Unless you’ve been hibernating for the last few years, net neutrality is undoubtedly a term that keeps popping up in your Facebook timeline and daily news updates. Net neutrality may be perceived as a loaded topic; indeed, the close ties of the issue to politics might cause you to avoid the subject in casual conversation. But net neutrality is a hotly contested topic for a reason: it has the potential to drastically affect both consumers and businesses alike, depending on how the debate pans out.
For those of you still asking yourself, “But what is net neutrality?“, let me break it down. Put very simply, net neutrality is the concept that all internet traffic should be treated equally. Coined in 2003 by Columbia law professor Tim Wu, net neutrality stems from the idea that a public information network like the Internet is most useful if all of the content, websites and platforms on said network are treated equally.
More specifically, net neutrality is meant to prevent large Internet service providers (ISPs) from slowing down sites or content from their competitors and privileging their own content to increase their revenue.
If you need a more concrete example of what net neutrality seeks to prevent, Wired’s Klint Finely explains:
“[Because of net neutrality regulations,]… your Internet provider can’t slow your Amazon Prime Video stream to a crawl so you’ll keep your Comcast cable plan, and your mobile carrier can’t stop you from using Microsoft’s Skype instead of your own Verizon cell phone minutes.”
In the telecommunications industry in particular, net neutrality is an increasingly relevant (and enduringly touchy) topic of discussion. It is prudent, then, to delve into the nuances of net neutrality and get to know net neutrality from both sides of the debate. Let’s take a look at how the outcome of the net neutrality decision — whatever outcome that may be — will affect those in the telecommunications space, as well as the everyday consumer.
In February 2015, the Federal Communications Commission (FCC), led by Chairman Tom Wheeler (D), classified broadband as “telecommunications”, superseding the previous classification of broadband as a less-heavily regulated “information service.”
Under Title II of the Communications Act, the FCC has the authority to prevent large ISPs from blocking, throttling or privileging content/services for any reason.
Ajit Pai, the current chairman of the FCC, wants to reverse the 2015 decision that re-classified Internet Service Providers as “common carriers”, a classification that subjected them to regulation by the FCC per Title II of the Communications Act. If Pai is successful and Title II is overturned, broadband providers would be re-classified as “information services”, giving larger ISPs free reign to function without being subjected to regulation by the FCC.
Long story short: the issues boils down to whether or not broadband is an information service or falls under the category of telecommunications as a “common carrier.” If broadband is understood as an “information service”, as Ajit Pai argues, then large ISPs are out of reach from any regulation by the FCC. If broadband is understood as a telecommunications common carrier, as they are currently classified under Title II, then the FCC has the ability to step in if large ISPs abuse their power to privilege their own content/services to further their fiscal interests.
What is Title II?
If you’ve been paying attention to the net neutrality debate, you’ve undoubtedly heard of Title II of the Communications Act, which is the crux of the net neutrality issue. Title II, at a very basic level, seeks to promote competition in broadband access and prevent large, powerful ISPs from inhibiting the functionality of Internet newcomers or startups, thereby preventing small or new sites from competing in the market.
Title II plays a key role in net neutrality, but its scope goes beyond just net neutrality. Title II seeks to curtail anti-competitive conduct from large common carriers (Comcast, AT&T, Verizon, etc.). Title II wants to ensure that these “common carriers” can’t use their power to control the Internet experience or harm their competitors in the broadband market.
From a net neutrality perspective, Title II matters because if Pai is successful in reversing the 2015 net neutrality decision, the following core provisions of the Communications Act will be affected:
- Section 251: requires broadband providers to interconnect with other market players to prevent a large broadband provider from denying access to the network by denying physical connectivity. For example, Comcast can’t deny access to Netflix content because it competes with their own interests.
- Section 224: ensures that every broadband provider has the legal right to gain access to the physical telephone poles that run along our roads. Before section 224 was in place, there was a dispute between Google and AT&T when Google Fiber deployment ran into trouble in Austin, TX, because AT&T (who owned the poles in Austin) physically prevented Google Fiber’s entry into the Austin market.
- Section 222: ensures broadband users have a legal right to privacy when using broadband communications. Without section 222, it becomes unclear as to what ISPs can legally do with consumer data.
A Brief History of Net Neutrality
In 2015, the institution of Title II by the Federal Communications Commission (FCC) ensured that ISPs could not block, impair or favor legal content over their networks, except when it comes to optimizing network performance. As it stands now, net neutrality rules currently only apply to consumer and small business broadband internet services. Enterprise service offerings like VoIP and MPLS, as well as content delivery networks (CDNs) and Internet peering, are out of the scope of the net neutrality regulations.
However, while 2015 marks a crucial moment in the history of net neutrality, the debate around net neutrality dates a bit farther back.
Net Neutrality Regulations as They Stand Now
The current net neutrality regulations touch three different areas: which internet service providers are subject to the regulations, which Internet data is or isn’t in the scope of the regulations and what the ISPs are allowed to do with said data.
Which ISPs are subject to Net Neutrality regulations?
Under current net neutrality regulations, common carriers are subject to regulations from the FCC. These regulations prevent common carriers (which currently includes Broadband ISPs) from making “any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services.”
What Internet data is within the reach of Net Neutrality regulations?
Currently, Broadband Internet Access includes fixed and mobile services that allow access to “substantially all Internet endpoints”. Specialized services at the application level (like IoT devices including e-readers, health monitors and VoIP/IP-video) are outside of net neutrality rules. Enterprise services like IP VPNs, MPLS circuits, CDNs and internet exchanges are also exempt.
What can Internet providers do with data?
Current FCC rules state that ISPs may not block access to legal content, applications or services. Additionally, ISPs may not throttle (i.e. impair or degrade) the performance of non-threatening Internet traffic. Finally, broadband providers may not favor certain Internet traffic over other traffic.
Net neutrality is a controversial topic for a few reasons. The first pertains to market power, as people question if ISPs should have the market power to set prices and favor their own content.
The second facet of the issue relates back to money. How should market participants pay for infrastructure investment?
The third issue with net neutrality is the opportunity for innovation and growth. Will net neutrality rules ensure that market newcomers and small startups or apps have a chance to grow without interference from industry giants?
Finally, there’s the issue of whether or not the government should even be allowed to regulate the Internet. Should the onus lie on ISPs to self-regulate and hold themselves accountable to adhere to fair business practices?
Making the Case for Net Neutrality: Why We Need to Maintain Title II
With the many recent vertical/horizontal integrations in the broadband market (Comcast & NBC Universal, AT&T & Time Warner, etc.), proponents of net neutrality believe ISPs will begin charging content providers for privileged access on their networks. This could cause ISPs to favor their own content companies and block access to competitor networks during contract disputes.
As such, net neutrality proponents fear that this will force the financial burden of higher content costs onto consumers. In a situation like this, content creators will pay ISPs to privilege their content, leading to raised costs for the consumer and increased profit for the ISP.
Many who support net neutrality argue that by maintaining Title II and current regulations, we are protecting the interests of small businesses and upholding the free market economy. As Ernesto Falcon argues for the Electronic Frontier Foundation concerning the aforementioned dispute over telephone pole access for Google Fiber in Austin, TX, between Google and AT&T:
“If a company the size of Google could be stifled without the law supporting them, what hope does a smaller ISP have in entering into a market where the incumbent broadband provider owns the poles that are necessary to deploying the network?”
Finally, proponents of net neutrality cite the failure of ISPs to self-regulate in the past (looking at notable examples like the Comcast/BitTorrent dispute) as evidence that a governing body like the FCC should step in and ensure that ISPs are treating content equally, regardless of their personal investment and interests.
Making the Case Against Net Neutrality: Why We Need to Reverse Title II
As is the case with most things in life, there are two sides to the net neutrality story. On the market power front, opponents of net neutrality argue that ISPs are subject to significant competition, which inherently limits their ability to set prices for access. Additionally, major content creators like Netflix and Amazon are large businesses themselves that are capable of negotiating deals on their own interests. Not to mention the fact that over-the-top (OTT) apps like Netflix, Skype and Google Voice that function via wifi “over the top” of mobile networks are significantly hurting carrier revenue, forcing mobile operators to scramble for new ways to turn a profit.
ISPs need to earn revenue in order to enhance their infrastructure investments and increase network capacity and performance. Opponents of net neutrality argue that these regulations block a crucial revenue stream for ISPs and could degrade the quality of service offered to consumers.
Furthermore, opponents of net neutrality believe that large content creators like Netflix, Hulu and Amazon already hold the upper hand in deploying CDNs, which is ultimately beneficial to customers. Net neutrality might obstruct potential innovation in the form of zero-rated data consumption offered by ISPs.
As for regulatory effectiveness, net neutrality opponents maintain that there was little discrimination from ISPs before net neutrality rules were put in place. As such, opponents believe these regulations are unnecessary, overly complex and heavily regulated simply for the sake of regulation.
Net neutrality is neither a simple nor straightforward issue. As such, the solution to the net neutrality issue is bound to ruffle some feathers regardless of the outcome of this debate. Though it remains to be seen what the outcome of this net neutrality debate will be, one thing is for certain: the implications of the net neutrality decision will have a widespread effect in America, from the average citizen to the large corporation.
Sources http://searchtelecom.techtarget.com/definition/broadband  https://www.theverge.com/2017/4/11/15258230/net-neutrality-privacy-ajit-pai-fcc  http://searchwindevelopment.techtarget.com/definition/ISP  https://arstechnica.com/information-technology/2017/06/to-kill-net-neutrality-rules-fcc-says-broadband-isnt-telecommunication