The Federal Communications Commission is all up in internet providers' business lately. Last week the FCC voted 3-2 to reclassify "broadband Internet" as speeds that are about 6 times faster than the current minimum standard.
The FCC said in a statement that the current minimum broadband standard speed of 4 Mbps download and 1 Mbps upload is "dated and inadequate." And they should know -- they set the standard back in in 2010.
But the new reclassification doesn't actually increase anyone's Internet speeds, so why change the definition at all?
Technically, you may not have broadband anymore
The FCC wants to strongly encourage Internet providers to beef up their speeds. Under the new standard about 55 million Americans -- about 17% of the population -- don't have access to a broadband connection. And that includes many DSL customers.
Most DSL connections fall well below the new 25 Mbps download broadband speed standard, which is likely to leave both Verizon Communications (NYSE:VZ) and AT&T (NYSE:T) upset with the latest ruling, considering that AT&T has about 4 million on DSL and Verizon has about 2.6 million.
One reason the FCC wants to nudge Verizon, AT&T, Comcast (NASDAQ:CMCSA) and others to increase Internet speeds is because the U.S. falls below many other countries in Internet speeds. The latest data shows the U.S. taking the No. 14 spot in Internet speed worldwide.
But one of the biggest implications of the FCC's recent change will be on the proposed merger between Comcast and Time Warner Cable.
Right now, Comcast has about 35% of all broadband subscribers in the U.S., but with the new broadband classification the company will have much more.
And that's exactly what the FCC doesn't want. In a speech late last year, FCC Chairman Tom Wheeler said, "Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy."
For its part, Comcast has stressed that the reclassification won't change the proposed deal. But that doesn't seem likely. A merger would simply give Comcast too much control over millions of broadband connections, and leave less room for more Internet competition.
Not a done deal either way
While the new FCC standards could hurt the proposed Time Warner Cable and Comcast merger, it doesn't mean they'll eliminate it.
First, the FCC has to decide whether or not a possible merger is in the best interest of the public. If it says it's not, then it'll be hard for it to pass. But even if the FCC agrees to a possible merger, the Department of Justice could step in and rule against it under antitrust grounds.
For American consumers, the new rules mean Internet providers have just a bit more incentive to increase their speeds. And that -- along with Google Fiber inching into more broadband markets -- ultimately means our Internet speeds should start ratcheting up in the near future.