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Net Neutrality: What Happened? What's Different Now?

Consumers might not see anything different after today's net neutrality decision, but it does change a lot of things online.

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The one enduring aspect of the decade-long fight about rules for Internet lines has been that most people still don’t understand what on earth everyone is arguing about. To paraphrase one great American, “The net neutrality debate is just too hard to understand, and it’s not your fault.”

As a follow-up to our last explainer on net neutrality, here’s an updated look at where things stand now.

What is net neutrality?

Net neutrality is the idea that the companies that sell you Internet access, like Comcast*, should keep their mitts off the data that flows into your computer or smartphone and treat all those bits equally. That means no blocking of websites and no slowing down of those services.

Federal regulators approved new “Open Internet” rules Thursday — their version of net neutrality — that will prohibit blocking or slowing of traffic. They also prohibit broadband providers from selling fast-lane, priority services to content companies like Netflix, which might create a sort of two-tier Internet.

FCC Chairman Tom Wheeler’s first proposal for new net neutrality rules allowed such fast lanes, but he dropped that idea under heavy assault from advocates who worried it violated the spirit of the Internet and would hurt smaller content providers that couldn’t afford to pay.

Why is this an issue now?

People hadn’t really been complaining about this, so the reason we’re here today is because a federal appeals court last year shot down the FCC’s last effort to adopt net neutrality rules. Also, a lot of people worry that without strong rules, broadband providers will try to stifle competition and play favorites online.

Comcast, AT&T, Verizon and other Internet providers say they won’t block competing websites or apps and will abide by nondiscrimination principles. But there are plenty of people who don’t believe them.

What are people arguing about?

One of the reasons this issue can be hard to get your head around is that much of the arguing is about arcane issues of legal authority.

The FCC on Thursday essentially reversed a decision from 2002 to deregulate lines and said that broadband services (both wired and wireless) will now be subject to a part of the Communications Act — Title II — that was written for old copper phone networks. Previously, the agency had regulated Internet lines under a more amorphous part of the law written for unnamed “information services.”

Title II requires phone companies to smoothly transfer phone calls to one another. That will also now apply to broadband providers, who have mostly been delivering traffic without complaints for years. The rules codify that practice.

The old Title II rules for “telecommunications services” also include a lot of other obligations, however, that were written with the old U.S. phone system in mind. Those include tariffs, rate regulations and a requirement that phone companies provide wholesale access to competitors at reasonable rates. Phone and cable companies hate this provision because it would mean that a company like Verizon might have to sell access to its backbone network to a potential competitor at reasonable rates.

The proposal approved Thursday, however, leaves out a lot of those obligations because FCC officials didn’t think they made much sense for modern networks. That includes rate regulation, taxes, the wholesale access provision or requiring broadband subscribers to pay what’s called a monthly federal Universal Service Fund fee. (Critics of the plan note that the FCC action would, however, allow states to charge USF fees on broadband service.)

What’s new here?

For the first time, net neutrality rules will apply to mobile broadband networks, not just cable or other wired Internet providers. So your wireless carrier now can’t block you from a website or app. (The rules don’t, however, prevent wireless carriers from using data caps.)

Previously, only Verizon Wireless was subject to net neutrality rules. It agreed to the rules in order to buy some airwaves it now uses for its LTE service. That hasn’t stopped Verizon from complaining about the new rules, however, and on Thursday it posted its complaints in Morse code to underscore the idea that net neutrality rules are archaic.

Verizon morse code statement

Another major change is that for the first time, the FCC will regulate what are called “middle-mile” Internet agreements. These agreements allow content companies like Netflix to connect more directly to the broadband providers like Comcast, which makes the viewing experience better for people. Previously, these middle-mile deals hadn’t been regulated.

That’s important for companies like Netflix, which have gotten into major disagreements with Comcast and other Internet providers over these connection requirements. Now, online TV providers and others can file formal complaints if they can’t reach so-called peering or interconnection agreements with broadband providers.

How does this affect consumers?

Practically speaking, you may not see much of a difference.

There haven’t been net neutrality rules in effect for months — ever since a federal appeals court rejected the FCC’s old net neutrality rules last January — and there haven’t been complaints about blocked or slowed traffic lately. (That could be, however, because broadband providers were worried about new FCC rules and were on their best behavior.)

The FCC’s action Thursday is really more of an effort to prevent future bad behavior by broadband providers than address current problems.

As some opponents of the FCC’s proposal have said, the new rules could mean slightly higher broadband bills in the future if states decide to charge USF fees on broadband services. But that’s somewhat speculative and would depend on where you live.

What happens next?

Although the FCC approved the rules Thursday, they won’t take effect for a few more months. They need to be published in the Federal Register first. The agency hasn’t even released the 317-page document yet, although FCC officials are promising they’ll do that as soon as possible. (As soon as possible = sometime in the next few days or weeks.)

Broadband providers and wireless carriers have already promised to sue, and they could seek a court order to halt the rules from going into effect. No matter whether that works or not, broadband providers are also expected to sue in hopes of overturning the FCC’s decision. That court case could take several years to resolve.

We can also expect more investigations of FCC Chairman Tom Wheeler by congressional Republicans. There will likely be a joint House and Senate effort to throw out the FCC’s new rules, but it’s pretty unlikely that Republicans will be able to muster enough votes to overcome a veto from President Obama.

* Comcast’s NBCUniversal unit is a minority investor in Revere Digital, Re/code’s parent company.

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