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Proposed FCC rules fail to reflect mobile's role in net neutrality

Proposed Federal Communications Commission rules on Internet service in United States homes would be excessive if they treated wireless carriers like 19th-century telephone company monopolists.

The FCC wants to reclassify high-speed Internet service as a telecommunications service, instead of an information service, to ensure so-called net neutrality, or an open Internet. Chairman Tom Wheeler?s adoption of some crucial provisions and tossing others has raised questions about just how tough the regulations under Title II of the Telecommunications Act would be on the mobile sector.

?Regulating mobile operators as if they were 19th century monopolists stringing telephone wires would be overkill,? said Rich Karpinski, senior analyst at Yankee Group, Boston. 

?In the past, it?s been largely hands-off. Such an approach makes sense,? he said. ?The U.S. mobile sector is both extremely competitive and deep in yet another cycle of capital intensive investment.? 

Fast lanes
The FCC?s proposed rules would give the regulatory authority strong legal powers to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else, the New York Times reported. Those prohibitions are hallmarks of the net neutrality concept.

Racheting up the debate on net neutrality.

While over-regulating wireless carriers would be excessive, the FCC can be expected to make sure that mobile operators abide by the key principles of net neutrality, including no unreasonable discrimination or blocking of content. 

?More than most, mobile marketers understand that not all customers are created equal, and that data-driven targeting ? something the mobile Internet enables in spades ? trumps best-effort, lowest common denominator customer approaches,? Mr. Karpinski said.

?A regulatory framework that allows mobile operators ? within reasonable bounds ?  to leverage their network, customer and data assets to bring added value to the mobile marketing ecosystem helps all boats rise.?

Still, analysts were left pondering how the proposed rules might affect mobile content delivery and wireless service.

?If pricing of the fixed Internet is partly controlled by government, it is arguably only a matter of time before mobile pricing goes down the same route,? said Neil Mawston, London-based executive director for global wireless practice with Strategy Analytics. ?This could impact pricing and profits for mobile operators, such as Sprint.?

Regulating mobile Internet pricing would be good for some, bad for others. 

?Poorer sections of society may be able to access mobile Internet at fairer prices,? Mr. Mawston said. ?Those wishing to pay extra for faster mobile Internet access may find their options restricted.?
The proposed regulations could be the beginning of even tighter long-term restrictions on mobile Internet pricing and network access. Regulations also could restrict the application of innovation that would enable data services over mobile networks.

Besides putting an end to so-called fast lanes, the proposed rules could put an end to zero-rated data initiatives, depending on how net neutrality is interpreted. 

?Norway is a good example of where the regulator has banned zero-rating of content, which could negatively impact on sponsored data initiatives,? said Nitesh Patel, London-based director of wireless media strategies for Strategy Analytics? global wireless practice.

The proposed rules come as mobile's role in online content consumption is growing.

In May, the FCC voted to open up for public debate its rules meant to guarantee an open Internet but also allow content providers to pay for a guaranteed fast lane of service. The agency also encouraged the public to weigh in on mobile and net neutrality, indicating the topic was on regulators? minds.

The FCC has been in a tough spot trying to pull mobile into the equation.

There is also more competition in mobile, and the FCC would like to keep it that way, so arguably competitive forces could help enforce non-discrimination in mobile.

The proposed rules are an effort to address significant changes that have taken place in the mobile marketplace since 2010, pointing to how mobile providers manage their networks, the increased use of Wi-Fi and the growing use of mobile devices and applications.

Creating a clearer path to consumers?

?A reclassification that would provide Internet as a public utility is a win for both consumers and marketers,? said Ken Wisnefski, CEO/founder of WebiMax. ?The alternative of allowing Internet fast lanes really only serves to insure prices go up first on high bandwidth services like Netflix and subsequently the consumer.  

?But marketers also really benefit from having the clearest path possible to the consumer,? he said. ?And today that is through a myriad of services, sites and apps that connect people to the Web through their mobile devices.? 
Final Take
Michael Barris is staff reporter on Mobile Marketer, New York