Net neutrality will apply to cell networks. Here's the best case for why it shouldn't.

Later today, the Federal Communications Commission is expected to approve the strongest network neutrality rules the United States has ever had. Much of the debate has focused on an esoteric legal maneuver called reclassification, which allows stronger regulations by treating broadband service as a public utility. But the rules make another big change that has received less attention: it extends network neutrality rules to the wireless service that powers our smartphones.

That represents a significant change from the FCC's previous network neutrality rules, which were drafted in 2010 and struck down by the courts last year. Those rules focused primarily on home internet access delivered over a physical cable. Wireless networks from providers such as Verizon Wireless, Sprint, and T-Mobile were exempted from most regulations because in the agency's view it was "at an earlier stage in its development than fixed broadband and evolving rapidly. "

Now the agency is changing its mind, applying the same rules to both types of service. Critics say that's a mistake — that the arguments that persuaded the FCC to exempt wireless networks from regulation five years ago are still valid today. If they're right, the new rules could hinder innovation in the wireless market — the exact opposite of what they're supposed to accomplish.

Network neutrality rules could make it harder to manage congestion

(Apple)

Technically speaking, residential broadband is relatively simple. Internet access is delivered over a cable that runs to the customer's home, and customers can rely on a stable amount of bandwidth.

Wireless networks are different. The capacity available at any given time depends on a number of factors, such as a smartphone's location, the frequencies it is using to communicate, how recently the nearest cell phone tower has been upgraded, and other factors. A customer's connection can be working perfectly one minute, only to slow to a crawl the next minute as she switches to a cell phone tower that's in greater demand.

The greater scarcity of wireless broadband has prompted wireless companies to limit the use of bandwidth-heavy applications on their networks. For example, a few years ago AT&T limited the use of Apple's FaceTime application over its network. Critics blasted that as a violation of network neutrality, but AT&T argued that the restriction was needed to prevent the app from overwhelming its network.

Ryan Radia, an analyst at the libertarian Competitive Enterprise Institute, says that makes it important to give wireless providers flexibility to make these kinds of decisions to ensure that bandwidth-heavy applications don't make the network unusable for everyone.

"Different applications are hindered by reduced bandwidth in different ways," Radia says. For example, if you're watching a pre-recorded video, a few seconds of buffering might not matter much at all. On the other hand, buffering can make realtime video chat services like Skype or Facetime useless. Radia argues that letting wireless providers choose which types of content to prioritize can help them ration scarce bandwidth and provide a better customer experience overall.

Michael Calabrese, a network neutrality supporter at the New American Foundation, concedes that mobile networks are more vulnerable to unpredictable congestion problems. But he argues that network neutrality rules can take this into account, but allowing wireless providers to engage in what he calls "application-agnostic" prioritization. Such a rule would allow wireless carriers to prioritize all video-chat apps, for example, over other types of traffic. However, wireless companies wouldn't be allowed to provide better performance to one app (such as FaceTime) over another (Skype).

Strong wireless competition makes net neutrality rules less necessary

(Chris Hondros/Newsmakers)

A typical American home has two options for broadband service: the local phone company (such as Verizon or AT&T) and the local cable company (such as Comcast or Time Warner Cable). Only a few cities, such as Kansas City or Austin, have a third option such as Google Fiber.

Even worse, in many parts of the country the local phone company is still relying on ancient and pokey digital subscriber line (DSL) technology to deliver broadband service. If households in these areas want to use bandwidth-intensive applications such as video streaming, they have one realistic option: the local cable company. Concern over the growing power of the largest cable companies has helped fuel public support for network neutrality rules.

The barriers to entry are lower in the wireless market

There's more healthy competition in the wireless market, Radia says. "We've got four nationwide carriers in the US," he adds. And they've been competing fairly aggressively. For example, AT&T and Verizon have been boosting the amount of data customers can get for their money.

As a result, Radia argues, there's less reason to worry about mobile providers abusing their power than there is with incumbent cable and telephone companies. If a wireless company started arbitrarily blocking popular apps or services, customers can switch to one of several competitors.

Wireless net neutrality rules are more likely to become out of date

Residential broadband is an older and more mature technology. Wireless networks are still changing rapidly. Today's state-of-the-art wireless technology, called LTE, has been around for less than five years.

This rapid pace of change increases the danger that the rules the FCC adopts today could prove to be a poor fit for the wireless networks of the future. Legal or technical distinctions that seem to make sense for today's generation of technology may become increasingly out of date as wireless technology evolves. That's less likely for home internet access, which is a simpler technology that has evolved more slowly.

Related, Radia says, the barriers to entry are lower in the wireless market. Building a new wired broadband network requires digging up thousands of streets to lay fiber optic cables. A new wireless network requires a comparatively small number of cell phone towers. So there's more reason to worry about excessive regulation becoming a barrier to entry for future entrepreneurs in the wireless market.

Regulators should take one step at a time

Radia is a network neutrality skeptic. But he argues that if there are going to be regulations, it makes more sense to start by regulating wired broadband connections and worry about wireless later. The issues are less complicated in the residential broadband market, and the FCC might learn valuable lessons that could help it craft more sensible rules for wireless markets.

The FCC's new rules are expected to be more than 300 pages, and the agency will be navigating a variety of tricky technical and legal issues. If the FCC makes mistakes, those mistakes will have a smaller impact if the rules only affect wired networks. And the FCC's experience with applying network neutrality to wired network can help inform later regulations on wireless.

Calabrese, however, argues that it's important that the same rules apply across the board. "A disproportionate number of low-income, young, and minority people are relying either exclusively or primarily on mobile networks for internet access," Calabrese says. He worries that exempting wireless networks from net neutrality rules could create a two-tiered internet, in which some customers enjoyed stronger network neutrality protections than others.

Of course, that argument cuts both ways. If Radia is right, then excessive regulations could prevent wireless providers from effectively managing scarce bandwidth on their networks, providing low-income users with inferior service.

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