Tiered Service - History

History

It was not until the Internet began its rapid evolution that tiered services became a controversial issue. And it was not until the early 2000s that Internet carriers considered the option of abandoning net neutrality policies. In 2005, the FCC changed the way Broadband service providers are regulated. This made Broadband service providers "information services" instead of "telecommunications services". This means Broadband service providers are no longer subject to Common carrier Regulations. Since the beginning of the twentieth century, common carriage guidelines required the quality of service must be the same for all, preventing one customer from being favored over another. During the first decades of the 1900s, this policy related directly to the telephone industry, and AT&T specifically. However, in recent decades, the policy has grown to encompass a broader range of communication services. Preventing preferential treatment of customers in the realm of the internet is referred to as the policy of Net Neutrality. Former chairman of the FCC Michael Powell considered net neutrality to be fundamental to the success of the Internet and even one of the basic rules to maintaining freedom on the Internet. The Federal Communications Commission (FCC) continued its skepticism of tiered pricing for quite some time, and it was not until concerns about the availability of the spectrum began to surface that things began to change. FCC Chairman Julius Genachowski announced in 2010 that the benefits of tiered pricing include helping to prevent data backups on networks. Genachowski expressed his fear of a coming "spectrum crisis" as a result of the increase in smartphone usage ultimately clogging carrier networks. The FCC suggested a number of solutions to the problem including greater use of the unlicensed Wi-Fi spectrum, more femtocells, and more efficient arrangement of cell towers, but even these measures were not believed to be enough to keep spectrum bands open. Attempts have been made to put price controls on tiered service. United States Congress put a bill forth to prevent a "two-tiered pricing scheme with priority service." The bill did not pass congress, but allowed the FCC to stop ISPs from blocking websites.

The way ISPs tier services for content providers and application providers is through "access-tiering". This is when a network operator grants bandwidth priority to those willing to pay for quality service. "Consumer-tiering" is where different speeds are marketed to consumers and prices are based on the consumers willingness to pay.