Net Neutrality Explained: What It Means (and Why It Matters)

[Len]

After signaling that it would for months, the U.S. Federal Communications Commission on Tuesday revealed its plan to dismantle regulations that ensure equal access to the Internet, a concept known as “net neutrality.”

The regulations classify broadband access as a telecommunications service, which subjects it to “common carrier” provisions that bar Internet service providers from discriminating against how broadband is used. The regulations were passed in February 2015 by the FCC, then led by chairman Tom Wheeler. Wheeler’s successor Ajit Pai, a vocal critic of that move even while serving under Wheeler, has vowed to revisit the issue.

Pai’s position is that the common carrier provisions used to ensure net neutrality is “last-century, utility-style regulation” that injects uncertainty into a market now dominated by broadband. Pai, who says he supports an “open Internet,” believes that less regulation in this area is more beneficial to market growth.

The Internet is “the greatest free-market success story in history,” Pai wrote in a Wall Street Journal op-ed published Tuesday. Regulations “designed in the 1930s to tame the Ma Bell telephone monopoly” are hurting investment, he argued. In short, Pai’s view is that broadband shouldn’t be regulated like a utility.

Proponents of the 2015 regulations say Pai is merely clearing the way for Internet service companies to charge users more to see certain content and to curb access to some websites—a “fast lane” and “slow lane” for the Internet. It’s not an unfounded concern. In 2007 the FCC sued Comcast for interfering with traffic from BitTorrent, the file transfer service. The commission lost, owing to a lack of legal basis for the complaint—basis it later achieved with the 2015 reclassification.

“There are no toll roads on the information superhighway,” President Barack Obama said in a 2014 video on the subject.

Most software companies oppose the FCC’s recent moves.

Technology companies—among them Airbnb, Google parent Alphabet, Amazon, Dropbox, Facebook, Microsoft, Netflix, Twitter, Snap, and Spotify—have made their disagreement with Pai’s position known.

Rescinding the 2015 regulations makes it possible for telecom companies to force consumer Internet companies to pay for faster connections, they argue—something only the largest companies could afford. Those costs could make their way to individual users.

The move “will create significant uncertainty in the market and upset the careful balance that has led to the current virtuous circle of innovation in the broadband ecosystem,” a group representing many of the companies argued in a filing earlier this year. Worse, it will hurt consumers because it will eliminate restrictions blocking ISPs’ ability to block or “throttle” users’ access, the group argued.

“The Internet should be competitive and open,” Google said in an early statement on the issue. “That means no Internet access provider should block or degrade Internet traffic, nor should they sell ‘fast lanes’ that prioritize particular Internet services over others. These rules should apply regardless of whether you’re accessing the Internet using a cable connection, a wireless service, or any other technology.”

“We are disappointed that the proposal announced today by the FCC fails to maintain the strong net neutrality protections that will ensure the Internet remains open for everyone,” Facebook said in a statement this week following the release of Pai’s plan. “We will work with all stakeholders committed to this principle.”

Most telecommunications companies support the FCC’s recent moves.

A different category of technology company—telecoms such as AT&T and Verizon—support the FCC’s move to rescind reclassification of broadband. In September, a group representing AT&T, CenturyLink, Verizon, and scores of smaller telecom companies formally petitioned the U.S. Supreme Court to overturn the Obama-era net neutrality rules.

“The FCC is not talking about killing the net neutrality rules,” said Verizon general counsel Craig Sillman in a video explaining the company’s position. “In fact not we nor any other ISP are asking them to kill the open Internet rules. All they’re doing is looking to put the open Internet rules in an enforceable way on a different legal footing.”

That view is shared by other telecom companies. Charter, which acquired Time Warner Cable in 2016, said it would “not block or throttle Internet traffic or engage in paid prioritization” at the time of that deal. And Comcast says it supports net neutrality even as it rejects the FCC’s 2015 reclassification of broadband as a common carrier service.

“We have stated on numerous occasions that we believe legally enforceable rules should continue to include strong transparency, no blocking, and anti-discrimination provisions,” the Philadelphia company said in a statement. “We don’t prioritize Internet traffic or have paid fast lanes, and have no plans to do so.”

Still, various preferential treatments of Internet usage already exist today. When AT&T customers access the company’s DirecTV Now video streaming service, that usage isn’t included in calculations for data limits. The same goes for Verizon and its Go90 and FiOS TV services as well as T-Mobile and services such as those from HBO, Hulu, Netflix, and YouTube. The practice, known as “zero rating,” was scrutinized by Wheeler’s FCC. Under Pai, it’s freely practiced.

“The FCC will not focus on denying Americans free data,” Pai said in February.

In the end, it’s a political issue.

Notice something curious about the statements made by Google and Comcast? They’re remarkably similar. Both companies say they reject blocking, throttling, and paid prioritization for Internet users. Their disagreement is over how to enforce it. Should the FCC regulate broadband Internet, or leave market players to do it? Are existing common carrier provisions the best way forward, or is new and different regulation the answer? It’s as political a battle as it gets.