Net Neutrality: The Ongoing Debate

Posted By Becket Morgan

BreakingModern — Update 2/27/15: On Thursday, Feb. 26 the FCC voted 3-2 to approve the net neutrality policy, classifying ISPs as public utilities for the first time, but the conversation is far from over. The dissenting votes came from Republicans Michael O’Rielly and Ajut Pai, citing concerns that the FCC is overstepping its authority and threatening the market. In his dissenting statement, Commissioner O’Rielly remarked:

“This shift to regulate Internet traffic exchange highlights that the Commission’s real end game has become imposing Title II on all parts of the Internet, not just setting up net neutrality rules. In subjecting a thriving, competitive market to regulation in the name of net neutrality, the Commission is trying to use a small hook and a thin line to reel in a very large whale.”

FCC chairman Tom Wheeler penned an editorial recently in Wired magazine that made it abundantly clear where he stands on the issue of net neutrality. In short, he plans to toe the White House line to propose reclassifying Internet service providers (ISPs) as common carriers under Title II of the Telecommunications Act, and you can bet there will be a huge reaction on both sides of the debate.

Net Neutrality 101

What is net neutrality?

Net neutrality is the idea that all data on the Internet should be treated equally by Internet service providers and by governments, and that those entities should not discriminate by “charging differentially by user, content, site, platform, application, type of attached equipment or mode of communication.”

So, what’s the problem?

Many of us seem to operate under the assumption that the Internet will always remain free and open, but there are no such guarantees. In the U.S. we rely on a very few Internet service providers to access our high-speed Internet. Even if you choose to subscribe with a smaller ISP, their access is still available at the whim of the large conglomerates like Comcast and Verizon.

Net neutrality advocates have long pushed for applying the well-established “common carrier” rules to the Internet. These rules would prohibit the network owners from discriminating against who is sharing information and what information they are sharing. Common carriage rules have been applied multiple times over the past century to public utilities, including railroads and public highways, and they were written into the Telecommunications Act of 1996 by Congress to apply to broadcast services like television stations regulated under Title II of the Act. In 2002, the FCC classified ISPs as Title I “information service providers,” which exempted them from the stricter provisions in Title II.

Presidential Decree and Aftermath

Last November, President Barack Obama unveiled his plan for net neutrality, essentially tying the hands of FCC chairman Wheeler, by calling for the FCC to enact “simple, common-sense steps that reflect the Internet you and I use every day.” These rules include no blocking of websites, no throttling, increased transparency and no paid prioritization. Responding to the almost four million comments from the public about net neutrality — that crashed the FCC servers at one point — the White House made its most stringent call for net neutrality ever, and the statement by FCC chairman Wheeler seems to answer that call.

In recent months, many ISPs have argued against being regulated under Title II, claiming it will risk jobs and stifle investment and innovation in broadband. Mr. Wheeler takes that in stride, referencing wireless companies that have been regulated under Title II for more than two decades. He says,

“To preserve incentives for broadband operators to invest in their networks, my proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling. Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition.”

So, what does this mean for my mobile device?

For the first time, the FCC is proposing to group wireless data networks in with wired broadband in the regulation, so your mobile provider must also follow the guidelines of net neutrality. This means, according to Wheeler’s statement, no throttling, no arbitrary blocking of apps, no more sponsored data and no special exemptions to preferred organizations.

Well, that sounds good, right?

Maybe. While it’s true that mobile carriers have been subject to Title II for quite some time, wireless data networks — which arguably accounted for a significant portion of the investment and innovation noted by Wheeler — were exempted from Title II.

It’s also worth noting that Title II regulation is not a magical solution to ensuring net neutrality for wired or wireless data networks. According to Christopher Yoo, a professor of telecommunications law at University of Pennsylvania Law School, Title II regulation will not prohibit special pricing or prioritized service. Daniel Fisher also said in his Forbes article,

“In embracing common-carrier treatment for the Internet, Wheeler and the White House are using a 19th-century tool to regulate a 21st-century market. And that tool didn’t even work so well in the 19th century.”

Though Mr. Wheeler mentions “modernizing” Title II and the common carrier rules in his statement, it’s unclear at this point just what exactly that will mean.

Bonus: Is Net Neutrality the Real Problem?

The Internet of today just doesn’t look like the Internet of 2003, back when Columbia University’s Tim Wu coined the phrase “net neutrality.” Internet traffic is no longer broadly distributed across thousands of companies as it was even a decade ago, and today half of the Internet traffic comes from just 30 companies including Google, Netflix and Facebook. According to Wired’s Robert McMillan:

“The net neutrality debate is based on a mental model of the Internet that hasn’t been accurate for more than a decade. We tend to think of the Internet as a massive public network that everyone connects to in exactly the same way. We envision data travelling from Google and Yahoo and Uber and every other online company into a massive Internet backbone, before moving to a vast array of ISPs that then shuttle it into our homes. That could be a neutral network, but it’s not today’s Internet. It couldn’t be. Too much of the traffic is now coming from just a handful of companies.”

Additionally, there are many Americans that do not have access to broadband Internet at all, and more than half the population only has access through one ISP. Larry Press, professor of information systems at California State University and the ultimate cord cutter responded to me in an email that:

“The FCC has realistically revised the definition of broadband to 25 mb/s or more. Using that criteria, 55.3 percent of homes in the U.S. have only one broadband ISP, and 19.4 percent have none. I think lack of competition is more important than network neutrality. It is a tough problem, but one source of competition can be publicly owned networks that offer wholesale or retail service. FCC chairman Tom Wheeler wants to invalidate state laws that prohibit local-government networks. Naturally the incumbent ISPs are fighting him on this issue as well as on his network neutrality proposal.”

What’s the Bottom Line?

On paper, the FCC’s proposal seems to address the public’s concerns about net neutrality, but a lot will depend on what exactly Mr. Wheeler means when he says the FCC will “modernize” Title II. As we’ve seen before, common-carrier rules on their own are not a magic bullet toward fair and equal treatment (just look at the railroad example), and we’ll have to wait and see what a modernized version of the rules will look like. To date, the 332-page FCC proposal document has not been released to the public.

For BMod, I’m Becket Morgan.

Feature/First image credit: © Victoria / Dollar Photo Club

Second image credit: Screenshot Becket Morgan Courtesy of WhiteHouse.gov