Why the FCC's Got AT&T and Verizon Scared ShitlessS

Remember net neutrality? Over a year after Comcast's torrent-killing ways turned it into a rallying cry for chest-slapping geek solidarity, it's back. But this time, it's got AT&T and Verizon scared shitless—and it might actually screw us over.

A quick refresher: Net neutrality is, simply, the principle that all data gets treated the same by an ISP or service, whether it's incoming email or HD videos of dudes getting socked in the nuts by a 4-year-old on YouTube. A real-world example of very non-neutral behavior would be what got Comcast slapped by the FCC: specifically sabotaging torrents.

Theoretically, this could go beyond policing piracy, for instance if, say, Time Warner competitively blocked or slowed down Hulu, or if Verizon struck a deal with Google to give its data priority over traffic from Bing, so people using Google would get a way better experience than people using Bing. Streaming video is a not-so-coincidental theoretical example, since the explosion of video traffic is what the ISPs say is swallowing up all of the internet.

The end result of the threat of government-mandated net neutrality regulations for ISPs was a mixed "win" for consumers: AT&T, Comcast and Time Warner all responded with monthly data caps on their internet service in at least some of their markets. (Comcast limited it in all markets.)

As for the FCC telling ISPs to be more explicit about network management practices, Comcast started straight-up telling people heavy internet users would have their entire connections slowed down. While they suck for consumers, these are all "net neutral" practices, since no particular kind of data is discriminated against. The net neutrality debate fizzled down, though in some ways people were worse off than before.

With a new president, comes a new FCC chair, Julian Genachowski. Unlike his predecessor, who regularly reamed the cable industry but was a little too snuggly with the telecoms and against "hard and fast" net-neutrality rules, Genachowski is all about rules for everybody. Including the wireless carriers.

As you're probably well aware, mobile broadband is treated way differently than the internet that's piped into your house. It's considered fragile. There's far less of it to go around, with a less developed infrastructure and limited wireless spectrum to use. The rules for using it are tighter, like dating a nun. Restrictions abound, like no p2p. You don't want the network to break, after all. That's why, for instance, AT&T previously blocked Skype and SlingPlayer from running on 3G on the iPhone—and continues to block Sling—and why Apple rejects every torrent app that even tries to cross into the App Store.

In the past weeks, Genachowski has made it clear that he thinks that should change, that openness should "apply to the Internet however accessed." He's not saying they shouldn't be able to manage the network to make sure it runs smoothly, to be clear. But if you were scratching your head about why AT&T conceded and opened their network up to VoIP on the iPhone, look no further than this nugget from Genachowski, from a speech he gave three weeks ago:

We've already seen some clear examples of deviations from the Internet's historic openness. We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks)..."

AT&T very much does not want the government to tell it how to run its networks, particularly the mobile one. AT&T Mobility CEO Ralph de la Vega this week responded pretty clearly to the FCC's plans:

"Before we begin ‘fixing' what isn't broken, we need to be thoughtful about the consequences. We believe the marketplace today is vibrant, and there is no need to burden the mobile Internet with onerous new regulations."

So what's going to happen?

Well, the FCC is clear about what it thinks. This week, at a wireless telecom conference, Genachowski reiterated that net neutrality should apply to mobile broadband too. If those regulations pass, we'll likely see the same thing we saw with the landline providers: Caps (not just on 3G cards like there are now) and "transparent" network management. Goodbye unlimited mobile broadband like the iPhone has. You will pay for every ounce of data that you use. And if you're "crowding" the network by downloading a bunch of stuff, you're gonna get slowed down because that's the easy "net neutral" way to keep users in check. How much better is that, really?

So iPhone users, enjoy your "unlimited" wireless connections now. Pay-per-byte data—for both wired and wireless broadband networks—may well be the road we're going down. Verizon is the last major landline broadband provider who has held back from capping or throttling its services (looove my FiOS), but even its CTO says that eventually, "we are going to reach a point where we will sell packages of bytes."

Hopefully those packages will come cheap.