Owning the Internet: The Demise of Net Neutrality

by Inessa Goodman April 17 2014, 09:40

The Internet is the modern day printing press; a revolutionary game changer. The Internet owes much of its success to the theory of net neutrality. While net neutrality is not a new topic of discussion, it has been thrust in the limelight with the recent case of Verizon v. FCC, which many are proclaiming signifies a dangerous change in the policies of net neutrality. This article gives an overview of what net neutrality is, and what this means for people and businesses.

What is net neutrality?

A basic, not often thought about question is, how does the internet even work?

You connect to the Internet through pipes owned by telephone and cable companies such as Comcast, Verizon, AT&T, and Time Warner Cable; these are also known as Internet service providers (ISPs). [i]ISPs are controlled by the Federal Communications Commission (FCC) and by statutes such as the Telecommunications Act of 1996.[ii]The FCC “uses free, publicly available standards that anyone can access and build and it treats all traffic that flows across the network in roughly the same way.”[iii]The FCC goes on to add that it in no way does it desire to “restrict the innovation on the Internet.”[iv]

To accomplish these goals, the FCC has adopted three basic open Internet rules. The first is transparency, meaning that ISPs must disclose business practices.  Second, ISPs cannot block lawful content, applications, services, or non-harmful devices. Finally, ISPs cannot unreasonably discriminate network traffic, such as providing particular services to certain websites, slowing down a website’s speed, or degrading a certain website’s quality.[v]These rules form the foundation of what net neutrality is and how it affects internet usage.

The end is near? Verizon v. Federal Communications Commission

These rules have been in place since time immemorial, however, a recent court decision, Verizon v. Federal Communications Commission, 740 F.3d 623 (C.A.D.C. 2014), has made their fate uncertain.

On Jan. 14, the U.S. Court of Appeals for the District of Columbia ruled in favor of Verizon, stating that the government can't force ISPs to adhere to net neutrality.[vi]  The issue was whether the FCC had the authority to issue its rules under the legal framework it had adopted, and whether it was subjected to the applicable administrative agency law.[vii]The court ultimately sided with Verizon. The court reasoned that,

Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”[viii]

In short, the court held that the FCC’s rules improperly regarded ISPs as regulated utilities, like telephone companies.[ix]The court did state, however, that the FCC had the authority to act as overseer of Internet services, so long as it encouraged competition.[x] Ultimately, net neutrality has not yet been completely dismantled and the court hasleft it open for the FCC to restructure their rules consistent with the court’s opinion.[xi]

Why this Matters

Some feel that the end of net neutrality is a good thing. Scott Cleland, an industry analyst and consultant for Fortune 500 companies, stated that the end of net neutrality, “respects the rule of law, Congress’ Constitutional authority it to set interstate communications policy, the Constitution’s protections, and court precedent.”[xii]He adds that it “encourages private investment and innovation” and asserts that it helps keep the free market competitive.[xiii]

Many feel differently about the end of net neutrality.  They suggest net neutrality’s demise would be a double edged sword; businesses and consumers alike would suffer. Businesses could no longer use the Internet as freely as before and would be subjected to the rat race of whoever has the most money, gets the biggest piece of the pie. An example in recent headlines is theComcast and Netflix made with one another. The two media giants signed an agreement that has established a more direct connection between them, allowing Comcast users who access Netflix to have a better experience.[xiv]  

Now, consider if these types of deals could be made across the board for all websites. While an established company like Netflix may be willing and able to pay, startups might not have those resources. If one of those new companies has a life-changing idea, it might not reach its audience efficiently.[xv] This decision could have serious implications for budding Internet start-ups who cannot pay the costs imposed by these bigger, overarching companies. Their websites would be slow and undesirable, costing them their businesses. Essentially, it would make the playing field so unleveled that there would be no competition or fair market interaction; basic tenants of what our society deems important for businesses to flourish.[xvi]

            This could also be a blow to businesses because chances are that if control is given only to a select few, much stricter censorship will follow. These ISPs could decide where to funnel the money to; essentially deciding what will be available, and what will not.[xvii]Additionally, without net neutrality, ISPs can more easily monitor Internet usage and gain information about the users.[xviii]This issue has been a serious one in the past year, heightening this fear would only exacerbate the issue. If the Internet becomes an undesirable place, businesses will lose out on its benefits.

Ultimately, the only true winners would be the ISPs.

The Future

            Many Internet campaigns, such www.savetheInternet.com, are urging Internet users to take matters into their own hands and advocate for net neutrality. Garnering support for net neutrality is important; however, the real work needs to be by the FCC in changing their structure so that they can regulate the Internet within existing frameworks. As of mid-February, the FCC was taking steps toward creating an administrative body that could work according to their constitutional limits. The New York Times states that the FCC has created a plan “with rules that would prevent Internet service providers from blocking any legal sites or services from consumers and would aim to restrict, but not outlaw, discrimination.” The new head of the FCC, Wheeler, has stated that he is aiming towards maintaining net neutrality, and will do so within the limits the court has set up.

If the FCC truly wishes to reinstate their Open Internet Rules, they will have to figure out a way they can rework their regulations in order for the court to rule that they are working in a way consistent with the Constitution.[xix] If not, the future is indeed uncertain for net neutrality and the rules of the Internet.

 



[i] Net Neutrality 101, freepress,http://www.savetheInternet.com/net-neutrality-101 (2014).

[ii] Id.

[iii] The Open Internet, Federal Communications Commission, http://www.fcc.gov/guides/open-Internet (2014).

[iv] Id.

[v] Id.

[vi] Berkman, Fran. What the FCC Net Neutrality Proposal Means for Your Internet, Mashable, http://mashable.com/2014/02/20/fcc-net-neutrality-Internet/ (Feb. 2014).

[vii] Yeh, Jennifer. The decision in verizon vs. FCC: a legal analysis, freepress, http://www.freepress.net/blog/2014/01/14/decision-verizon-vs-fcc-legal-analysis (Jan. 2014).

[viii] Verizon c. Federal Communications Commission, 740 F.3d 623, 628 (C.A.D.C. 2014).

[ix] Wyatt. Edward. F.C.C. seeks a new path on ‘net neutrality rules, The New York Times, http://www.nytimes.com/2014/02/20/business/fcc-to-propose-new-rules-on-open-Internet.html?_r=0 (Feb. 2014).

[x] Id.

[xi] Id.

[xii]  Crews, Clyde W. Court rules against net neutrality in Verizon v. FCC, Forbes, http://www.forbes.com/sites/waynecrews/2014/01/14/court-rules-against-net-neutrality-in-verizon-v-fcc/, (Jan, 2014).

[xiii] Id.

[xiv] Healey, Jon. Netflix’s deal with Comcast isn’t a sign of the apocalypse, Los Angeles Times, http://www.latimes.com/opinion/opinion-la/la-ol-netflix-comcast-net-neutrality-isp-consolidation-20140224,0,5246703.story#ixzz2uOtY2btd, (Feb. 2014).

[xv] The pros and cons of net neutrality, Phil for Humanity, http://www.philforhumanity.com/Pros_and_Cons_of_Net_Neutrality.html.

[xvi] Id.

[xvii] Id.

[xviii] Hudson, John. Pros and cons of net neutrality in two lists, The Wire, http://www.thewire.com/technology/2010/05/pros-and-cons-of-net-neutrality-in-two-lists/24598/, (May 2010).

[xix] FCC seeks new path. 

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