What is Net Neutrality?
So, what is Net Neutrality? It’s the idea that internet traffic should be treated in a neutral manner, treating data as data. That your Internet Service Provider (ISP) shouldn’t have the right to prioritise, artificially block, or slow down applications or content. Supporters believe internet traffic should be treated like any other utility in your home (e.g. your electric company provides you with electricity, and doesn’t artificially slow down or block you from using that power to watch TV as opposed to charging your phone).
Whats the FCC’s Deliberating?
In 2015, the FCC took a step towards establishing Net Neutrality by classifying the internet from an ‘Information Service’, to a ‘Telecommunications Service’. The result was ISPs becoming subject to the same oversight as telephone networks. The 2015 classification also meant the implementation of 3 key rules upon ISPs:
No Blocking: The ISP is not allowed to block lawful content or non-harmful devices
No Throttling: The ISP is not allowed to slow down specific applications or services
No Paid Prioritisation: The ISP is not allowed to accept fees for favoured treatment (creating ‘fast lanes’)
The Current Debate
The current argument centres around a proposal by the FCC to revert the reclassification, with a vote taking place December 14th. So, why the controversy? The current classification (Title II) gives the FCC the authority to protect the consumer against “unjust and unreasonable” practices from their ISP. However, this is not the case with its pre-2015 classification (Title I). This proposal has reignited the debate about Net Neutrality with supporters fearing that – without FCC oversight – the internets open and competitive nature could be in jeopardy, with consumers potentially suffering from price gouging and a lack of open access.
What is the argument against Net Neutrality?
Two themes of argument appear in opposition to Net Neutrality, one relates to property rights and the right to distribute, the second regards the free market.
The first argument theme surrounds property rights – that the ISP should have the right to distribute their network as they see fit. From this position, Net Neutrality infringes upon the property owner’s right (the ISP) to do with their network as they see fit, on behalf of a supposed ‘greater good’ for a ‘neutral’ internet. The government’s role shouldn’t be to police whether or not the ISP can prioritise, block or throttle high bandwidth sites as opposed to lower ones. Why shouldn’t an ISP be able to charge more for a site streaming video (e.g. Netflix), than a site displaying text and ads (such as this one?).
This stance however, is like a slightly leaky bucket – it holds water but contains a gaping hole. Net Neutrality simply argues data should be treated as data. This does not mean everyone should pay the same for access, but people who pay for their internet service should pay for the bandwidth and usage they require, not have their service, limited, throttled or blocked by their provider depending on what is accessed. If content is damaging or illegal thats one thing, and ISPs should (and do) have the right to deal with it as they see fit. But, they are paid a fee by the consumer – a fee that they charge to cover maintenance of infrastructure necessary to provide the service and whatever profit they deem fair, as is their right in the free market. However, the contents of the data that they transmit is not theirs to block, throttle or prioritise, they’re transmitting the connection, but they shouldn’t be the masters of its contents. If you are driving and you pay a toll on a road, you’re paying for road maintenance and any profit the company deems necessary, but is the person you paid allowed to control the contents of your car?
The second theme centres on the belief that the current FCC’s classification is an infringement upon the free market, reclassification would open it up again. Some posit the view that – from a free market stance – companies shouldn’t be burdened by government regulations. ISPs aren’t themselves the internet, they act as a gateway to it, therefore if the consumer is unhappy about their service, then they can speak with their wallet and simply change providers.
The trouble with this argument is that it could be doubtful that the free market will protect the consumer as, in the case of broadband internet, there is a severe lack of ISP competition on a local level. For many in the United States, they do not possess much of a choice (or in some cases any choice) in their provider (see below). Although theoretically free market may sound great, it is hindered by the reality of the situation.
Graphs below – provided by broadbandmap.gov – shows quantity of competition in ISPs
Why is Net Neutrality important?
To Prevent Price Gouging
The price gouging fears originate from the presumption that relaxed oversight on blocking, throttling or paid prioritisation could lead to ISPs profiting from popularity. Discriminating, not on data usage, but what it is used for (e.g. Facebook, Amazon) might lead to ISPs charging the public extra to ensure access to non-artificially blocked or throttled access to popular sites. Alternatively this could manifest through the cost becoming passed onto the site in question (e.g. Netflix), but this cost in turn could be placed once more in the lap of the consumer (e.g. higher subscription fees).
Net Neutrality proponents fear reclassification could jeopardise the internet’s open and competitive nature. Consumer advocates and mid-sized businesses have come out in support of Net Neutrality because of its ability to preserve a free market where the best product wins. Over 800 startups have signed a recent letter to the FCC chairman Ajit Pai stating that they “depend on an open Internet—including enforceable net neutrality rules that ensure big cable companies can’t discriminate against people like us”. There is a fear that a lack of oversight could lead to ISPs possessing undue interference, with an ability to “pick winners or losers in the market”,”impede traffic from our competitors in order to favour their own services or established competitors”, or inhibit consumer choice through the imposition of “new tolls”.
‘Cord-cutting’ has risen in recent years, with many consumer opting for on-demand streaming services (without advertising) as opposed to cable TV. Variety quoting projection that 22.2 million US adults will cancel traditional pay-TV by the end of 2017. Many ISPs have skin in the cable TV game, and ‘cord-cutting’ puts them in a fearful position for their bottom-line. Therefore there’s a worry – without oversight – that there is a financial incentive for ISPs to artificially block or throttle the steaming services, make these services less desirable, and so stifle their competition to TV packages (provided by those same ISP cable operators) on the free market.
In a similar vein, this fear transfers to online competition in on-demand services. Many ISPs have started to provide their own on-demand resources (or have parent companies with shares in some streaming services) in direct competition with others (e.g. Netflix). Again, the trouble rests in that, without the consumer protection from the FCC there is an incentive to prioritise their own service through the artificial blocking or throttling of their competition.
Avoiding Pay to Play
Lastly, Net Neutrality proponents fear ISPs paving a ‘play to play’ path, hindering the internet marketplaces’ diversity. A system whereby disproportionate levels of influence are wielded by companies with the financial ability to artificial barriers for un-throttled or unblocked internet service, stifling the innovation and competition that should be available on a fair and open internet. This potentially sending a shockwave to the future of the technology industry and the thriving nature of Silicone Valley. Could Facebook have been able to rise up to the tax dodging giant it is today if a competition like MySpace were able to purchase the ability to have unhindered internet speeds and Facebook was artificially hindered? Could the next Facebook, the next Netflix, or even the next idea we can’t conceive but exists as a thought bubble within the mind of a little girl in Arkansas be hindered by ISPs smothering the free market? Artificial barriers erected by ISPs could create a sad state of affairs for the internets diversity.
The Reason to Doubt Reclassification
Resistance to reclassification (and in favour of Net Neutrality) isn’t a house built on sand, but upon prior instances of such ISP interference which fan these flames of fear. Before reclassification in 2015 there are multiple examples of ISPs encroaching on the internet’s fair and open nature. From 2011 to 2013, AT&T, Sprint, and Verizon were involved in blocking Google Wallet due to its near identical nature to Isis (not that one) a mobile payment service they’d created with Discover and Barclays. In 2012, AT&T tried blocking users from use of the FaceTime video chatting service in iPhones unless they were on a more expensive text-and-phone plan. Additionally, in 2014 Verizon and Comcast were caught throttling Netflix services seeking payment from the company.
Although FCC Chairman Ajit Pai has called these “isolated cases”, such examples show a pattern of monopolistic past behaviour, and an indication of future potential. The issue held by Net Neutrality proponents, is that without the oversight to ISP power, instances such as these could occur once more – directly impacting the online marketplace and the wallets of the consumer.
The FCC Response
In response to the criticism raised, the FCC released a series of statements in a ‘Myth vs Fact’ sheet on Net Neutrality. In it, the FCC argued that ISPs wouldn’t charge a premium to customers to reach certain online content, claiming they didn’t before 2015’s “heavy handed regulations” and “won’t after they’re repealed”. There are two issues with this statement however. Firstly, I’ve pointed to clear instances in which they have done exactly that, blocked or throttled access. Secondly, to say nothing went wrong before, and stating this therefore means nothing ever will, is similar to the logic of a naïve small-town policeman at the start of a horror movie. If Ajit Pay genuinely feels a company would voluntarily restrict itself, and therefore its bottom line, as opposed to doing what (as is the purpose of the company) attempting to make money and maximise its profit, then he is as naïve as little Georgie in the recent movie ‘IT’, sticking his arm out to ISPennywise in his little yellow raincoat and hoping the rabid clown(s) won’t bite the hand that feeds them. He’s putting a lot of faith in self-regulation, and the likes of AT&T, Verizon, and Comcast aren’t exactly known for always being on their best behaviour.