Coverage: What’s next for mobile Internet?

Last week, the Federal Communications Commission passed strong net neutrality rules that many say will create an open Internet for all users. But increasingly, the Internet isn’t just on desktops, it is on mobile devices, making the concept of net neutrality murky at best.

The Time story by Haley Sweetland Edwards had these details on the new rules:

The FCC’s vote is considered a historic victory for so-called open-Internet advocates, and a major blow to big Internet service providers, such as Comcast and Verizon, which will now be subject to stronger regulations.

Crucially, the FCC’s new rules were designed to give the agency explicit legal authority to regulate broadband-Internet providers by reclassifying broadband under Title II of the federal Communications Act.

Because of a weedy legal issue, the U.S. Court of Appeals for the D.C. Circuit found in January 2014 that the FCC did not have authority to regulate broadband, and therefore threw out the FCC’s previous rules on Net neutrality, which were passed in 2010. The court recommended that the FCC reclassify broadband under Title II in order to establish its regulatory authority. Mobile-phone companies and public utilities are also classified under Title II.

The ISPs strongly opposed the Title II reclassification. They argue that the move will destroy innovation and investment in the nation’s digital infrastructure by imposing burdensome regulations on the industry. For example, under Title II, the FCC technically has the power to dictate how much ISPs can charge customers for online access.

The FCC has vowed it won’t regulate broadband as strongly as it could and that it will not control broadband prices. The new rules include a line guaranteeing that the FCC will not regulate “unbundling, tariffs, or other forms of rate regulation.”

Todd Shields wrote for Bloomberg about the increased traffic on mobile devices:

Internet traffic increasingly is running over mobile networks, so it makes sense to include those connections, Wheeler said before the vote. Wireless providers said Congress had exempted their service from strong rules.

The new rules let the FCC judge mobile deals that exempt services such as music streaming from counting against subscribers’ data caps. The agency can accept complaints and might ban an anti-competitive plan.

Venture capitalists had told the FCC the deals violate the concept that all Web traffic should receive equal treatment. T-Mobile US Inc. said its Music Freedom offering, which streams songs that don’t count against data caps, helps it stand out from competitors.

It’s sure to be a hot topic at the Mobile World Congress this year, according to The Wall Street Journal story by Ryan Knutson and Sam Schechner (which has a pretty amazing lead quote):

Mark Zuckerberg says his mission is to connect billions more people to the Internet. But the telecom operators that build networks in the far corners of the world are just as likely to view Facebook as a problem.

They contend that Internet giants like Facebook Inc. and Google Inc. are profiting handsomely at their expense. The Internet companies offer apps that let users circumvent network operators to make phone calls and send text messages free. They also cash in on the traffic for their ads.

The telecom operators say this strategy upends the economics that make investing in Internet infrastructure viable.

“Mark Zuckerberg is like the guy who comes to your party and drinks your champagne, and kisses your girls, and doesn’t bring anything,” says Denis O’Brien, chairman of Digicel Group, a wireless provider in 32 countries in the Caribbean, South America and elsewhere. Google, he adds, earns “billions of dollars on advertising, and they don’t pay a penny. I think it’s the most extraordinary business model in modern history.”

The tensions will be on display this week when Internet companies join mobile operators in Barcelona for the telecom industry’s Mobile World Congress, its main conference of the year. Mr. Zuckerberg is set to participate in a keynote discussion Monday with three operators on the challenge of expanding Internet access.

The New York Times story by Mark Scott pointed out that many people are now performing tasks, such as banking, via apps instead of on desktops, increasing the mobile demand:

Yet despite the numerous networking events and business deals, there is a love-hate relationship involving some of the world’s largest mobile carriers and tech giants like Facebook and Google.

Both sides rely on each other to provide customers worldwide with high-speed Internet access and online services like music streaming and social networking. Yet as smartphones increasingly become the principal means by which people manage their everyday lives, the telecom and tech giants are jockeying to position themselves as consumers’ main conduit for using the Internet on mobile devices.

“There’s a lot of anxiety,” said Adrian Baschnonga, a telecom analyst at the consulting firm Ernst & Young in London. “No one wants to be overshadowed. Everyone is questioning their role in the industry.”

While sales of traditional laptop computers have stalled worldwide, shipments of smartphones — some of which now sell for as little as $25 — are expected to hit almost two billion units this year, according to the technology research company Gartner.

At the same time, upgrades to carriers’ networks, particularly in the United States, Europe and parts of Asia, have increased mobile Internet speeds to a level that allows consumers to carry out many tasks — like online banking, e-commerce and Internet messaging — that, until recently, had been restricted to computers.

The good news is that the FCC rules will cover mobile devices, but that isn’t going to do much to settle the recent tensions between tech and telecom firms. It is likely to be a huge topic of conversation when all the industry giants gather in one place.