The third in a four-part series on the Federal Communication Commission’s six net neutrality principles:
During a recent webcast from the Brookings Institute, Federal Communications Commission (FCC) Chairman Julius Genachowski explained six principles of net neutrality and proposed making them official rules. Let’s take a closer look at proposed rules three and four, which focus on devices and competition.
No. 3: As long as they don’t damage the network, consumers can connect any legal devices of their choosing.
If you follow the wide-ranging discussion on devices, you’ll find there’s a lot of overlap. The third principle would seem to relate only to third-party devices like Sling Media’s Slingbox (a TV and video streaming device that is blocked on some 3G networks), but many industry executives involved in the net neutrality debate are also chiming in on what devices are used to connect directly to broadband networks.
We’ve seen the obvious example at work – a cell phone. But when considering the phrase “any legal device of their choosing,” the FCC’s third principle includes any non-phone device that contain Wi-Fi modules, such as Apple’s iPod Touch, Microsoft’s ZuneHD and Blu-Ray players that offer integrated Netflix streaming. Internet radio devices, web-connected home security systems and cameras with integrated wireless connectivity should be considered as well.
With all these devices in play, the net neutrality issue quickly becomes handset exclusivity – a practice where wireless carriers make exclusive deals with device manufacturers. Two examples at work currently include Google’s partnership with Verizon Wireless and Apple’s partnership with AT&T.
Both the FCC and Congress have spent some time looking into wireless handset exclusivity arrangements, especially as it plays into the FCC’s fourth net neutrality principle:
No. 4: Consumers have a right to competition.
The FCC’s fourth principle would ensure customers have the right to competition across the Internet spectrum, not simply in terms of choosing a service provider.
Net neutrality advocates claim there is a necessity to regulate the infrastructure and prohibit private enterprise from implementing methods to alter or promote one entity over another.
A worst-case scenario would be if a service provider would favor information from Microsoft over Google by purposely slowing Goggle’s content delivery to create a competitive disadvantage. Another would be a wireless carrier making enough exclusive deals with equipment manufacturers to effective eliminate smaller competitors and force consumers to choose between device or service.
An Internet stranglehold by a handful of organizations could also limit across-the-board innovation. Consider AT&T’s public statement that real-time gaming is an “aspirational service” and not a core broadband application. It’s an interesting statement, considering a Harvard Business School study on the video game industry demonstrated that innovative devices, ubiquitous broadband access, improved games and increased reach led to U.S. sales of software, hardware and accessories reaching $18.9 billion in 2007, an almost 40 percent growth over 2006. The Nintendo DS, a handheld broadband gaming device, was the top-selling gaming device in 2007 with 8.5 million units sold.
Could this statement be pushback from an infrastructure that can’t support gaming and is trying to undermine not only a competitor, but also an entire platform of innovation that millions of Americans take advantage of on a daily basis?
The rise of various, multi-tasking devices that can provide broadband access and other services has various industry leaders looking for ways to best position themselves as the market begins to take a more concrete shape. The FCC’s net neutrality principles as they relate to devices and competition (and how it eventually chooses to enforce them) will play a major role in that process.
Further reading:
