What is Net Neutrality?

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For the past decade, one of the most important concepts for understanding the future development of the Internet has been “net neutrality.” That single term has become very polarizing, though, with most technology companies and free speech activists in favor of net neutrality, but most internet service providers (especially the cable companies) and free market champions against net neutrality.

The core underpinnings of net neutrality

At its core, net neutrality is simply a principle for determining how data, information and content should flow across the internet. Net neutrality says that internet service providers should enable access to all data and information regardless of the source AND without favoring or blocking particular content or websites.

That sounds simple enough and also sounds remarkably free, open and democratic. It means that a blogger working from home in Kansas City has the same access to the internet as a huge Wall Street corporation in New York City. It means that all data and information travels at essentially the same rate across networks, so there’s no “discrimination” against certain types of content. And it also means that internet service providers don’t have a way to play favorites – they can’t choose to favor the streaming video content of one provider over another, for example.

From this perspective, internet service providers are essentially utilities that are regulated by the government to make sure that everybody plays by the same rules. And, in many ways, that’s what internet service providers have become – they build “pipes” into your home and provide an essential service, just like utilities. And, just as it inherently sounds unfair to you if certain neighborhoods or certain cities receive “better water” or “better electricity” than others, it also sounds inherently unfair if certain people or certain corporations receive “better Internet” than others.

The case for net neutrality

It’s easy to see, then, why many free speech activists support net neutrality – it corresponds to everything that they hold dear about free speech, freedom of expression and the fairness of the overall democratic system. When the internet was originally created, it was designed to enable maximum openness, transparency and freedom of access.

And it’s easy to see why technology companies are, in general, in favor of net neutrality. It means that Google doesn’t have to worry about Yahoo getting some kind of unfair edge by simply paying internet service providers an extra fee every month for faster search results. It means that Netflix doesn’t have to worry about some other streaming service – say Hulu or Amazon Prime Video – getting some kind of unfair advantage by having their video content delivered faster to consumers as the result of some kind of backroom arrangement made with the biggest internet service providers.

The case against net neutrality

However, champions of the free market don’t see things the same way. They focus on factors like competition, innovation and regulation. They see net neutrality as a way for the government to take over the internet from private companies, just as the government tried to take over healthcare from private companies. They see a distorted situation where a few big monopoly players control the entire market, thereby lowering competition. And they see government regulation stifling innovation. Just ask yourself the following question: How “innovative” is your local water utility?

And, of course, the biggest internet service providers are not in favor of net neutrality. In the eyes of many, that makes them the “bad guys.” However, the big internet service providers complain about network congestion and all the costly workarounds needed to make the system work.

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The popular example they often invoke involves traffic and highways. The internet is the Information Superhighway, right? Well, the problem is that we are simply creating too much data for current networks to handle. A decade ago, there was a notion that internet broadband was basically unlimited, and that once the pipes were built, there would never be a need for much more broadband capacity. But then along came video, which places a huge strain on any network and any device. (Just think of your smartphone – chances are, it’s busting through its storage limits because of all the photos and videos you’re storing there!)

What the internet service providers are saying is that there has to be some way to reduce all the congestion. Going back to the highway example, that’s why some cities build toll roads – to reduce the congestion on major highways. That’s why some cities are exploring “congestion pricing” to make it cheaper to travel on roads during non-peak hours. And that’s why highways have slow lanes and fast lanes – there’s inevitably going to be some traffic that needs to get places quicker and faster than other traffic.

Net neutrality in the era of Trump

The reason why net neutrality is once again in the headlines in 2017 is because there’s a new Trump administration. The FCC, which regulates internet service providers, currently classifies them in a certain way (as “common carriers”) so that they can regulate them just like utilities. However, with a new administration comes a new head of the FCC, and that means a chance to revisit the topic of net neutrality.

If you’ve been following the changes afoot in the Trump administration, you can immediately recognize why net neutrality rubs some people the wrong way. The Trump team is pro-business and anti-regulation, and so this seems like a great way for them to apply that thinking to the internet and  net neutrality. They want free market competition and an end to internet service providers as boring utilities.

The way to do that, according to new FCC chairman Ajit Pai, is to focus on spending on network infrastructure. If the FCC can prove that network infrastructure spending has markedly declined recently , then it can make the case that net neutrality is slowing down the growth of 5G ultra-high speed wireless. Making America a 5G nation with one of the world’s fastest internet networks would be a showcase project for “making America great again.”

But things are not that easy. For one, advocates of freedom of expression are going to have a field day with any change to the basic structure of the internet. In a hypothetical scenario, an internet service provider could give preferential treatment to “real news” and discriminate against “fake news.” That would be a backdoor mechanism to stifle freedom of the press or, at least, to play favorites.  Some content would be relegated to the “slow lanes” of the information superhighway. All of a sudden, a “free and open” internet would be one that’s biased and discriminatory.

And even some proponents of free market reform are troubled by the whole idea, because they think that the big internet service providers have no real desire to increase their spending on expensive network infrastructure. Instead, they will simply use the end of net neutrality to engage in “rent-seeking” behavior – they will begin to charge fees here and there to all content providers, essentially charging rent to use their big pipes into the home.

Conclusion

At some point, there is a fundamental tension between innovation and economic growth and important tenets like freedom of expression and free speech. You simply can’t maximize the value of each, so it has to be someone’s job to optimize each of them, taking into account all the trade-offs and compromises outlines above. The big question, though, is whether the FCC – or any branch of government, for that matter – is really able to predict the future outcomes of important decisions made today.

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