What Is Net Neutrality? Here's How the Proposed FCC Rule Change Could Impact You

| NOV 22, 2017 | 3:22 PM
Pasted image at 2017_11_22 10_29 AM

Dan Ardura/IJR

In 2015, the Federal Communications Commission voted 3-2 to implement net neutrality rules and regulate the internet under Title II of the Communications Act. Now, that may be coming to an end — and the internet as we know it could change as a result.

What Is Net Neutrality?

In the simplest terms, net neutrality uses government regulations to ensure a fair internet. Under net neutrality, your internet service provider (ISP) must treat all data equally. An ISP cannot intentionally slow down or impede your access to certain content.

Without net neutrality, your ISP could choose to favor certain content on the internet. They could take money from companies to provide favorable access to their content, while slowing down their competitors. If your ISP wanted to, they could slow down certain sites to a crawl until you agreed to pay even more to access them.

Here's a sample of what the internet could look like without net neutrality regulations:

Even more concerning to some users are the inherent conflicts associated with giving that power to ISPs. Both Comcast and Time Warner own stakes in the Hulu streaming service. Without net neutrality regulations, they could theoretically throttle, or slow down, access to Hulu's competitors such as Netflix or Amazon Prime.

But these aren't just hypotheticals. When challenging FCC rules in 2014, Verizon attorney Helgi Walker stated exactly what the company would do without net neutrality regulations:

During the oral argument in the case, the federal judges questioned whether Verizon actually intended to create a “two-sided market” — charging both its subscribers and the companies who wanted to reach them.

“I'm authorized to state by my client today that but for these rules, we would be exploring those types of arrangements,” Verizon's attorney, Helgi Walker, said at the time.

If the internet is an information superhighway, net neutrality allows all the cars to travel freely. Without it, ISPs would be free to set up toll booths, fast lanes, and roadblocks as they see fit.

Why Do Some People Oppose Net Neutrality?

The main argument against net neutrality is that the regulations impede the free market. Opponents believe the business side of internet access would grow and that open internet would still thrive without government regulations.

Current FCC Chairman Ajit Pai said as much in a Wall Street Journal op-ed explaining his intention to vote against the regulations:

We have proof that markets work: For almost two decades, the U.S. had a free and open internet without these heavy-handed rules. There was no market failure before 2015. Americans weren’t living in a digital dystopia before the FCC seized power. To the contrary, millions enjoyed an online economy that was the envy of the world. They experienced the most powerful platform ever seen for permission-less innovation and expression. Next month, I hope the FCC will choose to return to the common-sense policies that helped the online world transform the physical one.

In the eye's of net neutrality opponents, when the government lets go of the industry, the free market will step in and give the consumer a voice. In theory, if one company wants to charge you a premium to access certain content, another company will come along and offer access to that content for less — or even for free.

Ultimately, opponents of net neutrality believe that customers will wield enough influence through a free market to deter ISPs from dabbling in undesirable practices, and the business would be better off without government influence.

So Is That Really the Case?

It's complicated.

The business of internet access in America isn't exactly a vibrant free market. According to ArsTechnica, 10.6 million American households don't have access to internet service with a download speed of at least 25 megabytes per second. An additional 46.1 million households have access to just one provider offering at least 25 Mbps.

Even if you look past speeds of available service, the outlook is still bleak. Based on 2014 data from the FCC, 28 percent of households only had one option when it came to wireline broadband service. 37 percent of households had access to two providers, and only 33 percent had access to three or more.

It's true that in many industries the free market allows consumers to impact how businesses choose to operate. But with many Americans facing the choice between a single provider for high-speed internet or no high-speed internet at all, it's unclear how much influence the consumer would actually hold.

What Happens Next?

The FCC will vote on the proposed rule change on December 14. In all likelihood, that vote will pass.

FCC Chairman Ajit Pai's new proposal would only require that internet service providers “be transparent about their practices so that consumers can buy the service plan that’s best for them and entrepreneurs and other small businesses can have the technical information they need to innovate.”

From there, some oversight would fall to the Federal Trade Commission, but consumer advocates have warned those efforts would be largely toothless.

Please note: This is a commentary piece. The views and opinions expressed within it are those of the author only and do not necessarily reflect the editorial opinion of IJR.