What you need to know about the FCC's net neutrality ruling

The Federal Communications Commission laid down some ground rules governing its vision for net neutrality
this week. Net neutrality matters because it's what keeps the Internet
open and accessible to everyone, so this ruling is pretty important.
How'd the FCC do? Not great, but we'll break it down for you.

The Good

Network management and packet discrimination must be reasonable

The FCC is trying to prevent companies from being able to pay more to
have an Internet service provider (ISP) treat its data better than
everyone else's. We're not talking about charging you and me for a
faster connection (which is fine), we're talking about giving different
types of data prioritization across the network, which would make things
suck for everyone who didn't pay for that service. This is now a no-no.

By allowing 'reasonable' packet discrimination, the FCC's intent is
to allow an ISP to make sure that its networks are running smoothly for
everyone. This sounds great, and it would be, if ISPs weren't apparently
all greedy bastards. But more on that later.

Wireless ISPs (AT&T, Verizon, etc.) play by different rules, but the FCC does say that a provider won't be allowed to block applications that directly compete with its own
services. An ISP couldn't block Skype, for example, if it competed with
the company's voice service, and it couldn't block Google Maps to force
you to use its own map app.

ISPs will be required to be transparent

If your ISP does need to do some of this "reasonable" packet
discrimination for network management purposes, it's required to tell
you exactly what it's doing and how it's doing it. The ISP is also
required to tell you (before you pay anything) which sites might be
blocked, and what speeds users are getting. Realistic speeds, not all
this "up to" business we're used to.

The Bad

Blocking of lawful content is banned

Your ISP can't stop you from watching porn, as long as it's lawful porn. But, your ISP can
stop you from accessing sites that it can argue are questionably legal,
which might include BitTorrent trackers (even if they track lawful
content) and sites such as WikiLeaks.

This is bad not because we're endorsing illegal sites, 'cause we're
not. It's bad because it says that it's okay to censor things, and
censorship, even a little bit, is evil.

The Really, Really Ugly

Network management and packet discrimination is allowed

What the FCC thinks is reasonable and what your ISP thinks is
reasonable when it comes to packet discrimination for network management
are two entirely different things. The worst case scenario is that ISPs
ultimately get to decide what's reasonable and what's not, which would
be a disaster. Why? Well, an ISP might be able to argue that it's
reasonable for it to restrict the delivery of streaming video, since it
takes up so much bandwidth, while trying to sell you cable TV at the
same time. It's clearly a conflict of interest, but that's just the tip
of the iceberg. Same with content blocking: by saying that sometimes it's okay to discriminate against some kinds of data, it's leaving the door wide open for abuse of the system.

The other ugly thing about allowing data discrimination is that the
FCC isn't applying most of these already questionably strict rules to
wireless data, because they say that wireless has less bandwidth so it's
more reasonable for providers to prioritize content. This is pretty
short sighted, considering that within the next decade at the outside,
we're all going to be relying on wireless connectivity pretty much all
the time. It's a terrible precedent to set.

In fact, the rules for regulating wireless connections is still
pretty ill-defined at the moment, and it's one area that could cause
more net neutrality headaches in the years to come.

What's Next

Two things are probably going to happen next.

First, Republicans (who were responsible for the two 'nay' votes on
the five member FCC panel) are going to try to undo everything that the
FCC is working toward because they say additional regulation goes
against the spirit of the free market or something, which is bullshit.
Your ISP wants to do what's best for itself, not what's best for you.
Don't fool yourself: it's not the same thing.

Second, ISPs are probably going to take the FCC to court on what
exactly constitutes "reasonable discrimination," among other things. The
companies may argue that the first amendment grants the right to
deliver information through a company's network however it wants. The
scary thing is that ISPs such as Comcast don't seem particularly
concerned about these new regulations, suggesting that it's confident
that it can win some of the more important legal challenges. And if
Comcast and others do win, it could set a legal precedent that could
leave the FCC worse off than when all this started.

The FCC is releasing additional details about its ruling in stages,
so it may be a little while before it's entirely clear how everything is
going to work. The initial perception, for instance, was that paid
prioritization was going to be allowed, until the FCC followed up later to clarify (as Ars Technica points out) that it is in fact going to try to stop it from happening. Expect more clarifications like this in the near future.

The Nutshell

The FCC has taken a well-intentioned first step that offers some
small net neutrality benefits, but the deal is clearly a compromise with
corporate interests and may not ultimately do much to keep the Internet
free and open.