Net Neutrality and the Future of the Internet

The issue of Net Neutrality affects more than just the amount you might pay for access to the Internet. It has implications for the future of the Internet and the economies that rely on the Internet.
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What is Network Neutrality?

Network Neutrality, or Net Neutrality, is the principle that all data on the Internet should be transmitted the same regardless of content or origin. This means that currently, your Internet Service Provider (ISP) treats the relatively small amount of data required to check your email the same way it treats the large amount of data necessary to stream a video. Often, your ISP is the same entity as your cable company provider (Verizon, Comcast, Charter, etc.) If Net Neutrality didn't exist, your ISP would be free to change the speed at which you can access certain content, or block it all together. The process for selecting an Internet package might look like this.

The issue of Net Neutrality affects more than just the amount you might pay for access to the Internet. It has implications for the future of the Internet and the economies that rely on the Internet. For example, in 2004, MySpace was the dominant social networking site. If Net Neutrality did not exist in 2004, users who liked MySpace would pay for faster access to that site. As a result, the fledgling website created in a Harvard dorm room we now know as Facebook would have suffered comparatively slower speeds. Since the initial Facebook experience (like many start-ups) was subpar, it likely would not have become the economic giant we know today. In this scenario (without the existence of Net Neutrality), the launch of Google+ in 2011 could also have transpired very differently. Since it is backed by a billion-dollar corporation able to pay for faster access, Google+ could have rapidly dominated the social media market. The current practice of Net Neutrality has allowed a free and fair competition in the digital marketplace.

Net Neutrality also promotes American infrastructure development, which is vital to our national economic interests. In a similar way to the evolution of cell phone network speed in recent years (2g, 3g, LTE, etc.), Internet Service Providers compete for customers by expanding their networks and providing faster, better Internet connections. Without Net Neutrality, the economic incentive to improve infrastructure would be removed. In fact, it could manifest as a disincentive to infrastructure development and innovation, since ISPs could alternatively focus on encouraging users to pay more to access certain sites at current top speeds, while effectively "slowing down" or prohibiting access to others.

What happened to Net Neutrality?

The Federal Communications Commission (FCC) has the authority to govern communications networks like broadband Internet under the 1996 Telecommunications Act.

In the 1990s, most Internet access came in over the phone lines and the law treated the Internet as a "telecommunication service." This meant that the rules that applied to the Internet were covered under Title II of the Telecommunications Act. Under Title II, the FCC had the authority to mandate Internet companies to treat all data equally. At that time, it was treated similarly to phone lines, where phone calls were received first-come, first-serve.

By 2002, residential Internet access was delivered by cable and it was called broadband. The FCC decided to regulate broadband as a Title I "information service." This was a controversial decision and lawsuits were filed. Ultimately, the Supreme Court ruled that the FCC had the final authority to determine how it would classify (and regulate) broadband Internet access. At the time, the court did not decide on the merits of Net Neutrality.

The Internet community continued to push and in 2005, the FCC adopted a set of openness principles designed to protect Net Neutrality. However in 2010, when the Commission moved to codify these guidelines, Verizon filed a lawsuit. Verizon argued that under Title I, the FCC did not have the legal authority to make these rules.

In January of this year, the Court of Appeals for the District of Columbia ruled in favor of Verizon. The court declared that the FCC could not use Title II rules to govern Title I broadband. As a result, the rules that would have protected Net Neutrality were stricken.

Why am I hearing that the FCC just killed Net Neutrality?

When the court issued its ruling in January, it didn't rule against Net Neutrality specifically. The court only said that FCC's legal rationale for the rules was invalid. The court even recognized FCC's authority under Section 706 (of the 1996 Telecommunications Act) to act on a case-by-case basis to promote broadband deployment. It was up to FCC to decide how to move forward.

Last week, the media began to report on FCC Chairman Tom Wheeler's new proposed rules. The specifics have not been released yet, but according to the news reports FCC will allow ISPs to negotiate individualized discriminatory deals with different websites and Internet services (like Netflix). Tiered Internet would exist with both the Internet services AND the ISPs broadband customers could be forced to pay for access and faster speeds.

The FCC says now that it would use its authority under Section 706 to ensure that the ISPs charged a "fair price" on these new tolls. The 5-person FCC is scheduled to vote on this proposal on May 15, 2014.

Some have suggested that the Chairman's proposed rules protect the Internet to the extent permitted by the court's ruling in January. That's not true. The FCC has better legal authority it could use, and the court's ruling recognized that. Instead of working to protect an Open Internet for real, Chairman Wheeler's compromised proposal would end Net Neutrality and represent a fundamental change in the nature of the Internet and its economies.

What can we do to get Net Neutrality back?

In 2002 the Supreme Court ruled that the FCC has the authority to classify broadband under the 1996 Telecommunications Act. The FCC can simply vote to reclassify broadband as a Title II "telecommunications service" and enact rules to protect Net Neutrality.

Why doesn't the FCC just reclassify?

That's a good question. President Obama claims to support Net Neutrality, as does the Chairman of the FCC, Tom Wheeler. Mr. Wheeler has enormous power and authority to lead the FCC toward the reclassification of broadband, or preside over Net Neutrality's funeral.

Who is Tom Wheeler?

Mr. Wheeler is a former lobbyist for the cable industry. He was previously the President of the National Cable Television Association and the CEO of Cellular Telecommunications & Internet Association, and he has been inducted in to the Cable Television Hall of Fame and the Wireless Hall of Fame. Mr. Wheeler's immediate predecessor now works for the Carlyle Group, and a former FCC Chairman (who presided over the 2002 decision to classify broadband as Title I) is now a lobbyist for the cable industry. In addition to senior leadership, staff at the FCC routinely work for the industries they regulate.

What do Internet companies think about all this?

This is an uncomfortable subject for many companies because their economic interests do not match their publicly portrayed values. Websites and companies like Facebook, Google, and Netflix have all benefited greatly from Net Neutrality. However, now that these corporations are big enough to pay the ISPs for faster service, the end of Net Neutrality would severely inhibit their competition, effectively locking-in their market share in the Internet economy.

What can I do?

The FCC will meet to decide the future of the Internet and Net Neutrality on May 15, 2014. The next two weeks are critical for Internet users to participate in the process. Sign a petition, call your member of Congress, tweet, or organize your own lobbying meeting.

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