What You Need to Know About the Net Neutrality Decision

Comedian John Oliver and the millions of people he unleashed on the FCC last summer have gotten what they wanted: A reclassification of Internet service as a public utility aimed at preventing providers from blocking or slowing certain content or speeding up favored content.

The 3-2 Federal Communications Commission vote largely enshrines current practices at the major providers, such as Comcast, AT&T and Verizon Communications, and as such probably won't hold any immediate effects for the average consumer. It does, however, prevent a tiered Internet where companies or content providers can pay for speedy access to customers.

The debate is largely one in Washington about regulation and big business and the interplay of government and technology investment, with direct implications on the future ease and cost of your Web surfing at home. The debate, of course, is far from over with behemoths like Comcast and Verizon likely to challenge the changes, both in Congress and in federal court.

ISPs have argued the new rules also mean heavier regulation — potentially even to government oversight of prices — and may have unintended consequences in the market.

The FCC has said repeatedly it has no interest in regulating prices or forcing companies to share their access into homes with rivals. That's little consolation to investors, BTIG analyst Rich Greenfield has said, arguing that the new regulatory uncertainty is likely to depress share prices across the industry. 

There is also the prospect that the FCC's role in the industry will lead to less capital spending and slow both infrastructure expansion and the growth of broadband speeds. The industry says its top download speeds have doubled in recent years — without the FCC's involvement — and that government interference could hinder progress. The companies also argue that Americans enjoy better Internet speeds and prices than consumers in most of the world.

The rules begin "a costly and destructive era of government micromanagement that will discourage private investment in new networks and slow down the breakneck innovation that is the soul of the Internet today," an industry group, Broadband for America, said in a statement. 

Net neutrality is also not a magic bullet that will spur a flood of new players in the broadband market, such as the small effort Google has been making with its high-speed fiber service, and a dramatic reduction in prices. Nor will the rules prevent ISPs from selling the various branded packages, with higher Internet speeds the more you pay, much like Burger King has various "packages" of its burgers, with different attributes and prices. 

Internet providers say the reclassification of broadband service could also lead to a flurry of new state and federal fees like those attached to mobile phone and natural gas service. Will you now pay a new user fee for the home broadband purchased from Comcast or AT&T? A report in December from the Progressive Policy Institute, a Washington think tank, argued that this outcome is inevitable and calculated a jump in annual bills from $8 in Delaware to as much as $148 in parts of Alaska, based on the current prices and fees. 

All that is hypothetical, given the long road to implementation and the many lawyers rushing to this dispute. For now, the Netflix and Hulu stream as usual and the monthly bill won't be any higher or lower because of the FCC action. 

Netflix will explore a new complaint process to have the FCC investigate the terms of access deals in which the video company pays Verizon and Comcast fees to carry its traffic. Those deals must be "just and reasonable" under the net neutrality rules. Netflix spokeswoman Anne Marie Squeo said Thursday the company will review the language of the new FCC regulations and decide whether to present its current arrangements with the ISPs for an agency review.

Amid all the rhetoric from both sides, it's interesting to note that one sizable broadband seller, Long Island-based Cablevision Systems, isn't phased about the ruling. "The idea of more regulation is never great for us," Chief Executive James Dolan said Wednesday on an earnings call. "But to be honest, we don't really see … any real effect on our business. So, therefore, we're sort of neutral." Millions of Americans are the same — at least for now.