As expected, the FCC will propose new rules Thursday to regulate broadband internet under Title II, which would classify broadband as a public utility.
This is a big win for net neutrality advocates that believe Title II will ensure rich internet companies won’t be able to outspend potential competitors by paying for so-called “fast lanes” for prioritised access to customers. The theory goes that fast lanes would give established companies a monopoly on the internet and make it tough for a startup to come out with a better competition product or service.
In an op-ed on Wired, FCC chairman Tom Wheeler gave the perfect example why it’s so important to protect broadband under Title II.
He tells a story about NABU, a startup he was the president of in the 1980s. NABU created technology that was able to provide internet download speeds that were hundreds of times faster than dialup services like AOL.
But AOL ended up crushing NABU even though AOL had an inferior product. That’s because NABU ran its service through cable lines, while AOL ran its service through telephone lines. Telephone lines are regulated under Title II, so any and all traffic can flow freely through them. Cable lines were not, so NABU had trouble convincing cable providers to play nice.
Eventually NABU went broke and AOL went on to become wildly successful. (At least until cable providers started acting as ISPs too.)
It’s that kind of thing the FCC wants to avoid with its new proposal. By treating mobile and wired broadband like telephone lines, there’s a better chance startups with superior products will be able to succeed. It could potentially prevent another NABU from going out of business when it deserves to win.
Here’s part of the NABU story Wheeler told in Wired:
I personally learned the importance of open networks the hard way. In the mid-1980s I was president of a startup, NABU: The Home Computer Network. My company was using new technology to deliver high-speed data to home computers over cable television lines. Across town Steve Case was starting what became AOL. NABU was delivering service at the then-blazing speed of 1.5 megabits per second — hundreds of times faster than Case’s company. “We used to worry about you a lot,” Case told me years later.
But NABU went broke while AOL became very successful. Why that is highlights the fundamental problem with allowing networks to act as gatekeepers.
While delivering better service, NABU had to depend on cable television operators granting access to their systems. Steve Case was not only a brilliant entrepreneur, but he also had access to an unlimited number of customers nationwide who only had to attach a modem to their phone line to receive his service. The phone network was open whereas the cable networks were closed. End of story.
The phone network’s openness did not happen by accident, but by FCC rule. How we precisely deliver that kind of openness for America’s broadband networks has been the subject of a debate over the last several months.