The Silent Net Neutrality Revolution and You

By Wayne Yu

From The Matrix

You may have heard that the FCC is changed the rules on the Internet. What will this mean for you?

After a barrage of lobbying efforts stemming from a serious divide in opinion in the business community, the Federal Communications Commission (“FCC”) voted Thursday on the future of Internet access.

Previously, in 2010, the District of Columbia Circuit Court of Appeals struck down the FCC’s proposed net neutrality rules, which misclassified Internet Service Providers (“ISPs”) as an “information service,” as opposed to a “telecommunications service.” The misclassification was vital, as “information services” are not as susceptible to regulation as “telecommunication services.” Now, current FCC Chairman Tom Wheeler is set to unveil a new proposal, which reclassifies consumer broadband Internet as a “utility” under Title II of the Communications Act, thereby preventing ISPs from charging content providers for more reliable Internet access.

The concept of “network neutrality” underscores that all Internet data should be equal, and that ISPs should not be permitted to charge different companies more or less for their data usage. In essence, the debate over net neutrality is best understood in terms of whether Internet access is more like access to electricity, or more like access to cable television services. The economic arrangement for electrical services is quite simple, individuals pay utility companies money, and utility companies provide individuals with electricity. In this type of arrangement, the electric companies have no power, influence, or knowledge of how or what the electricity provided is used for.

In contrast, the opposite is true for cable services. Comcast, a cable service provider, offers a variety of packages from which individuals may choose, each with a different mix of channels and programs. Extensive cable service is considered to be a “discretionary good,” and thus cable service providers have great discretion in both their mix of offerings / packages and pricing of services. In this type of arrangement, cable companies influence to a certain degree the final utilization of the goods and services that their customers receive.

Opponents of net neutrality view the Internet more like access to cable television services, and thus are strongly opposed towards the government regulating ISPs as utilities. These opponents, which include Verizon, Comcast, TimeWarner, and AT&T, claim that the Internet will be a “richer experience” if profit motive applies. If the U.S. government were to become the Internet “traffic cop,” ISPs would lose their incentives to continue investing to improve networks and expand into new areas with little or no high-speed access. Accordingly, this would result in fewer innovations and threaten millions of jobs. Furthermore, ISPs argue that it would be unfair to enact regulations preventing them from recovering the extra costs incurred for connecting certain “broadband hogs” such as Netflix, whose service generates about “one-third of U.S. online traffic” during the evening hours on weekdays. In addition, net neutrality critics contend that strong net neutrality rules and regulations would lead to increased government surveillance, along with further unnecessary government bureaucracy and meddling.

Proponents of net neutrality view the Internet more like access to electricity, and thus are in favor of the government regulating ISPs as utilities. Advocates of net neutrality include companies like MLB, Netflix, and Google. Advocates of net neutrality believe that rules and regulations are necessary to preserve a “free and open” Internet that gives all individuals the same access to “any website hosting legal content, including video, music, photos, social networks, email, and maps.”

The adoption of rules and regulations would prevent powerful online service providers like Comcast, Verizon, and TimeWarner Cable from controlling Internet traffic in a way that best suits their own financial interests. Without net neutrality, ISPs could establish a two-tier system that funnels Internet traffic into fast and slow “lanes”, thus enabling ISPs to “throttle” access to certain services and sites. As a result, only the richest companies would be able to pay the extra “tolls” to guarantee that their online content remained accessible through such “fast lanes.” Accordingly, ISPs would stand to gain an economic windfall, as the additional costs incurred for such fast lanes would be passed onto consumers in the form of new fees and charges. Under such circumstances, the Internet would no longer serve to “enhance the freedoms” for all.

In the battle over net neutrality, the FCC has tried to implement and impose rules and regulations for over the last half-decade. Ultimately, the new FCC rules reclassifying ISPs announced on Thursday will change the internet forever.