Mark Del Bianco

Maybe this FCC does get it. First, the FCC announced at its last open meeting that it was starting inquiries into various facets of the mobile phone industry.  Now the rumors are flying that on Monday FCC Chairman Genachowski will outline a new approach to network neutrality that will codify the existing “four Internet freedoms” and add a fifth principle – non-discrimination (apparently bounded by reasonable network management practices).  More importantly, he is expected to announce that for the first time the FCC will apply the concepts to wireless networks.

For now, the combination of FCC developments seems like a good springboard to begin a dialogue about something I’ve been thinking about for many years - how much net neutrality regulation do we want or need? And can someone please come up with a better shorthand than “net neutrality”?

It may be heretical in some quarters, but I’m not sure we need much broad net neutrality regulation. To muddle the old CBS Records sales pitch, wireless is the only band that matters in the net neutrality clash. Don’t be confused. The debate is not about big pipes for big businesses – large customers will get the big, dumb pipes they want and need.  The net neutrality fight is about the consumer-SOHO-SMB customer segment (“CSS” for short).

CSS is going wireless.  You can see it in the data (pun intended) – whether it’s the startling growth of households dumping their landlines, the growth of netbook sales or Verizon’s CEO announcing that he’s not worried about staggering landline losses because VZ is a video company.

So the key issue in the short and medium term is whether broadband wireless is an open platform.  If it is, the wireline telcos and the cable companies will have to keep their fiber/DSL/cable platforms open in any geographic areas where they compete.  A good example is Montgomery County, Maryland, where I live and work.  Most of the county has at least four competing broadband providers (and at least three different technologies – cable, DSL, and 3G wireless (both Sprint/Verizon EVDO and AT&T ), plus a large smattering of Verizon FIOS). If the 3G wireless networks (and the Clearwire 4G network that is supposed to be in operation here by the middle of next year) are open, it will be impossible for the cable/telco wireline providers to compete unless their networks, too, are open. Openness is contagious, spreading like Ice Nine in Kurt Vonnegut’s Cat’s Cradle. As a political matter, the chances are zero that regulators or politicians are going to allow broadband providers to provide open networks in competitive areas such as Montgomery County, but to close those networks and limit CSS choice in rural or less affluent areas that have only one or two broadband options.

So what does that mean? Don’t be surprised if in this area the FCC borrows from some of the concepts in the bestseller “Nudge,” whose co-author Cass Sunstein is the OMB regulator overseeing, among other things, new FCC regulations.  If I’m an FCC regulator constrained by the Brand X and other Martin-era deregulatory decisions on cable and telco broadband, I wouldn’t be looking to pick a fight with the D.C. Circuit by immediately revisiting those decisions.  I’d be looking to focus on wireless and on relatively short term goals. Announce that the five freedoms apply to wireless and wireline networks alike. Start a lengthy rulemaking to determine what reasonable network management is on a wireless network.  Work with the FTC to put strict disclosure rules in place ASAP requiring wireless and wireline carriers alike to make public disclosure of their real (not theoretical maximum) upload and download speeds, their monthly usage caps and overage charges, and their application blocking and degrading practices. Wait a couple years and see what happens. Most of these steps take years and are virtually appeal-proof, even before the D.C. Circuit.  Delay is now the friend of net neutrality proponents.