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FCC might give Netflix what it wants and still allow Comcast to sell fast lanes

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A hybrid proposal said to be gaining support would divide internet regulation into commercial and retail

Mark Wilson

report published this afternoon by The New York Times details one of the possible plans the FCC may debut in their attempt to establish new rules around net neutrality and the open internet. It takes a "hybrid" approach, dividing the new regulations between commercial or wholesale internet traffic and retail or residential internet traffic. In a nutshell, this would mean content companies like Netflix will get the price controls they want when it comes to dealing with companies like Comcast, Verizon, and AT&T. But those companies will also be allowed to give certain data a fast lane over their networks if it was "justified," cementing the gutting of net neutrality that occurred when Verizon defeated the FCC in court.

The plan, as described in the New York Times report, is confusing, contradictory, and not at all technical. In part that may be because it's coming second or third hand. But it also illustrates the way the FCC is tying itself in knots, trying to find purchase for some regulatory authority without overstepping its power and getting shot down again in court.

The report says that the hybrid plan "would apply utility like regulation to the wholesale portion, the exchange of data from the content provider to the Internet service provider for passage through to the end consumer." That would mean a big victory for Reed Hastings, who has been encouraging the FCC to expand their rules to cover this exchange. Netflix had a standoff with the major US ISPs, leading to a massive degradation in the quality of its video to consumers. It solved that by paying them fees for a direct connection.

The second half of the plan would cover the retail internet, the last mile network that runs between your ISP and your home. There the FCC would not attempt to use Title II to ban all fast lanes. The New York Times writes that "Paid prioritization, where a content provider pays for a fast lane to consumers, would be restricted unless it could be proved to be just and reasonable."

The sum of the hybrid plan, according to the report, "would allow the F.C.C. to enforce a rule against blocking of legal Internet content, to install restrictions on discrimination among Internet traffic and still provide some allowance for unique delivery arrangements for specialized services."

Remember, this is just one of four plans currently being considered. And while the report says this plan is gaining support inside the FCC, it also says that the chairman Tom Wheeler has not yet shared it with the four commissioners who would need to take it to a vote. In other words, this is a leak to the media testing the reception of a plan that Wheeler is leaning towards. While it notes that the final plan could come as soon as next month, it also says Wheeler has privately suggested it might be better to postpone until early 2015.