San Francisco: Let's say President Barack Obama gets his way and high-speed Internet service providers are governed by the same U.S. regulations imposed on telephone companies 80 years ago.
Depending on whom you listen to, the rules could unleash future innovation and create jobs—or stifle innovation and kill jobs. The divisive and often confusing debate has intensified now that Obama has entered the fray.
Obama's stance is meant to protect “net neutrality,” the concept that everyone with an Internet connection should have equal access to all legal content online. The idea served as one of the Internet's building blocks, but its fate has been in limbo since January, when a court ruling invalidated Federal Communications Commission guidelines designed to treat all online traffic equally.
The FCC has already been working on a new regulatory framework and is under no legal obligation to heed Obama's call. Nevertheless, Obama's opinion turns up the political heat on FCC Chairman Tom Wheeler and the four other commissioners who will make the final decision. The FCC isn't under a deadline to make a decision.
THE ARGUMENT FOR REGULATING INTERNET SERVICE PROVIDERS AS UTILITIES
Obama believes the adoption of these Depression-era rules are the best way to preserve a “free and open” Internet that gives everyone in the U.S. the same access to any website hosting legal content, including video, music, photos, social networks, email, and maps.
Adopting these rules would empower the U.S. government to prevent powerful online service providers such as Comcast, Verizon and Time Warner Cable from controlling Internet traffic in a way that suits their own financial interests.
This premise assumes the service providers, if left unchecked, will create a two-tier system that funnels Internet traffic into fast and slow lanes. Only the richest companies will be able to pay the extra tolls to ensure their online content is accessible through these fast lanes, according to this hypothesis.
“It is historically important that the Internet enhances freedom for all rather than profit for a few,” says Ed Black, president of the Computer & Communications Industry Association, a trade group that represents many technology companies, including Internet search leader Google Inc. and social networking leader Facebook Inc.
And major cable-TV providers that also sell high-speed Internet service might be able to diminish the quality of service to Internet-only video services such as Netflix and Hulu that might lure away their customers.
Netflix Inc., which boasts 37 million U.S. subscribers, is leading the charge to regulate Internet service providers like utilities.
If net neutrality's principles hadn't been in effect for the past 20 years, proponents contend entrepreneurs would have been discouraged from developing a wide range of online services that have created millions of jobs and billions of dollars in wealth. Preserving net neutrality will put more people to work and enrich more investors under this theory.
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