Explainer: On the Cusp of Sea Change, Broadband Breakfast Examines the Net Neutrality Debate

With a change in the guard at the Federal Communications Commission and the White House, the United States is on the cusp of a possible change in direction with respect to its network neutrality rules.

By the summer of 2018, the country had changed its position on the issue when the Trump-era FCC voted to roll back Obama-era rules that, in 2015, cemented rules bolstering net neutrality. The roll-back essentially allowed the telecoms to manage and give preferential treatment to certain traffic that run on their networks.

But something changed. It started when the Department of Justice — the new one under the administration of President Joe Biden — withdrew a lawsuit started under Trump’s presidency against California for its proposed net neutrality rules. After the internet service providers lost a legal challenge to the proposed rules, California became the first state to implement the new legislation.

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Then the Biden White House appointed Tim Wu, a fierce advocate for and who coined the term “net neutrality,” to the National Economic Council this year.

There’s an emerging debate across the country about whether more states will follow suit or if a federal-level plan will emerge first.

Before that’s answered, Broadband Breakfast is taking a step-back and has put together an explainer on the issue to get you up-to-speed on its history and what’s at stake.

• Broadband Breakfast Explainer 1 (Net Neutrality): On the Cusp of Sea Change, Broadband Breakfast Examines the Net Neutrality Debate
• Broadband Breakfast Explainer 2 (Spectrum): Is Spectrum Sharing a Key to Broader Connectivity Goals?
• Broadband Breakfast Explainer 3 (Section 230): With Florida Social Media Law, Section 230 Now Positioned In Legal Spotlight
• Broadband Breakfast Explainer 4 (Antitrust): Antitrust Heats Up as Biden Selects Tech Critic Jonathan Kanter for Top Enforcement Spot

What is net neutrality?

Net neutrality is the concept that traffic on networks cannot be blocked, slowed, accelerated or otherwise altered by internet service providers. In essence, it is the concept that legal internet activity must be treated equally.

The term was coined by Columbia University media law professor Tim Wu in 2003, in a paper about online discrimination. It was an extension of the longstanding concept of a common carrier, used to describe the role of telephone systems as infrastructure that simply transports traffic from one destination to the next with no influence.

The common carrier concept in common law countries says that, regardless of who is using the internet, what content is on it, the website being accessed, or the platform and application it is operating on, nothing will be discriminated against or favored more than another.

What happens when net neutrality is abandoned?

When net neutrality rules were rolled-back in 2018, the ISPs struck. According to Bloomberg, citing research out of Northeastern University and the University of Massachusetts, Amherst, wireless carriers have since slowed internet traffic to and from applications like YouTube, Netflix, and Microsoft’s Skype video chat service.

Proponents of zero-rating, the concept that includes apps not counting against users’ monthly data allowance, said it would provide for opportunities for those to experience these services without incurring cost – perhaps in overage charges. Opponents, however, argued it could possibly create an information divide, whereby the less advantaged would be forced to consume certain services and not others.

The rocky history of net neutrality

In the early 2000s, the Federal Communications Commission (FCC), a U.S. regulatory agency, required broadband providers to share their infrastructure with competing firms. In 2005, those requirements were struck down by the Supreme Court. The debate at the time was trying to determine if broadband service providers should also be considered as information services, which allows users to publish and store information online or on telecommunication services.

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The Obama administration approved net neutrality rules in 2015. This partially barred ISPs like AT&T and Comcast from purposefully increasing, sometimes called throttling, or decreasing speed access to websites based on demand or business preferences.

On the Obama White House Archives site, it says that most internet providers have treated internet traffic equally, “that an entrepreneur’s fledgling company should have the same chance to succeed as established corporations, and that access to a high school student’s blog shouldn’t be unfairly slowed down to make way for advertisers with more money.”

On February 26, 2015, the FCC voted in favor of strong net neutrality rules and on June 14, the same year, the U.S. for the District of Columbia fully upheld the FCC’s net neutrality rules. The Obama administration called it a victory for “the open, fair, and free Internet as we know it today.”

On November 21, 2017, FCC Chairman Ajit Pai, appointed by former President Trump, unveiled a plan to roll back the Obama administration rules. The plan went into effect on June 11, 2018, and on October 1, 2019, the D.C. Circuit Court of Appeals upheld the FCC’s plan to repeal most of the provisions of net neutrality but struck down a provision that would block states from implementing their own open internet rules. Chairman Pai said in a statement that the appeals’ decision was a “victory for consumers, broadband deployment, and the free and open Internet.” “The court affirmed the FCC’s decision to repeal 1930s utility-style regulation of the Internet imposed by the prior [Obama] Administration,” the statement said.

In 2018, the Senate voted to overturn the repeal of net neutrality but the resolution stalled in the House. The House then put it to a vote again in 2019 under the “Save the Internet Act,” but it was effectively dead in the water, at least until 2021.

In favor of net neutrality

Advocates in favor of net neutrality focus on providing smaller companies equal opportunity to thrive. By not allowing ISPs to determine the speed at which consumers can access certain websites or online services, smaller companies will be more likely to enter the market and create new services. Smaller companies are protected in the sense that they may not be able to afford “fast lane” access, while larger, more established companies can.

These advocates for net neutrality point out that several well-established social network websites were created without much seed capital. Had these small businesses been forced to pay extra in order to be as accessible online as their competitors, success may never have come.

Proponents of net neutrality include:

• Human rights organizations
• Consumer rights advocates
• Some software companies

These groups argue that cable companies should be deemed “common carriers,” similar to public utility companies or public transportation providers, who are by law, forbidden from discriminating among their users.

Public Knowledge, a non-profit Washington, D.C.-based public interest group focused on competition, digital choice in the marketplace, and an open standards and end-to-end internet, is in favor of net neutrality.

It says that without net neutrality rules, “ISPs like Verizon and Comcast can prevent users from visiting some websites, provide slower speeds for services like Netflix and Hulu, or even redirect users from one website to a competing website.” Public Knowledge claims that consumers would ultimately be hurt by anti-net neutrality policies, bearing the additional costs on things like their monthly Netflix bill or in the cost of goods from a local online store.

Against net neutrality

Advocates against net neutrality focus on investment incentives and cost concerns for broadband infrastructure. If ISPs are forced to treat all internet traffic equally, the government will ultimately discourage the investment in new infrastructure, and will also see ISPs be slow to innovate. Upfront costs with laying down fiber optic cable can also be very expensive. They say that not being able to charge more for more challenging areas of access will make the investment harder to pay off.

Opponents of net neutrality include:

• Conservative think tanks
• Major telecommunications providers
• Some hardware manufacturers

Telecommunication providers argue that “they must be allowed to charge tiered prices for access in order to remain competitive and generate funds needed for further innovation and expansion of broadband networks, as well as to recoup the costs already invested in broadband.”

Having less oversight on internet service by allowing some ISPs to charge for access to some content would lead to free access to certain sites, reports IT Pro. For example, if ISPs charged more money to bandwidth-hungry companies like Netflix for using their infrastructure, they could offer access to sites like Wikipedia or Facebook for free—even if a consumer had no internet contract.

Net neutrality controversies

The repeal of net neutrality rules has exposed some of the complexities of allowing ISPs to do what they wish with internet traffic. That isn’t more true than for the vertically-integrated providers, who both own the networks and content services that run on them. This has created a debate about possible anti-competitive behavior: what would stop a provider to block or slow traffic on a competing service and speed-up or eliminate data usage on their own services?

That’s exactly what happened with AT&T’s WatchTV streaming service, which was a new product in 2018, following its acquisition of Time Warner (now WarnerMedia). That year — after California backed down from cracking down on zero-rating —  the service gave subscribers the option of a subscribing to a bundle of channels with no charge against their data allotment. (After California made its net neutrality legislation law this year, AT&T axed its zero-rating practice in the state and said it would likely have to do the same with the rest of the country.)

And then there were the 2018 California wildfires, some of the worst in the state’s history.

The bombshell from that was the Santa Clara fire department alleging Verizon had throttled its services, which “had a significant impact on our ability to provide emergency services,” the department said, according to Ars Technica.

The evidence was submitted as part of a lawsuit to reinstate federal net neutrality rules.

The telehealth question

The wildfires incident may take some bite out of the argument that net neutrality rules should be loosened to allow special exemptions to emergency services, but it’s quickly becoming a hot topic for another emerging segment: telehealth.

The Covid-19 pandemic has effectively upended the traditional in-person setting for nearly everything. But it’s especially problematic for medical services.

Critics of the net neutrality law in California are reportedly concerned that a telehealth app, VA Video Connect, whose use doesn’t count against users’ data caps, may be blocked under the legislation.

Boost Mobile, seeing the emerging opportunity, recently announced that it is bundling telehealth services with its packages.

There are exemptions that can be made in state and federal laws for emergency and health services, so time will tell what those could look like.

The future of net neutrality

As the federal government still has net neutrality on the ropes, states have stepped in to guard the internet’s traffic neutrality. Both proponents and opponents of net neutrality have argued that internet freedom will prevail if their side wins.

As of January 2021, 19 states, including the District of Columbia and Puerto Rico, introduced legislation in the 2020 legislative session that supports net neutrality.

Though some have taken net neutrality into their own hands, such legislation, even on a state level, can be challenging to implement. The FCC has claimed only itself has the authority to make these kinds of regulations, and that local and state governments cannot pass laws inconsistent with federal net neutrality rules.

In October 2019, a federal appeals court ruling in October 2019 largely upheld the decision to abolish net neutrality, “but ordered the FCC to examine its effect on public safety, federally subsidized broadband services, and utility pole regulations.”

Join the Broadband Breakfast Live Online “Ask Us About Net Neutrality” on Wednesday, May 12, 2021. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.