Net-neutrality rules set level playing field for data-intense healthcare users

The Federal Communications Commission embraced broad net neutrality rules in a 3-2 vote Thursday that ensures health technology startups and telehealth companies won't face higher costs for Internet fast lanes.

The FCC rules essentially reclassify the Internet as a public utility and will force network carriers to treat all internet traffic equally, prohibiting them from charging extra for faster service or selectively slowing down certain types of traffic. The regulations may prove critical for the burgeoning digital health sector that relies on moving large quantities of data and conducting more and more services over the Internet.

The rules appear to be broader than initially expected, although the final rules will not be available for some time, according to an FCC spokeswoman. FCC commissioners at the public meeting said the rule will apply to both wired (cable or broadband) and wireless (mobile) networks.

The latter category is crucial for some healthcare companies, American Well senior vice president Mike Putnam said in an interview. His video visits company has handled an increasing share of provider visits over mobile networks since releasing an app allowing patients to connect with doctors through the video functions on their phones.

That makes ensuring high performance crucial to the business model, and Putnam said the FCC's net neutrality rules are the best way to do that.

But Ryan Radai of the libertarian Competitive Enterprise Institute said the FCC's application of net neutrality rules to mobile networks will be counterproductive for technologies relying on high-speed service. It's possible to build more wires but not to build a bigger spectrum that carries more wireless data. That means wireless providers need to ration resources and give priority to certain kinds of data. The rules, he said, are likely to make that more difficult to manage.

Industry observers generally agree that high-speed, high-quality data transmission is critical for healthcare. That's particularly true for services relying on video, but many other types of healthcare companies are interested in slinging data across the Web. And, given the importance of healthcare procedures and information, data typically needs to travel quickly.

That means healthcare companies not only don't want to have to pay extra for fast speeds, but also that they need networks to be fast overall. Net neutrality advocates generally focus more strongly on the first proposition. Opponents, though, have countered that the regulations will slow the investments required to ensure high speeds.

Mark Gaynor, a professor of health management and policy at St. Louis University and a longtime advocate for net neutrality's importance for healthcare, said that the public utility reclassification is a step too far. It hypothetically allows the FCC to regulate rates charged by network carriers, among other regulatory burdens. “The FCC is claiming that that will not be done,” but there's no guarantee the commission won't do so in the future, he said.

Republican FCC commissioner Ajit Pai argued that the commission's approach will mean higher broadband prices, slower speeds and less innovation. "The rule gives the government the power to micromanage the internet," Pai said.

Fellow dissenting commissioner Michael O'Rielly said the economic analysis justifying the rule didn't account for the investments that Internet carriers won't make in their networks as a result of the new regulatory burden.

But FCC Chairman Tom Wheeler countered that comment letters and media reports suggest many broadband and wireless carriers are planning network improvements anyway.

It's not clear yet how the FCC will enforce the new regulations. Industry observers are raising questions about a “general conduct” clause described in a fact sheet circulated by the commission.

That clause, Wheeler said, is intended to “stop new and novel threats to the Internet.” But net neutrality advocates from the Electronic Frontier Foundation have argued that the approach invites “years of expensive litigation” to define what's harmful. "It is likely that only companies that can afford years of litigation to answer these questions will be able to rely on the rule at all.”

O'Rielly agreed in his dissent that the "reality is the rules will be adjudicated case-by-case," making them difficult to enforce and unreliable.

Previous net neutrality rules, promulgated by the FCC in 2010, unraveled when challenged in court.

Advocates say classifying internet service as a public utility puts the regulation on firmer legal footing. O'Rielly and Pai, though, predicted that a similar fate might befall the new rule.

Follow Darius Tahir on Twitter: @dariustahir