is no technology solution available at this time. What we have said is that we are working with some in the content industry on the very real issue of piracy that has raised costs for all Internet users."
While the heavy usage by music and video downloaders has prompted cable companies to consider different pricing plans in the past, the fear of attacks from advocates of maintaining neutral pricing and access has stopped companies from changing their policies.
Public interest groups worry Comcast's decision to delay Internet traffic from peer-to-peer file sharing networks such as BitTorrent is just the beginning. They want to prevent companies that offer both cable and Internet access from protecting their lucrative television franchises by preventing consumers from migrating to Internet video. Comcast says it has done nothing wrong and needs freedom to manage its Internet network to ensure the best service for its customers.
Regulators now face a challenge to set rules in a rapidly shifting market where changes in technology and consumer tastes are running faster than Washington's ability to react.
Cable and telephone companies say their networks are being overwhelmed by huge increases in video downloading. In December, a record 10 billion videos were viewed online, researcher comScore reported.
AT&T says consumer broadband traffic on its network has doubled in the last two years alone. And broadband customers are using 40% more bandwidth each year. Time Warner estimates that 5% of its users account for 50% of the bandwidth usage in many parts of its network. This small percentage of users is able to absorb so much bandwidth because of the rapid growth of peer-to-peer networking services such as BitTorrent, popular among video downloaders. One user downloaded the equivalent of 1,500 high-definition films in a month, the company says.
Use of BitTorrent is exploding. The software has been downloaded 160 million times, up from 80 million a year ago, according to Ashwin Navin, the president of BitTorrent. Managing this type of heavy network use is a particular problem for cable operators because their networks are shared by neighborhoods. That means if a consumer is downloading hours of high-definition video, subscribers living nearby could see their Internet speeds slow.
After investigations by the Associated Press and the Electronic Frontier Foundation last year showed Comcast was delaying, if not totally blocking, some peer-to-peer Internet traffic, the company admitted it sometimes delays traffic. In late January, the cable company quietly changed its terms of service to disclose that fact.
In comments filed at the FCC last night, the company denied it has violated the FCC's net-neutrality principles and said it is using "carefully limited measures" to manage Internet traffic.
Further, the company asked the agency to "make it clear that [the FCC] will not be drawn into second-guessing the reasonable network management decisions that engineers and service providers must make on a daily -- and sometimes hourly -- basis to respond to a dynamic and ever-changing Internet."
Mark Cooper, of the Consumer Federation of America, said he fears the explosion in video will give companies an excuse to engage in discriminatory behavior. "The testing has begun where they will push network discrimination as far as they can to see what they can get away with," he says.
Cox Communications also says it may put other types of traffic ahead of peer-to-peer traffic. "We reserve the right to manage traffic on our network but we don't get into the specific methodologies that we use," said David Grabert, director of media relations at Cox. "You have to manage traffic on the network and prioritize certain types of traffic -- like phone traffic -- over other types of traffic."
The FCC's ability to referee net-neutrality issues isn't clear, although it plans to hold a public hearing in Boston later this month to examine the issue. Three years ago, after consumers complained that a rural North Carolina phone and Internet provider was blocking Vonage Holdings Corp., a competing Internet-phone-service provider, the FCC launched an investigation. Within a month the company, Madison River Communications, had agreed to stop and forked over $15,000 to make the investigation go away.
Soon after, however, the FCC changed the rules and deregulated Internet lines, effectively giving itself less authority to regulate Internet services. The Comcast complaint has prompted the FCC and Congress to look at remedying that problem.