E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The FCC has proposed a new policy intended to protect “net neutrality,” preventing Internet bandwidth providers from favoring certain data transmission.
The Federal Communications Commission has proposed a new policy intended to protect “net neutrality,” preventing Internet bandwidth providers from favoring certain data transmissions, but without imposing what it calls “regulatory overreach” that could stifle investment by telecommunications companies in Internet infrastructure. E-commerce companies generally favor the net neutrality stance because they want consumers to be able to access video and other content on their sites without restrictions.
Calling the proposal a “narrow and tailored approach” toward establishing a fair system of regulating use of the Internet, chairman Julius Genachowski said the FCC plans to draw up a plan that would classify only the transmission component of broadband Internet access service as a telecommunications service under provisions of Title II of the Communications Act of 1934.
That step is intended to provide the FCC the legal leverage it needs to insist that telecommunications companies and Internet service providers don’t impose restrictions on the use of Internet transmissions—for example, by blocking some web site operators from transmitting high volumes of data files or by charging some web sites premium fees for such transmissions. Online retailers have been concerned that such restrictions could limit their ability to employ video and other forms of rich media.
The FCC’s new proposal comes one month after a federal court ruled that the FCC exceeded its legal authority under Title I of the Communications Act when it sanctioned Comcast Corp. for slowing down the web traffic of some customers who were downloading large files through peer-to-peer networks like BitTorrent. The FCC, since the administration of George W. Bush, had staked its Internet regulation authority on Title I of the Communications Act.
By switching its policy to operate under Title II, which deals specifically with telecommunications and electronic publishing, the FCC is figuring it will have the legal basis to regulate.