Net Neutrality

Net Neautrality
In November, President Obama asked the Federal Communications Commission (FCC) to take up the strongest possible rules to protect net neutrality, the principle that says Internet Service Providers (ISPs) should treat all Internet traffic equally. At issue is a proposed set of FCC rules that would create a “two-tiered internet” by allowing ISPs to charge subscribing companies a premium to boost website download speeds.

Shorthand for the concept that internet users should be in control of what content they view and what applications they use on the internet, net neutrality requires that broadband networks be free of restrictions on content, sites, or platforms. With net neutrality regulations in place, networks would not be able to restrict the equipment that may be attached to them, nor the modes of communication allowed on them. Finally, they would also have to ensure that other communication streams do not unreasonably degrade communication.

The National Association of REALTORS® opposes the proposed rules. In a comment letter to the FCC, the organization described the negative impacts that it would have on the real estate industry and the hundreds of thousands of independent, REALTOR®-owned businesses. “Because the business of real estate is increasingly conducted online, net neutrality practices are essential to ensuring that real estate content may be freely and efficiently distributed online,” according to NAR, which continues to advocate to the FCC for an open and free internet.

Open Internet Orders
Melanie Wyne, NAR’s senior technology policy representative, says the net neutrality issue dates back to 2006, when the FCC issued “Open Internet Orders” under the Bush Administration. “These orders were issued as principles that the FCC later tried to implement as regulations,” says Wyne. “When that happened, the Comcasts and Verizons of the world filed a lawsuit claiming that the FCC didn’t have the proper authority to issue those regulations.” The court agreed with the ISPs—a move that pushed the FCC to revise the rules and reissue new policies around net neutrality.

“Since then, there’s basically been an [ongoing] court battle challenging the FCC’s authority to actually implement its rules,” Wyne says. In 2010, for example, the FCC issued new rules and was promptly sued again by the ISPs. Under those rules, broadband providers were “prohibited from blocking lawful content, applications, services, and the connection of non-harmful devices to the network.” Wireless broadband providers, however, were allowed more flexibility, reflecting the technical limitations on the amount of traffic a wireless network can handle.  

The net neutrality issue heated up again last year when the U.S. Court of Appeals for the District of Columbia in January ruled that key elements of the FCC’s 2010 Open Internet Order were invalid. At that point, ISPs were free to charge content companies higher fees to deliver Internet traffic faster or otherwise more efficiently. Then, in May, a new FCC commissioner issued a new “internet fast lanes” rule for comment. This rule would allow large content providers like Netflix and Facebook and others to negotiate separate, exclusive deals with ISPs to carry their content on faster connections.

Fast Lanes Proposal
According to Wyne, NAR is concerned about the FCC’s “fast lanes” proposal and has commented in opposition to the current proposed rule. The organization has taken a strong position on this issue based on the premise that the business of real estate is increasingly conducted online. Streaming video, virtual tours, and voice-over-internet-protocol are just some of the technologies that are commonly used by real estate professionals today, says Wyne. “Net neutrality practices will be essential to ensure that real estate content may be freely and efficiently distributed online.”  

According to NAR, some possible examples include practices that would (1) limit the public’s access to real estate websites, (2) limit a real estate firm access to online service providers who may be in competition with network operators’ own services, e.g. Internet phone services, or (3) charging certain websites more for the broadband speeds necessary to properly transmit or display audio or video content such as online property tour, podcast or phone services.

Wyne says NAR is particularly concerned about how a company like Zillow might be able to broker an exclusive deal with an ISP like Verizon or Comcast that would give consumers faster access to Zillow’s website—versus another competing site that didn’t have an exclusive deal in place. “We understand that our members are online content providers who reach consumers via the internet,” says Wyne. “If your competitor can get to consumers faster—or have a website that loads more efficiently and is easier to navigate—that puts you at a competitive disadvantage.”

President Obama Speaks Up
In November, President Obama issued a video statement asking the FCC to take up the strongest possible rules to protect net neutrality. NAR President Chris Polychron issued a supporting statement at the time, noting the President’s bold support for true net neutrality rules that preserve an open Internet and allow for equal, unencumbered access to this powerful driver of economic activity for both small businesses and consumers. “If the FCC’s proposal went into effect today,” Polychron stated, “new and small businesses, who cannot afford to pay the fees, would instantly be put at a competitive disadvantage.”

Wyne says that fast lanes proposal is particularly troubling to NAR, which filed comments opposing the FCC’s proposal and organized a broad real estate coalition comprising over 100 MLSs, large firms, and industry associations that also oppose the proposed rules. Wyne says NAR will continue to let members of congress know about its concerns and urges them to weigh in with the FCC. “At this point we’re waiting to see what happens next.”

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