Part one of a series by FMC Policy Fellow Rachel Allen

In the past few years, streaming music and video have changed the way artists connect with fans. Popular music services such as Spotify and Pandora, high-quality video sites like Vevo, and a number of other digital platforms and applications have been important tools for fans to discover music and for artists to get paid for their work (even if the business models aren’t uniformly agreed upon). Recent studies have found that applications for music comprise the fastest growing activity among mobile phone users.  Moreover, artists like Jay Z and Lady Gaga, as well as smaller acts such as Dan Deacon, are using mobile applications to create new interactive music experiences (but as was the case with Jay Z, not all of these experiments are embraced).

Why do we bring this up now? Well, streaming music and video services would not be possible without access to high-speed broadband. However, as the music and video industries go mobile, the price and quality of connections has become more and more uncertain.

This series will explore how the evolution of the Internet impacts musicians and other creators—whether the connection is on a desktop, a laptop or a mobile device. We’ll explore the ins and outs of how artists connect, and why accessible technology platforms are essential to today’s creative entrepreneurs.

As a basic minimum, 21st century artists and other innovators require:

• Access to affordable, high-quality broadband.
• The ability to pursue their career goals without having to ask permission of—or pay extra money to—Internet gatekeepers.
• The ability to compete on a level playing field in a legitimate digital marketplace.

The good news is there are some protections in place to ensure the Internet remains open and accessible—at least for wireline (non-mobile) connections. Let’s take a look at how we ended up where we are today, and what musicians and other creators should be considering now and in the future.

What is the Open Internet? A Primer

Launched in 2007, FMC’s Rock the Net Campaign brought together thousands of artists and independent labels in support of an open and accessible Internet. For fans, this means having access to any number of lawful online music services of their choosing. For musicians, it means the ability to do pretty much everything—from planning a tour, to operating an online store, to raising money to developing relationships with fans. The open Internet is crucial for innovation: without it, we’d likely not have the amazing array of legal, licensed services that artists use every day to reach audiences, and yes, get paid. The open Internet also lets artists and independent labels of every conceivable genre compete alongside the biggest companies. So, what’s the problem? Well, Internet Service Providers (ISPs) like Comcast, Time Warner, AT&T and Verizon have for years been trying to charge content providers extra for the faster delivery of their sites and services. You know who can be counted among “content providers?” Musicians and independent labels.

On the surface, this might not seem like a big deal. But over time, it could mean that only the best-funded projects have any real shot at reaching audiences. That would put millions of artists at a disadvantage and be a huge loss to musical diversity. Without basic rules establishing what ISPs can and can’t do, there’s nothing preventing them from slowing down—or even blocking—lawful content based on business (or even political) preferences. That wouldn’t be good.

Two years ago, the FCC issued an Order [PDF] that established basic rules of the road to preserve access and innovation online. Under the rules, wireline networks are required to treat all traffic equally and to stick to reasonable network management practices. The rules apply differently to mobile networks—mobile providers have more leeway to block certain applications or devices. Although the rules are notably lax on mobile networks, the Order was important for establishing basic guidelines to preserve openness and accessibility. Absent these rules, ISPs would have more freedom to do whatever they want. And since there is so little competition in the broadband marketplace, consumers and creators would have few, if any, alternatives.

The FCC’s authority to enforce the Open Internet rules have been contested. Verizon has challenged the FCC rules in court and rumor has it that by fall of 2013 the case will be well under way. Verizon argues that the rules give the FCC unjustified “broad authority” over their pipe—and that the current rules are unnecessary.  Moreover, the company claims that they are entitled to the same First Amendment protections as a newspaper, which suggests that network discrimination is no more harmful than editing an article for grammatical errors. However, recent instances of “application discrimination” in mobile show the importance of having basic rules in place to ensure that the Internet remains a platform for innovation, creativity and entrepreneurship.

Mobile Apps Under Fire?

Last year, AT&T blocked mobile customers from using Apple’s FaceTime, a video chat application pre-loaded on most iPhones, iPads, and Macs. Before 2012, the app was only sanctioned for use over Wi-Fi and wireline networks, but in June of last year, Apple announced that FaceTime would be available for use with mobile data plans. Sprint and Verizon made FaceTime available to customer regardless of their service tier. For AT&T customers however, FaceTime was only available if you were on their “mobile share plan”—customers grandfathered in under “unlimited data” plans could not use FaceTime unless they paid more to switch.

There may be some legitimate reasons for a provider to restrict a service like FaceTime: blocking certain applications may be part of a strategy to ensure that applications and websites are always running smoothly over an ISP’s network. FaceTime requires a lot of bandwidth, and AT&T claims that their choice to restrict the application to certain pricing plans was a “cautious approach” to network management. Public interest groups viewed AT&T’s limits on FaceTime differently—many claimed that AT&T’s actions violated the FCC’s Open Internet Rules that prohibit companies from anti-competitive network management practices [PDF]. Defending their decision to restrict FaceTime, AT&T argued that the Open Internet rules apply differently to pre-loaded applications.

While ISPs have the right to manage their network in order to deliver quality service, application discrimination is potentially harmful to consumers. The Open Internet Advisory Committee’s mobile broadband report [PDF] indicates that for developers, application discrimination could potentially cause more harm than good. If giant companies like AT&T have the power to block applications, developers lose any guarantee that their products will ever be used. Indeed, an absence of “application neutrality” may make it riskier for developers to invest in new services. Some of these services would certainly be useful to musicians. In fact, with applications like Google Hangout being used as a low-cost live performance platform, it’s easy to see how artists could be affected.

New applications for selling music also have the potential to impact how artists generate revenue online. As our Artist Revenue Streams project (ARS) points out, digital services in many cases amount to entirely new revenue streams (even if they don’t yet result in huge paydays). Services like Rhapsody, Spotify, Slacker and Pandora are connecting more listeners to more music everyday, and all have mechanisms to compensate artists. If companies continue to block applications, new platforms for buying and selling music may not get off the ground due to the increased risk of investment.

Mobile applications are also important tools for music marketing and promotion. Musicians are using bandwidth-intensive applications such as Vine and Instagram to connect with fans at a in new ways. Without a proliferation of mobile applications, artists could lose out on ways to express their creative vision and generate revenue from recorded music, concert tickets, merchandise and other goods and services.

The FCC’s rules clearly argue clearly argue that innovation without permission is a key principle of the open Internet. Verizon asserts that the FCC’s policy is ineffective and damaging to future investment. However, without clear neutrality standards, telecom and cable giants may move more and more in the direction of acting as content gatekeepers rather than conduits for creative expression and commerce. That’s why it’s important to keep an eye on the level playing field of the Internet wherever and however musicians and fans connect.

Stay tuned for the next installment in this series, where we’ll look at why mobile spectrum matters to the future music.