This article was first published on February 19, 2015 as the cover story for that week's Reader. On February 26, 2015 "As expected, the Federal Communications Commission (FCC) passed new net neutrality regulations. . . " On December 14, 2017 the FCC will vote to replace the "current Open Internet or net neutrality rules, which prevented Internet service providers (ISPs) from blocking or throttling legal content users sought to access, as well as preventing ISPs from accepting payment to prioritize some data."
On February 26, the Federal Communications Commission (FCC) will be voting on rules that would reclassify broadband Internet as a public utility. The stated goal is to give the commission the authority to enforce what's called "net neutrality."
Unless you're a rare breed, I've already frightened (or bored) you with a topic you're certain is arcane, technical, obscure, and confusing. You might also think it's irrelevant.
So to goose your interest, I'll note that John Oliver - the host of HBO's Last Week Tonight series - recommended replacing the dull "net neutrality" with "Preventing Cable Company F---ery."
Because cable companies are so loathed, calling net neutrality by Oliver's term gives us an easy target. Complaining about one's cable company is a time-honored pastime. And those operators control more than half of the U.S. broadband-Internet market.
"People want the villain, and the good guy," said Phyllis Peters, a regional communications director for Mediacom. "And because everybody loves what they can get on Netflix, they're the good guy. And ... Big Cable, it's the bad guy."
As with most easy villains, the situation is more complicated, and getting past the heated rhetoric - Oliver's included - takes work. So what follows is an imagined Q&A about ... Preventing Cable Company F---ery! (I've got to keep your interest somehow.)
My goal is to present a simplified (and in some cases over-simplified) explanation of net neutrality as a public-policy issue, specifically in the context of the FCC's impending vote. The proposed rules won't be made public before that meeting, but FCC Chair Tom Wheeler has sketched out the broad strokes - no blocking, no throttling, no paid prioritization.
What Is Net Neutrality?
Tech academic Tim Wu is credited with coining the phrase "network neutrality" in a 2003 paper. Fundamentally, net neutrality is the idea that you as a user can do anything legal that you want on the Internet, without any discrimination on the part of the owners of the network. As Wu wrote: "The basic principle behind a network anti-discrimination regime is to give users the right to use non-harmful network attachments or applications, and give innovators the corresponding freedom to supply them" (emphasis given).
Put differently, net neutrality on a conceptual level is a policy of an enforced free market on the Internet. The carriers - from your "last-mile" Internet Service Provider (ISP) to the "middle-mile" network - cannot discriminate in a way that warps the market.
Wu wrote that ISPs "should have the freedom to 'police what they own,' or act reasonably to control the local broadband network." But net neutrality would mean that your ISP can't do anything to favor, say, Netflix over another streaming-video service - such as Amazon Instant Video or Hulu or even legal pornography.
For example, ISPs would not be allowed to give higher priority or faster delivery speeds to a company that paid for the privilege - the "pay to play" model that proponents of net neutrality say violates the ideal that all bits should be treated equally.
Nor can an ISP block all video-streaming applications to conserve bandwidth.
Net neutrality would also prevent cable companies, for instance, from blocking video applications as a way to shield its cable-television video-delivery service from online competition.
Both end consumers and application developers have equal access to the network, and applications can be neither favored nor blocked nor slowed by the networks.
The ultimate goal, Wu wrote, is "preserving a Darwinian competition among every conceivable use of the Internet so that only the best survive."
He used the example of one bandwidth-heavy use of the Internet: online gaming. Without net neutrality, ISPs could block its customers from visiting a specific online-gaming site - or online-gaming sites generally.
With net neutrality, on the other hand, ISPs would need to take another approach to managing their networks, Wu wrote: "A carrier concerned about bandwidth consumption would need to invest in policing bandwidth usage, not blocking individual applications. Users interested in a better gaming experience would then need to buy more bandwidth - not permission to use a given application."
Although Wu's paper was written more than a decade ago, it was prescient. To the extent that net neutrality exists today, the primary economic result is that Internet consumers pay for what they use, with no network costs being borne by content providers. In other words, if you stream movies from content-provider Netflix, right now you are paying for the stress you're placing on the network. Under net neutrality, it's illegal for Netflix to pay for it.
So We Already Have Net Neutrality?
Practically speaking, yes - but not in a way that's enforceable.
The FCC has several times since 2004 attempted to promote the idea of network neutrality. However, courts have generally ruled that the FCC lacks authority to enact or enforce those rules, because broadband Internet has been lightly regulated as an "information service" under Title I of the Communications Act of 1934 rather than a "common carrier" under Title II, which allows for more-intensive regulation.
So while network discrimination - blocking or throttling traffic, or giving preferential treatment to certain content providers - under the present Title I regulatory framework is legal, net neutrality is still the norm. That is due partly to the FCC's stated support for and attempted enforcement of network neutrality over the years.
But it's also just good business for ISPs.
"Currently, most of the traffic in the United States is treated equally," said Mark McGinn, an assistant professor of computer and information sciences at St. Ambrose University.
Thomas Larsen, Mediacom's group vice president of legal and public affairs, added: "I think most of the [broadband] industry is of the belief that the success of the Internet has been based on consumers' ability to get what they want anytime they want it. Our position has always been that we want the most open Internet network possible so that consumers find our product extremely useful and valuable."
"Mediacom has never blocked or throttled content that our Internet subscribers receive," Peters said.
The idea here is that if Mediacom restricts what consumers can access on the Internet - or slows down certain traffic - it will drive customers away.
As Wu wrote: "Basic economic theory suggests that operators [ISPs] have a long-term interest coincident with the public: Both should want a neutral platform that supports the emergence of the very best applications."
Yet there's a caveat, Wu wrote: "The evidence suggests the operators may have paid less attention to their long-term interests than might be ideal."
Why Should I Care About It Now?
Because the FCC on February 26 will attempt - for the first time - to classify broadband Internet as a public utility.
The FCC found itself at a familiar crossroads last year, following the federal-district-court decision in Verizon Communications Inc. V. Federal Communications Commission - yet another case saying the FCC had no authority on net neutrality under Title I. (Verizon was challenging the FCC's Open Internet Order 2010.)
So last year, the FCC proposed rules that would have allowed paid prioritization ("pay to play") while still attempting to promote the core idea of net neutrality. Basically, it tried to shoehorn a legally defensible form of net neutrality into its Title I regulatory authority prescribed by the courts.
But the FCC's attempt at a middle road led to a backlash epitomized by Oliver's Last Week Tonight rant. Net-neutrality supporters argue that paid prioritization is antithetical to the idea of the open Intenet; the FCC's proposed rule paid lip service to net neutrality while gutting it. You might best understand the contradiction by thinking about George Orwell's famous line from Animal Farm: "All animals are equal, but some animals are more equal than others."
So earlier this year FCC Chair Wheeler proposed a new set of rules - the ones the five-member commission will consider on February 26. If the commissioners shift broadband-Internet regulation from Title I to Title II, the FCC would finally have the legal authority to enforce net neutrality ... if the rules survive court challenges that will likely tie them up for years.
Why Should I Care About It at All?
To understand the importance of net neutrality, you need to hear the theoretical nightmare scenario of a world without it - which, it must be stressed, is far different from the practical situation of a world in which the FCC can't enforce net-neutrality rules.
Here's the nightmare if net neutrality doesn't exist.
(1) ISPs (cable companies, phone companies, wireless providers) can freely block or throttle whatever content they want - for moral, political, technical, or financial reasons. Popular bandwidth-hogging content such as porn, Netflix, Facebook, and YouTube. Content deemed undesirable for any reason - Democratic propaganda, conspiracy-theory Web sites, whatever. Your ISP rather than you gets to decide what you see.
(2) ISPs would create a tiered system of service on the content-provider side. In the fast lanes would be those who paid for the privilege. In the slow lanes would be everybody else. Deep-pocketed content providers would have a competitive advantage over upstarts with less money. Netflix's market position could be solidified with a pay-for-play arrangement, for instance, and innovators and superior products without fast-lane resources couldn't compete.
So Without Net Neutrality, ISPs Can Censor the Internet?
You bet. But they likely won't.
First, with data speeds widely available now, net neutrality as a practical matter only applies to bandwidth-heavy applications - which is to say streaming video and large downloads associated with gaming. So your e-mail, the Web sites you visit, and your podcasts aren't much of a concern for ISPs in terms of their network capacities.
Second, your ISP doesn't care what you're watching in high definition: Netflix, Amazon Instant Video, Hulu, or porn. It merely cares that you're using an application that hogs bandwidth.
So in situations in which the network infrastructure is sufficient to handle peak traffic, no conscientious ISP would intentionally block or slow down your data delivery. It wants to retain you as a customer, and blocking or throttling would alienate you.
Yet McGinn cautioned that the mere prospect of ISPs blocking content should be worrying - even if it's doesn't seem particularly likely today. Net-neutrality proponents, he said, are "fighting a future battle. If you give the person [ISPs] the power to do X, Y, and Z, and the person says, 'Well, yes, but I'm only going to do X,' what prevents them from doing Y and Z in the future? ... Once the power and authority exists to start blocking stuff, what prevents them from blocking stuff?"
But If Censorship Isn't a Big Concern ... ?
It's the second aspect of the nightmare scenario that should be most concerning - the idea that content providers would need to pay for access to higher delivery speeds. The Internet's rapid development over the past two decades has been fueled by innovation, and net-neutrality advocates believe that paid prioritization would make it difficult to compete with (and supplant) established players.
The fear here is not really that some content providers would get special treatment and voluntarily pay for it. It's a twofold effect on the other side. First, that those who don't pay will get throttled to the point that they feel compelled to pay - a shakedown. Second, that those who don't have the resources to pay won't ever have an opportunity to compete in the marketplace.
So Is Net Neutrality a Good Thing?
Absolutely. Net neutrality ensures a level playing field, in the sense that consumers decide what they want - both in terms of content and content providers. For content providers, there are no practical ISP-created barriers to market entry or adoption.
And It's Good That the FCC Wants to Enshrine Net Neutrality?
Without enforceable net-neutrality rules, consumers are relying on the dubious benevolence of profit-driven companies to abide by a general principle of an open Internet.
Yet there's a financial incentive to do that - customer retention - assuming that consumers have multiple vendors from which they can purchase broadband Internet.
Who Doesn't Want Net Neutrality?
Republicans and free-market advocates, who generally believe a "yes" vote by FCC commissioners on February 26 would represent a power grab by the agency entailing heavy government regulation of the heretofore lightly regulated Internet.
And ISPs - the cable, phone, and wireless companies.
Crucially, all of those entities claim to favor the concept of net neutrality and an open Internet. Their stated objections largely concern the FCC reclassification vehicle, and more generally speak to a belief that net neutrality need not be accomplished through rules or laws.
Some critics of the FCC's proposed action believe that enforceable net neutrality should be enacted through Congress rather than administrative action by a federal agency.
"We're not opposed to net neutrality," Mediacom's Larsen said. "What we're opposed to is regulation under Title II of the 1934 Communications Act. ... If truly what they want is net neutrality, they should have Congress pass a law that says, 'Hey, here's a 21st Century law that codifies net neutrality.' But that's not what they're doing. They're trying to ram it into a 1930s statute."
Others believe the status quo works, that net neutrality doesn't need to be enforceable by the federal government to be a reality. This is the argument that the Internet doesn't need fixing - although it ignores that ISP behavior over the years has likely been shaped by the FCC's pro-net-neutrality position and its attempts at enforcement.
The Internet, Larsen said, is "the greatest economic-growth engine that's ever existed. It's really driven a lot of our economy. To think that it's broken and needs to be regulated back to health is just a fallacy."
Are Their Objections Valid?
Fundamentally, it's self-evident that the proposed FCC action is a hammer where a screwdriver would do. By repeatedly trying and failing to secure court-supported net-neutrality authority under Title I over the past decade, the FCC has given ammunition to critics today; it's only pursuing Title II regulation because Congress hasn't passed a net-neutrality law, and because courts won't sign off on rules under Title I. The FCC is now pursing a path it has avoided for years.
So Mediacom's Larsen talks about the regulatory burden under Title II, saying it's an outdated statute that could subject consumer Internet bills to taxes new (such as the Universal Service Fund) and higher (such as for poll-attachment fees).
"You could have a situation where consumer bills go up overnight because states or the federal government realizes that there's declining revenue coming from the land-line phone business," Larsen said.
He also floated the theory that the FCC's proposed action (supported by President Barack Obama) represents the beginning of the three-step process in which the federal government takes over the Internet infrastructure in the United States.
"The president wants to control the Internet," Larsen said.
In this formulation, the government first changes the definition of what broadband is (based on speed), as the FCC's proposed action does. Because that effectively reduces the number of broadband players (eliminating DSL, for instance), there is according to the federal definitions a dearth of competition, which would then lead to construction of a government-owned network. And the third step is heavy regulation, Larsen said. He summarized: "Redefine it, own it, regulate it."
Regardless whether you find this theory frighteningly realistic or hilariously kooky, the fact that the FCC's proposed shift leads to this sort of discussion underscores the perils inherent in the prospect of heavier regulation. We know the status quo, and it's certainly not a bad situation in terms of net neutrality. We don't know what regulation under Title II might lead to, particularly considering that Wheeler has refused to release the draft rules prior to the FCC's vote.
There's the down-the-road prospect of price controls on Internet service, voiced by Republican FCC Commissioner Ajit Pai. Consumers might see price controls as a good thing, but they would undoubtedly stifle investment in infrastructure.
And Adam Curry of the NoAgendaShow.com podcast argued that enforceable net neutrality will create an opening for Google to build networks, offer them to consumers for free, and then deluge them with embedded ads.
To return to the idea of easy villains, the FCC's proposed action swaps out the enemy: Big Cable is replaced by Big Government.
I've Lost the Thread. What's This Really About Again?
Something not previously mentioned: money.
Netflix, for example, places large demands on ISPs, and building networks to accommodate all that streaming video is expensive. Net neutrality makes it impossible to charge content providers for the stress their content puts on ISPs' systems. No paid prioritization; no slowing of data; everything is treated equally.
According to Mediacom's Peters and Larsen, Netflix by itself represents 37 percent of the company's Internet traffic. Peters said the company has had eight speed boosts over the past 12 years. Over four years, Larsen said, Mediacom has spent $812 per customer in broadband capital expenditures.
During the same four-year period, Larsen said, Netflix spent $5.93 per customer in capital expenditures. Hardly seems fair, does it?
Shouldn't ISPs Be Allowed to Extract Money from Content Providers for Costs Related to Content Delivery?
Perhaps. But here's the rarely spoken reality: You're paying for those network upgrades now on your monthly bill.
Take Mediacom, for example. It offers a variety of plans with different prices, speeds, and data limits. If you go above your data cap, you pay $10 for each additional 50 gigs.
So it's a question of who pays for it.
And it's a curious nuance that although Mediacom is an avowed supporter of net neutrality in theory, it also supports being allowed to make deals with content providers - although Larsen argued that this sort of thing is different from pay to play.
"If you're going to send a lot of traffic, you should improve the connection to the ISPs," he said. "Netflix should be investing in better networks to ISPs." And if Netflix is willing to pay Mediacom to build a better connection, that's fine with him.
But Isn't That What Caused Such a Furor When the FCC Considered Doing It Last Year?
Yep.
"Nobody has ever spoken about hurting garage innovators or start-ups or Vimeo ... ," Larsen explained. "It's a rational and reasonable conversation to have about making sure that the middle networks are big enough, strong enough to carry all the traffic. ... There's as much financial incentive for Netflix to want those to be strong and robust as there is for us to want them to be strong and robust."
I'd Rather Netflix Foot the Bill.
Fine. The additional costs to Netflix would be reflected in your monthly Netflix charge.
If I'm Paying for It One Way or the Other, Does This Cost Issue Really Matter?
Probably not to you.
But it matters to ISPs and to content providers. If you foot the entire bill for network upgrades on your cable bill, Netflix can keep its costs (and prices) down while ISPs raise their prices. If you're paying for network upgrades through your Netflix charge, your ISP bill might not rise quite as quickly or quite as much.
Assuming price-sensitive consumers, the cost questions of net neutrality could be said to come down to whether it protects the price interests of ISPs or content providers. As Larsen said: "The more costly our products become, the less people will buy them." Ditto for Netflix.
Steven Pearlstein neatly summarized the situation in a November 29 Washington Post column: "What the net-neutrality debate is really about is deciding who will pay the considerable costs of building out the infrastructure to handle all those bandwidth-hogging videos and games that we'll be downloading from the Internet. ...
"But here's the thing: In a genuinely competitive market, it shouldn't matter. Whichever side pays will simply pass the cost on to us consumers. This is just a fight between two industries trying to make sure it's the other which is forced to raise prices."
So perhaps "Preventing Cable Company F---ery" was a bit overwrought. But it made for good television, didn't it?
