The Importance of Net Neutrality

On Wednesday, March 6, 2019, the House introduced the “Save the Internet Act” to protect the concept of net neutrality. Here we will outline what net neutrality is, its past, future, and where some focus may be a bit misguided.

What is Net Neutrality?

Let’s start with a simple explanation: Net neutrality is the idea that internet service providers (ISPs) should treat all forms of internet traffic equally, no matter the content.

In practice, this means ISPs like Comcast, Optimum or Verizon cannot speed up their own content while slowing down competitors’ sites. Nor can they charge a service like Netflix additional fees to ensure their customer’s videos aren’t slowed.

In 2015, after a heated debate, the Federal Communications Commission adopted the concept of net neutrality in a set of rules called the Open Internet Order.  Siding against the rules were major ISPs while those in support included consumer advocacy groups as well as companies like Google, Netflix, and Amazon. In the end, it was decided that the internet should be reclassified as a “common carrier” and treated in a similar manner as a public utility, i.e., as something Americans require. Categorizing the internet as such meant ISPs would be subject to regulations to ensure they played by the rules.

Some History

On April 3rd, 2017, President Trump signed a bill into law that reversed the Federal Communications Commission’s (FCC) broadband privacy rules. The original rules, which were signed under the Obama administration (but never took effect), would have required internet service providers to get a customer’s permission before sharing information about them, including their browsing history. Now, the House wants to reverse the Trump administration’s decision and bring those consumer protections back as well as restore official net neutrality rules.

Back in 2017 when the original rules were reversed, companies like AT&T and Verizon were quick to stress that is not their policy to sell browsing histories and that they have no plans to do so in the future. Supporters of the privacy rules, however, are hesitant to take the companies at their word without formal rules to abide by.

That particular debate warrants its own post, but for today it merely sets the stage for an examination of the privacy rules’ precursor, net neutrality.

The FCC’s Stance on Net Neutrality

With the Trump rollback of the FCC’s internet privacy rules back in 2017, net neutrality has been at risk. The FCC’s head, Ajit Pai, a former Verizon attorney appointed by Donald Trump, has made it clear that he intends to take on the topic. In a statement released after Trump overturned the internet privacy rules, Pai said:

“The Federal Communications Commission will be working with the Federal Trade Commission to restore the FTC’s authority to police internet service providers’ privacy practices… And we need to end the uncertainty and confusion that was created in 2015 when the FCC intruded in this space.”

In the context of net neutrality, that statement is telling. When enacted, the net neutrality rules gave the FCC oversight, so in order to restore the FTC’s authority, the Open Internet Order would have to be overturned. Repealing the Open Internet Order would be no easy task and may take years to accomplish, but it is well within Pai’s power.

Pai’s comments are also in line with the White House’s views on net neutrality.  During a press conference on March 30th, 2017, then Press Secretary Sean Spicer made it clear that Trump wished “to reverse [the FCC’s] overreach,” giving every indication that net neutrality will be on the chopping block in the near future.

What Are the Pros and Cons of Net Neutrality?

Depends on whom you ask.

Internet service providers argue that the internet works just fine with little regulation and that new rules would stifle investments to improve their services. In addition, ISPs believe that since they spent the money to set up the network, they should be entitled to recoup some of the costs from the biggest data hogs.

Supporters of net neutrality, on the other hand, insist formal rules are necessary to maintain equal-access to the internet. They also argue that the rules prevent unfair competition. For example, Netflix may be able to pay an ISP additional fees to ensure their content is never slowed, but a small start up may not be able to do the same, creating an unfair advantage for Netflix. These so-called “fast lanes” would allow ISPs to prioritize certain types of content over others, reducing competition.

Arguments from both sides seem to have merit, but before exploring them further, let’s provide some background on how the internet works and clear up a key question:

Can the Internet Really be “Neutral”?

In reality,  the internet as it exists now is not neutral and hasn’t been for a while. Internet behemoths like Google and Netflix, which account for a disproportionate amount of internet traffic, typically set up their own own content delivery networks, or CDNs, directly within ISPs’ networks. It’s a mutually beneficial arrangement, often provided for free: Netflix keeps their videos from stuttering, and ISPs have some of the load taken off of their networks. And both get to keep their customers happy with quicker speeds.

It can be argued that these CDNs are actually the “fast lanes” supporters of net neutrality rally against. They do, after all, give companies with deeper pockets a leg up on new competition. However, these arrangements are warranted by the sheer amount of traffic these sites generate. In fact, CDNs are a fundamental piece of the internet’s “backbone” today, and by freeing up bandwidth, actually benefit smaller sites as well. In this regard, ISPs are correct- the internet has succeeded just fine so far, albeit in an open market assisted by tech giants taking on some of the bandwidth burden.

It’s easy to get distracted by the “neutral” part of the argument as it relates to how the internet is set up. If the internet isn’t neutral now yet still works, why implement rules? The reason consumers should care now is due to what the future may entail.

Competition & Regulation (Or Lack Thereof)

The problem occurs when ISPs become large enough to monopolize that market and control the price for high speed access. Every year, the number of providers across the country shrinks through mergers and acquisitions, leaving only a handful of major internet companies. Often, consumers do not have more than a single option when it comes to choosing their internet provider, which means web companies like Netflix do not either. With little to no competition, ISPs could pick and choose which CDNs they allow, or even create and sell their own (something Comcast is already experimenting with). Unlike the other “fast lanes” mentioned earlier, these would be completely under the control of ISPs.

A common argument from ISPs during the initial net neutrality debate was that the FCC was creating solutions to a problem that didn’t exist. Internet providers didn’t play favorites with the content of their networks, they promised. Unfortunately, we need look no further than the wireless industry to see how quickly that promise can be broken.

Many wireless carriers now offer plans that favor their own services over competitor’s, testing the limits of the net neutrality rules. Verizon Wireless, for example, allows users to watch as much video as they please via their Go90 app without that data counting against their monthly limit. AT&T has a similar promotion with their DirecTV app. Such practices are known as zero-rating, or sponsored data. In essence, they’re charging for competitor’s content while giving theirs away for free, actions that fly directly in the face of the Open Internet Order rules.

This is where the fundamental principle of net neutrality come back into play.  By classifying broadband internet providers as “common carriers, the FCC’s 2015 rules allow the type of oversight necessary to protect consumers from such situations.

In January of 2017, a week before leaving his position as chair of the FCC, Tom Wheeler sent a letter to Congress stating that both Verizon and AT&T’s zero-rated plans were in violation of the 2015 Open Internet Order. Fortunately for Verizon and AT&T, however, Donald Trump’s pick for the FCC, Ajit Pai, was not as interested in pursuing the matter. On February 3rd, the FCC announced they were dropping the investigation; another indication that net neutrality may soon be a thing of the past.

Moving Forward

With the Trump administration in place, internet providers are confident the FCC won’t take any action against them and are already showing a willingness to flout the rules. Their actions make the case for FCC oversight through net neutrality rules.

In addition, the FCC and Washington should be encouraging competition among ISPs and preventing local monopolies. Without government action, there’s little incentive for these companies to stop consolidating their strangle hold over the market. Sure, competition is not a catch-all solution, but it will certainly improve the industry by encouraging innovation, allowing open access and lowering prices for consumers.

By its very nature, the internet as a network may never be perfectly neutral, but oversight will be required to keep the playing field as level as possible for both consumers and companies. The internet has simply become too integral to daily life to let a few companies control it.

Net neutrality rules benefit all websites, from powerhouses like Facebook down to simple political blogs. And since you’re viewing this on the internet, these orders apply to you as well. Democrat, Independent, Republican- everyone should make their voices heard to maintain these rules.

Below are contact numbers for the FCC and its chairman:

Toll-Free Phone:
1-888-CALL FCC (225-5322)

Ajit Pai, FCC Chairman

Full FCC Contact Information

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