In April of 2014, after news reports of a ruling by the Federal Communications Commission’s (FCC), the United States public was introduced to the concept of net neutrality. On a basic level, the current form of the Internet requires that Internet service providers (ISPs) allow every domain to be run at the same broadband speed, thus remaining neutral in regards to which websites run faster than others.
After it was reported that the FCC desired to overturn net neutrality and allow ISPs to charge domains for faster broadband speed, public uproar forced them to reconsider. The issue has come back into the news after President Barack Obama took a firm stance in favor of net neutrality on November 10.
In most conversations about economic regulation, people are split evenly between those supporting deregulation and competition and those willing to sacrifice competition in favor of forcing companies to maintain higher standards. However, those sides aren’t as clearly defined in this argument.
Those in favor of net neutrality argue that by allowing ISPs to charge companies more for faster speeds, smaller businesses unable to afford the high prices would be hurt while larger companies would be able to maintain high speeds, whereby creating a system that values company size over the quality of the product.
For an easy comparison, imagine if television broadcasters charged higher prices for individual channels to have higher resolution video. The market would work itself out to the point that smaller channels would have worse resolution than their larger counterparts, and their market share would inevitably suffer as a result.
It’s from this logic that proponents of net neutrality make the claim that the concept would actually increase competition, by giving individual domains equal footing from which their product would be judged.
Opponents attack the issue from many sides. There are those who claim that such data discrimination as described would not occur were net neutrality overturned. However, this argument falls apart when one takes note of the fact that Comcast, an ISP, did exactly that in 2007, according to an AP study performed in 2009.
Still, there is some logic on the opposing side. Some claim that if data discrimination were to occur, companies that discriminated more would be punished by the market and the consumer, who would move towards ISPs that committed less discrimination. This can be compared to mobile phone companies: as contract cancellation fees grew higher and higher as companies abused the system, upstarts like T-Mobile got rid of their own cancellation fees and offered to pay for customers to quit their current service.
President Barack Obama made his support of net neutrality clear in an announcement from the White House. Comparing it to basic utilities like electricity and telephone service, the President proclaimed that, “For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access into and out of your home or business,” and requested that the FCC ruled in accordance to that philosophy.
The chairman of the FCC, Tom Wheeler, is believed to be drafting a plan in support of net neutrality, and with a vote required by a five-person committee that includes three Democrats and two Republicans, it looks likely to pass. Wheeler made his position clear in a statement following the President’s address, saying that, “The Internet must remain an open platform for free expression, innovation and economic growth.”
Specifically, the proposal would reclassify Internet service as a telecommunication service, putting it under the guidelines of the Communications Act of 1934. Senator John Thune (R) of South Dakota, an opponent of net neutrality, criticized the idea as it, “would turn the Internet into a government-regulated utility and stifle our nation’s dynamic and robust Internet sector with rules written nearly 80 years ago for plain old telephone service.”
The Telecommunications Industry Association, which represents Internet service providers like Comcast, said in a statement that they “strongly urge regulators to refrain from reclassification that will guarantee harm to consumers, the economy and the very technologies we’re trying to protect.”
With the resolution likely to pass, an Internet community that has been up in arms over the issue will be able to breath a sigh of relief. However, with appeals possible, net neutrality is sure to remain a topic of national conversation for years to come.