Heard of Net Neutrality? It’s Important — Here’s Why

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Back in 2010, I wrote a post called “Net Neutrality Passes — Here’s What It Means.” Here’s how I explained net neutrality in that post:

What’s net neutrality?

If you’re a huge Internet service provider like Comcast, AT&T or Verizon you’re a “gatekeeper” because, before any Internet traffic reaches your subscribers, it has to first travel through your network. And since you control the network, it’s tempting to slow down — even block — the content of your competitors, or make extra money by collecting a fee from content providers willing to pay for faster downloads.

In other words, even though you’re already charging your customers for access to the Internet, if the content they want to see doesn’t make you money, you’d like the option of making it harder for them to see it. For example, if you’re Comcast, you might make it faster to stream your pay-per-view movies rather than those of your competitors, like Netflix.

That’s the essence of net neutrality. The companies that own Internet infrastructure want to be able to decide how fast different types of traffic travels through their networks. On the other side of the issue, consumer advocates and content providers (like Money Talks News, for example) say the net should be “neutral” — gatekeepers shouldn’t be allowed to favor certain types of content over others.

The FCC has been studying the issue off and on since 2005 and has finally issued a draft order that some consider a victory for consumers and others consider not nearly strong enough. The new rules will require broadband providers (like Comcast and AT&T) to let subscribers see all legal online content at the same speed, even if that content competes with their own. However, the rules will apply to wired networks only (think cable companies) as opposed to wireless networks (cellphone companies).

Unfortunately, however, I’m now forced to write another article, because one of the gatekeepers — Verizon — recently won a court battle that puts the ability to restrict Internet traffic back into their hands.

An appeals court recently ruled against the FCC, saying it’s not authorized to control how gatekeepers choose to move content through their networks. Which means we’re back to square one, and service providers like Verizon, Comcast and AT&T now have the ability to block competing content, or charge content creators more to move it through their networks. So, for example, a gatekeeper could charge Netflix more, and Netflix could charge you more.

While some might argue that Netflix should pay more since its service hogs Internet bandwidth, the problem is that giving free reign to the gatekeepers could ultimately change everything. For example, suppose Comcast came to Money Talks News and said for a little extra money, our site would be optimized for their customers. Refuse to pay, however, and they could throttle (slow down) our site on their network, or even make it impossible for their subscribers to see us. Agree to pay it, and Verizon could conceivably block their subscribers from this site, since we’re working with one of their competitors.

While this example is admittedly a bit far-fetched, it illustrates the potential for problems and abuse.

It’s not dead yet

Although this issue may have gone over the heads of many consumers, the importance of net neutrality isn’t lost on the FCC or consumer advocacy groups. So an appeal is likely. It’s also possible, although unlikely in today’s climate, that Congress could pass a law specifically authorizing the FCC to regulate the gatekeepers. A third option would be for the FCC to rewrite its own rules and grant itself access to fill this role.

Bottom line? If the term “net neutrality” sounds too boring, try this one: “open Internet.” Because that’s exactly what this battle is about. So when net neutrality comes up again — and it will — pay attention. What you see and do on the Internet may depend on it.

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Comments & discussion

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  • George King

    Well stated Stacy, this has been a decades long battle. We see time after time where peoples’ choices are blocked in what is suppose to be a free market. If you want to cut the cable because you are forced to pay for tons of stuff you do not watch, does not pad profits of the gate keepers or introduces competition monopolies will spend money to block our choices.

    How about an article on how to cut cable and the products and services available. I have installed an antenna and the HD picture quality is much better. I am looking for a DVR purchase to use with my current free broadcast.

    • ManoaHi

      Answer to the second part. Stacy has occasionally had articles about cutting the cable.

      So, net neutrality should only be applied to monopoly providers (I know, nothing wrong with monopolies, just when they abuse the power) and torrents. I generally don’t like government intervention in private enterprise. Often the unintended consequences are overlooked. The US has an extremely poor track record when laws are passed to help the consumer, ultimately making things worse.

      For example, in the past, the US had been pressuring Japan to open up their markets to US computer companies. Then accused Japan of memory chip dumping and levied huge tariffs to protect one memory chip manufacturer (that company has since dropped producing memory chips). That save some 1,500 jobs in the memory chip company. However, this made US computers extremely expensive and uncompetitive. Japanese computer manufacturers bought up those cheap chips, and could bring to market inexpensive computers. Collective lay offs of multiple computer manufacturers in the US shed 25,000 jobs. So, saving 1,500 jobs cost us 25,000 jobs. Japan couldn’t justify paying so much for computers, so they bought locally. Trade officials had no defense against Japanese companies purchasing Japanese computers.

      Another, Asian countries were accused of dumping steel. Tariffs on steel were imposed. Did it protect US steel? No. It hurt every automotive maker and appliance makers since the price of steel skyrocketed, lowering demand for steel overall, so it ultimately hurt the steel industry as well as steel dependent manufacturers.

      Proponents of net neutrality need to look at all possible unintended consequences. Some include heavy investment in infrastructure required by ISPs to improve their equipment to prepare for the supposed onslaught of bandwidth requirements. Who pays? The consumer, be prepared to pay higher prices for your connectivity. There will also be some paring of ISPs who just give up. Thereby giving a chance for fewer competitors, increasing you lack of choices and thus, again higher prices.

      All the above presented by Stacy, is possible, but it is scaremongering. What the providers want is the ability to limit torrents and extremely high users to provide the best bandwidth for the rest of us. What Stacy is stating is a slippery slope fallacy. I for one am glad that it was tabled. It gives time for people to think more rationally and explore all the ramifications of possible unintended consequences. 10 years ago, the unintended consequences don’t apply anymore, there are new ones,

      • http://www.moneytalksnews.com/ Stacy Johnson

        Excellent feedback, ManoaHi and George. And your points are well-taken. You’re right: I was doing a bit of scare-mongering. But that’s OK, because I was trying to illustrate the dilemma. And it’s an interesting one: We don’t want government intervention, but we also don’t want to be abused. My hope is fear of government intervention will prevent oligopolies from taking advantage of consumers.