Of the many enormous implications that the FCC's Title II reclassification of the internet could have, perhaps none is bigger or more jarring to the telecom industry than the news that mobile internet will be regulated for the first time with the same level of consumer protection as your wired telephone for the first time.
Make no mistake, the effects of this change are far from theoretical — there could be very real modifications to your phone service that you'll notice, assuming the rules go through and aren't litigated away through years of court battles that are inevitably to come. Let's take a look at some of the features and arbitrary limitations your wireless carrier puts on you that could change or go away altogether under a Title II-driven regime.
T-Mobile Music Freedom
T-Mobile launched Music Freedom last year, and it's been a troubling feature since day one: it exempts streaming music services from data caps. The company — and in particular firebrand CEO John Legere — have vigorously defended it by noting that any music service is welcome to participate in the program, but the problem is that it's opt-in at T-Mobile's discretion, not opt-out, and there's nothing stopping T-Mobile from arbitrarily discriminating against certain services.
Under the FCC's proposed new rules, so-called zero-rating services like Music Freedom wouldn't be outright banned, but they'd be examined on a "case-by-case basis," says a senior FCC official. The official notes that Music Freedom is a "lesser concern" for prohibition because there's no obvious harm to the consumer. Clearly, though, that could change: in order for it to be allowed under Title II, it wouldn't be able to hinder service to any of T-Mobile's customers, which suggests that there would be no way for T-Mobile to ever deny a music service entrance into Music Freedom — nor would it be able to charge streaming providers for the privilege of being a part of the program.
Title II regulation would likely put a damper on wireless operators' management of the speeds you get on your device. FCC chairman Tom Wheeler foreshadowed this with a stern letter sent over to Verizon last year, questioning why the carrier was planning to slow down LTE service for unlimited customers under certain circumstances. Verizon replied that it was a limited move focused on network management and that the maneuver was commonplace in the industry, but the 2010 Open Internet rules — which would be enforced across wired and wireless internet alike under Title II regulation — have a fairly hard and fast "no throttling" clause. There is a loophole — throttling would be disallowed "on the basis of content, applications, services, or non-harmful devices," which means that customers on capped plans might still be subject to throttling, but targeting specific customers with unlimited plans for using Verizon's fungible definition of "too much" data would almost certainly run afoul of FCC guidelines.
That said, FCC officials note that "reasonable network management" would still be allowed, saying that they're well aware of the architecture of wireless networks — perhaps a subtle warning to wireless operators that they can't get one over on the government simply by saying "because LTE" and moving on.
AT&T has been touting so-called sponsored data for a year now, a troubling system by which individual providers of apps or services can pay AT&T directly to subsidize the data they consume on your device. In other words, deep-pocketed companies have an opportunity to shut out upstarts by giving the data pipe between consumers and their services a huge advantage.
When asked whether sponsored data constitutes "paid prioritization" — a notion unambiguously disallowed under Open Internet rules — an FCC official's response was very clear: "Yes, it would," he said. As with almost every aspect of the proposed regulation, though, there are plenty of exceptions backstopped by a commission that is keen on taking possible violations on a case-by-case basis. "There may be consumer benefits, there may be significant detriment" depending on the nature of the sponsored data, the official noted. In other words, AT&T's system seems like it won't play under Title II, but there's wiggle room. At least it's consumer benefit that the FCC will have foremost in its mind when analyzing things like this.