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Net Neutrality – The Net Wars

Published On February 24, 2017
In Global, Telecommunications, ESG, Blog Archives

Imagine waking up to see emails inundating your inbox! Your clients are claiming that your business website is running slow, thus causing substantial monetary losses. A quick look at your web analytics only validates their complaints. The reason for the performance low could be that your clients’ Internet Service Provider (ISP) has decided to throttle connections to your website as part of its business strategy.

Is this legal? It’s been over 30 years, and we are still debating over the basics and ground rules of the internet. The hot debate on ‘net neutrality’ continues to divide influencers, entrepreneurs, telecommunication providers, and investors.

What is net neutrality

Net neutrality is an intricate concept. However, in simplest terms, ISPs should, in principle, treat all online traffic equally and allocate even bandwidth to all peers. Net neutrality should also ensure that ISPs are not allowed to block connections to any website unless there are specific orders issued by respective government authorities.

The buzz around net neutrality gained traction with the change of administration in Washington. Donald Trump’s views on net neutrality have prompted us to rethink about the internet. The discussion is boosted by his comment on FCC’s (Federal Communication Commission) net neutrality rules, calling those ‘a top-down power grab‘. The most controversial FCC decision is the Open Internet Order that reclassified offerings of internet providers as telecommunications services under Title II of the Communications Act on February 26, 2015.

Short history of US net neutrality and the FCC

The US took first steps towards net neutrality in 2005 when the FCC released and adopted the policy statement FCC 05-151 by the FCC. This document termed 4 principles to encourage broadband deployment. It also intended to preserve & promote the open and interconnected nature of the public internet by entitling consumers to:

  1. access the lawful internet content of their choice;
  2. run applications and services of their choice, subject to the needs of law enforcement;
  3. connect their choice of legal devices that do not harm the network; and
  4. competition among network providers, application and service providers, and content providers.

The FCC released the first Open Internet Order – a set of regulations – in 2009. The historic document adopted an aggressive net neutrality stance toward fixed-line broadband providers. In 2015, the FCC implemented an even stricter Open Internet Order, including prohibitions on site & app blocking, speed throttling, and paid fast lanes. Most users appreciated the regulations, while lawyers started to discuss whether the FCC had the authority to impose such rules. ISP companies such as Comcast and AT&T were leading the legal attacks.

The never ending struggle led by internet companies vs. ISPs

Given the huge media attention in the legal confrontation between Comcast and AT&T on one side and the FCC on the other, it is easy to forget that other big players also evince an interest on net neutrality.

Internet companies and Barack Obama back net neutrality

A broad coalition of internet companies and activists have backed the Title II regulation of net neutrality. The list of supporters includes Google, Netflix, and Mozilla, as well as then US President Barack Obama. The internet is a highly competitive space. Mobile devices and progressive network technology enable tech-savvy innovators to disrupt even traditional offline industries. All these innovations and online competitiveness would be hurt by the end of net neutrality, where internet providers were allowed to charge for premium content and create additional market entry barriers.

“Net neutrality is what makes the internet so great – and so vital for innovation and creativity.” – Justine Bateman.

ISPs, cable companies, and Trump strive to ease regulations

The opposing group, led by Verizon, Comcast, AT&T, and the Republican Party, calls the Title II regulations terrible. They argue that the rules dispel investments in network technology and harm the internet economy in the long run. Telecom bellwethers such as Verizon, Comcast, and AT&T instead propose a compelling future: An internet free from malware and unforeseen problems due to latency. However, to facilitate a congestion-free network, it is crucial to hand over supremacy and flexibility to network managers opposing net neutrality.

While the dispute over net neutrality is treated as a battle today, it is important to see the concept with good intentions. Igniting both ends of the discussion will certainly prepare the concept for a fierce debate, but the most important focus areas should be the overall economic impact and social aspects.

Net Neutrality – Impact on Consumers and Investors

While policy makers and users have been grappling with the question of ‘if the internet is going the right way’ for years, US President Trump took a stand by appointing Ajit Pai, who vowed to repeal the current regulations, as the next chairman of FCC. Pai, who has been opposing net neutrality since years, seems prepared to face serious backlash and concedes that “Americans love the free and open internet. We relish our freedom to speak, to post, to rally, to learn, to listen, to watch, and to connect online”.

According to a study conducted by Consumer Reports, 10% of Americans expressed their intentions to leave the internet if net neutrality were to die. After all, without net neutrality, ISPs could freely choose what users were able to view online and charge hefty amounts for popular but otherwise free content. They could also influence the public opinion, even to a greater extent than huge media houses or search engines.

Net neutrality boils down to the notion that internet has always served as a catalyst – making industries more competitive and innovative. Praised by some and reviled by others, the most likely long-term solution is a weakened version of net neutrality that puts the interests of ISPs and internet companies at par. Power must never be trusted without a check – after all, supremacy over the internet is much more than just the ability to control bits and bytes. 

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Anil Kumar
Anil Kumar
About the Author

Anil Kumar is an associate analyst at SG Analytics. He holds a bachelor’s degree in Mechanical Engineering from MNNIT Allahabad and has a deep interest in politics and business amalgam and their increasingly complicated relationship.

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