The Thing about Net Neutrality

In January a Federal appeals court struck down the FCC’c Net Neutrality rules. Since then, there has been a noticeable outcry about how ISP’s, technically, can now legally block, restrict, and even charge more for specific websites. It’s a little more complicated than that, but we’ll get into the details in a minute. If the government is seriously interested in imposing these rules I would say that this ruling will amount to a speed bump. The court said that the FCC does not have the power to impose these rules, but that ISP’s are not currently categorized as an industry that falls under their authority. It could just be a matter of time before the FCC or Congress reclassify ISPs. It must be so annoying for the government to have to jump through a couple hoops before it grabs more power.

Net Neutrality, or the FCC’s official term “Open Internet Rules” (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-201A1.pdf), can be summarized in four categories: transparency, no blocking, no unreasonable discrimination, and reasonable network management.

Here is the full text of the rules:

Paragraph 53: Transparency:

“A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.”

Paragraph 62: No Blocking or Unreasonable Discrimination:

“A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or nonharmful devices, subject to reasonable network management.”

“A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.”

Paragraph 80: Reasonable network management:

“A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.”

I admit, without being an expert in internet infrastructure, I like the idea of Net Neutrality and I would like ISP’s to abide by it. It is plausible that some ISP’s might restrict bandwidth or outright block competing websites. ISPs may even charge premiums to websites for better bandwidth to their users or vice versa. Here is where I differ from supporters of the FCC enforcing Net Neutrality: The underlying problem is government intervention in the marketplace, not corporate greed. Passing more laws would be like using morphine for a toothache. It’s very short-sighted. You may feel better in the short run, but the problem will only get worse and then the government is going to pull out all our teeth, so to speak. Government at all levels have allowed the big ISP’s to write laws that protect their place in the market. That is the underlying problem.

Government laws have killed competition. We all know that a small number of corporations dominate the market. That allows them to neglect updating their infrastructure and improving their service. The only ones able to break into the market are powerhouses like Google. Just the act of a single new competitor like Google Fiber entering into competition with the likes of AT&T and Comcast has positively affected the marketplace. Every new city that Google Fiber moves into scares the local ISPs into updating their old infrastructure. In Austin, TX the threat of Google Fiber forced AT&T to roll out their new service, GigaPower, in an effort to keep their customers if or when Google comes there. Google is looking at expanding its internet services to 34 new cities and that will force every local ISP to step up their game or be crushed. All this, by the entrance of one capable competitor in a marketplace.

While Google Fiber is pushing their large and unresponsive competitors to improve their services, it’s impact on the country as a whole is limited. Many of us won’t feel the benefit of Google’s efforts for a long time, if ever. While it is a huge undertaking to build the infrastructure for their services, they must also battle against the laws local ISP’s have lobbied into existence in order to protect their “turf”. It’s true that entering an industry like this is very very costly, but there are plenty of powerful companies out there with a lot of capital. Removing the barriers to entry would encourage them to enter the market and fulfil our society’s desire for faster and more reliable internet service. Imagine the impact of new ISP’s popping up in each state.

As I alluded to earlier, all this allows the few ISP’s in the marketplace to sit on their hands and rake in piles of money without innovating or even maintaining their current infrastructure. Now we’re in a situation where Netflix and YouTube have exploded web traffic and ISP’s have been caught with their thumbs up their asses. Netflix has added so much strain on ISP’s that streaming quality has dropped and now there is a fight over who will pay for the increased load on the networks. Should the ISP’s suck up the cost of transmitting that traffic? Maybe. What if it is appropriate for Netflix to pay a premium for the strain they are putting on ISP’s? I don’t know. No one can know because the market has been distorted. The ISP’s have committed many sins, but new laws are not the answer. They have obviously been powerless to prevent this situation and the lobbyists for the ISP’s end up writing the laws anyways. There is no way that government regulations can help this situation. I call for a separation of internet and state.

Some might be thinking that I’m being simplistic or overly repetitive by placing all the blame at the feet of the state. I will admit that ISP’s have acted poorly and in opposition to the best interest of their customers. There is no doubt in that, but you must always seek out the most powerful actor in a situation. The one enforcing the rules. The one with all the guns. Just a hint, ISP’s don’t have any guns.

An individual that fancies himself a practical person might say that we have to take realistic action in the situation that we find ourselves. The situation right now being that government (and corporations) are writing all the rules and ISP’s are swimming in pools of money. Since ending government intervention is unlikely, then our only option is more rules and regulations. I call bullshit on this line of thinking, though. Its a perfect feedback loop: “Things aren’t the way I want, better pass a law. Things still aren’t the way I want, better pass a law.” Hello North Korean internet fun-land! That is no way to preserve internet freedom.

There are no quick fixes for the situation we find ourselves in and it is true that government involvement is not likely to go away. That doesn’t mean we roll over and embrace it. We are going to have to go around the government and ISP’s. We need to make them irrelevant and bring competition to internet delivery. There are a number of technologies that could help us do that.

Wireless data speeds have increased significantly in the last 10 years. If you have a phone that can connect to 4G LTE, you have access to download speeds higher than what a lot of people have in their homes. There are people that forgo the traditional wired home internet access and just get a 4g LTE hotspot. Wireless delivery of internet could be a less costly way of competing with traditional ISPs.

A company called Media Development Investment Fund is working to create a free global wifi network by launching hundreds of little satellites into orbit. They are calling it “Outernet” and its not a far off fantasy. They plan on making it a reality by 2015. Maybe free global wifi is part of the future of internet access.

Hell, you can even just coordinate with your neighbors to create an ISP in your town. In 2007 the people of Monticello, Minnesota began the process of creating their own ISP because their local ISP wasn’t providing satisfactory service. The local ISP, TDS, took them to court to try to stop them and began building fiber connections house to house. The lawsuit kept the city from building their own fiber networks, but by 2009 TDS had completed their fiber network and was offering competitive prices for internet over fiber. Just the threat of competition made TDS fold like a cheap lawn chair. This is proof that ISPs will use any means, including the government, to prevent competition. If the government had no authority in such matters, then TDS would have been virtually powerless to stop the people of Monticello.

This has been a long winded way for me to say that the issue of Net Neutrality is born out of the lack of competition in the marketplace. Lack of competition is not a problem in free markets and there are no free markets in the US. The corporations have bought influence over the marketplace from the government in order to block competitors. The answer cannot be to give more power to the government that will just end up being sold to the highest corporate bidder, again. Our current laws have been powerless to prevent the big ISP’s from acting in opposition to their customers’ preference for Net Neutrality. It also allows them to neglect improving their service, which they can turn around and claim as a reason why they would need to throttle your bandwidth for watching other people play video games on YouTube.

The good news is that the market drives relentlessly for innovation, even when governments actively try to tie it down and corporations relax in their state provided money-hammocks. The father of the modern internet, Tim Burners-Lee, has called for a more decentralized internet free of central planning and government meddling. He knows that this would be a far greater force for making ISP’s act according to consumer preferences than any regulation even could. Thats what this is all about in the end, consumer preference; not Net Neutrality, not internet speeds, and not corporate greed. Its about consumer preferences and the open competition of a free market is the only way they can be fulfilled.

Sources:

Image via: Shutterstock / Toria

Federal Appeals Court Ruling: http://publicknowledge.org/files/nn%20opinion.pdf

Open Internet Rules: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-201A1.pdf

If You Want To Fix U.S. Broadband Competition, Start By Killing State-Level Protectionist Laws Written By Duopolists: http://www.techdirt.com/articles/20140308/06040526491/if-you-want-to-fix-us-broadband-competition-start-killing-state-level-protectionist-laws-written-duopolists.shtml

Google Fiber Keeps The Pressure On Comcast And AT&T: http://seekingalpha.com/article/2053013-google-fiber-keeps-the-pressure-on-comcast-and-at-and-t

Netflix and YouTube are the Internet’s bandwidth consumption kings: http://bgr.com/2013/11/11/netflix-youtube-bandwidth-consumption/

Here’s why Netflix streaming quality has nosedived over the past few months: http://bgr.com/2014/02/19/why-is-netflix-streaming-slow/

Verizon, Netflix and the ‘House Of Cards’ debate: http://blogs.marketwatch.com/thetell/2014/02/19/verizon-netflix-and-the-house-of-cards-debate/

Forget the Internet – soon there will be the OUTERNET: Company plans to beam free Wi-fi to every person on Earth from space http://www.dailymail.co.uk/sciencetech/article-2552177/Forget-Internet-soon-OUTERNET-Company-plans-beam-free-wi-fi-person-Earth-space.html

Want 50Mbps Internet in your town? Threaten to roll out your own: http://arstechnica.com/tech-policy/2009/10/want-50mbps-internet-in-your-town-threaten-to-roll-out-your-own/

Tim Berners-Lee: we need to re-decentralise the web: http://www.wired.co.uk/news/archive/2014-02/06/tim-berners-lee-reclaim-the-web

FCC Boss: No Network Neutrality Complaints: http://www.dslreports.com/shownews/FCC-Boss-No-Network-Neutrality-Complaints-119577

Court ruling overturns Net Neutrality, threatens online access, experts warn: http://www.foxnews.com/tech/2014/01/14/court-strikes-down-fccs-net-neutrality-rule/

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