As it looks to forge new rules on net neutrality, the Federal Communications Commission finds itself between a rock and a hard place.
On one side, pressure is being exerted by federal court rulings, which struck down its previous guidelines for fair and equal access to Internet infrastructure. But as it tries to make compromises--allowing Internet service providers to set up peering deals, for example--it finds itself subject to backlash from consumer groups, politicians, Netflix (NASDAQ: NFLX) and others.
In Monday's Wall Street Journal, writer Ryan Knutson outlined what is perhaps the FCC's most plausible path forward--to use concessions for the ongoing flurry of pay TV/ISP mega-mergers to achieve its goals in a way policy building cannot.
As Comcast (NASDAQ: CMCSA) looks to gain approval for its proposed $45 billion takeover of Time Warner Cable (NYSE: TWC), and AT&T (NYSE: T) seeks to do the same for its planned $49 billion purchase of DirecTV (NASDAQ: DTV), FCC chairman Tom Wheeler has the power to extract the concessions on net neutrality--and other issues--that may not exist in any eventual FCC mandate.
"You got two-thirds of the industry in front of you potentially by the end of the summer, which is enormously tempting to try to create an industry structure around that," said Harold Feld of Public Knowledge, an open Internet advocacy group, to the WSJ. "But it's not as easy as it looks. You'll have a bunch of different companies, many of whom may not be willing to go that far."
To a degree, the paradigm the WSJ predicts is already being put in place. Comcast, for example, is set to adhere to the FCC's 2010 net neutrality laws until 2018 as a condition of its earlier approval for its purchase of NBCUniversal. And AT&T has agreed to abide by those mandates until three years after its tentative deal with DirecTV closes.
The question: Can the FCC get Comcast and AT&T to abide by these conditions on a more permanent basis?
- read this Wall Street Journal story (sub. req.)
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