As much as our culture uses and relies on the Internet today, it remains a relatively new technological feat. It wasn’t commonplace until the late ‘90s, and even then we couldn’t make a phone call and surf the web at the same time. The words “net neutrality” were first tossed around as recently as the ‘00s, yet today many aren’t entirely sure what they mean.
Last week, the Federal Communications Commission (FCC) passed a net neutrality policy that still has concerned citizens up in arms. Under Title II of the 1934 Telecommunications Act, this new policy will label Internet Service Providers (ISP) as “telecommunications providers,” rather than “information services,” effectively making all broadband service throughout the U.S. a regulated public utility. Proponents of the policy say that these regulations will help keep Internet access free and fair, since ISPs like AT&T and Comcast will not be able to block or censor the content they don’t like. This would also prevent these companies from allowing easier access (or fast lanes) to the content they do.
FCC Chairman Tom Wheeler states that the policy will ensure “that no one – whether government or corporate – should control free open access to the Internet,” according to NPR.
In theory, this seems like a good idea. As consumers, we certainly don’t want big, privately owned companies to control what content we view and how fast we can get it. Yet, due to this new policy, two issues remain unconsidered. First, in principle, net neutrality already exists.
Second, there will be a consequential imbalance of Internet economics
Many ISPs support the ideas behind net neutrality. Comcast Executive Vice President David L. Cohen stated on his corporate website that he supports free and fair Internet, including no blocking, no throttling, and no paid prioritization. Furthermore, in an interview with CNBC, Charter Communications CEO Tom Rutledge stated, “I’ve been managing ISPs since when they began, since broadband began, literally was there at the beginning and I’ve never had anyone come to me and ask for a fast lane. So, we’re worried about something that theoretically could happen but has never happened.”
Computer science guru Linda Crane completed an economic analysis for Columbia University of the way ISPs interact with one another and how they make their profit. According to her research, the Internet was once believed to be a two-sided market: users were on one side, and the ISPs on the other. Eyeball ISPs (the providers that connect directly to us) would enter into no-cost agreements to carry Internet traffic for one another, causing no conflict or competition between them.
The reality today is much more complex. Content providers like Google, Netflix, and Amazon introduced a new revenue stream outside of the Internet itself. This created an imbalance of power: customers dissatisfied with Netflix could pay for a different streaming service, but normally could not choose a different ISP. This is where the FCC came in.
Afraid that ISPs would gain too much power over this new market and depriving consumers of certain services, the FCC switched to the offensive. In order to prevent individual ISPs from exercising unfair control of internet traffic, the FCC ruled in favor of broad government regulation for the industry.
Involving the government will result in aggressive lobbying from Congress and other private companies concerning how to distribute this new profit. If the FCC thinks back door dealings are happening now, just wait until they bring political battles into the mix. The interactions between the FCC and interested parties will inevitably result in complex, politicized regulatory regimes. The FCC will soon allow political corruption to seep into the mechanisms of the global Internet, while we are still stuck dealing with profit-driven ISPs.
The new rules will become gradually more convoluted over time as contending interests manipulate FCC decision-making. Ruling in favor of content providers like Google, Amazon, and Netflix will cause another imbalance of power. Eventually, the wealth will be transferred among these existing companies, which would make fledging newcomers unable to compete. This lack of competition means that the innovation once keeping these companies on their toes will increasingly slow.
In his essay “The Economics of Net Neutrality” Scott Wallsten, a senior fellow at Georgetown University posed this question: “Suppose you believe that Internet service providers do not face enough competition to prevent them from behaving anticompetitively. Should we then necessarily mandate how they provide and charge for Internet service?” No. The only thing the government is really needed to do is enforce antitrust laws that make sure monopoly broadband providers don’t over charge competitors’ services in favor of their own services.
Wallsten accurately states that “Net neutrality will remain unresolved because the best answers today will not be the best answers tomorrow.” In other words, today’s business models may not be realistically accurate or helpful in the future. Given the rate of technological development over the past decade–social media, HD streaming video, app stores–we might question the wisdom of legally defining the Internet according to its 2015 form. Unknowable changes may render that legislation obsolete or counterproductive. Instead, we may be best served by retaining the Internet’s innate adaptability to ensure that we do not solve the problems of today at the expense of the opportunities of the future.
Lauren Richey can be reached at firstname.lastname@example.org