Battle lines: Neutrality, Rights Auctions

Journalism about regulatory and commercial disputes often looks to conflict related analogies. It is, more often than not, an over-reach given the real armed conflicts that inhabit the world just now. But, given the vehemence of the protagonists, and the potential consequences of different outcomes, you can certainly see why it happens.

Vehemence is the middle name of the Net Neutrality debate and it has shifted up several gears as FCC Chair Tom Wheeler has declared his hand and proposed Title II status for fixed and mobile broadband Internet. So, ISPs – telcos, cable cos, others, will not be able to charge content providers for better, faster delivery. In other words no fast lanes, and no slow lanes, on the Internet.

Wheeler and his supporters, who include the President of the United States, believe this federal level of regulation – essentially classing the Internet a utility to which equality of access is required – is necessary in order that innovator start-ups have the same playing field as established players. Their supporters include all those that currently provide content OTT and have business models that benefit greatly from a ‘free’ – to them – delivery service that helped them rapidly establish multi-billion dollar corporations.

Opponents – the ISPs, telcos, cable cos and others, who build the networks say this is an unfair deal for them as their networks get clogged with all this (video) traffic and their end customers – subscribers to their broadband service – get a poorer service and blame them for it. But if they can’t pass on costs to the content providers then there will be no incentive to invest in the networks and everyone, including the content providers and their subscribers will suffer.

There are strong arguments and no shortage of true believers on both sides many of whom seem determined to turn the issue into a latter day crusade. My guess is that given the level of opposition he was bound to face, Wheeler decided he couldn’t start anywhere except by enshrining first principle –no fast lanes – in the simplest way possible and that’s Title II. Given his earlier indications that he would more flexible than this, it is probably an indication that his opponents overplayed their hand. But given his earlier thoughts that ISPs could do commercial ‘QoS’ deals so long as they passed thresholds of reasonableness, it seems there may be much room for compromise on all but the most hallowed ground. Indeed, right along with announcing Title II, Wheeler stated there will be “no rate regulation, no tariffs, no last-mile unbundling.”

Needless to say, the Republican opponents of Net Neutrality have gone nuts (if that’s not an oxymoron given their starting position) and are churning out legislation to strike down the FCC and, doubtless, impeach the President who they say has somehow hypnotised Wheeler with his support of Neutrality. This one will run and run.

The notion of battle lines was also well used in the reporting of the build up to the bids for English Premier League rights. With Discovery and the inflationary presence of Qatar (via beIN) said to be joining the fray, the price was only going up. One analyst even predicted that one bidder with the extra motivation of seeing this as a last chance to fell, or at least slow, a rival will deliver a crazy ‘death strike’ bid to win more rights – or, more to the point, deny them to another. That was certainly hyperbole; no killer bids, in fact not much change – except the Premier League picked up over £5 billion, a 70 per cent increase.

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