Earlier this week, the FCC announced tentative plans to end their policy that broadband internet providers must carry all web traffic to users at equal speeds (i.e. equal priority) regardless of source. The old policy is known as “net neutrality” because it didn’t allow providers to cut deals with certain websites to weigh some traffic more highly than others.
The FCC, which is tasked with regulating some forms of communication in the public interest, says they had to make the change in response to a recent Supreme Court ruling, because (they argue) net neutrality has already effectively been ended and companies will start making deals with each other without oversight and this way they can apply some amount of oversight.
I think a lot of people disagree with that contention, but regardless of the reasoning, the decision to stop promoting neutrality as a goal is a disaster.
Speed inequality is going to cut off many small businesses and new e-commerce enterprises at the knees. Existing web giants like Amazon or Google will be able to pay (even if they’d prefer not to) to maintain their paramount status (as long as they don’t get into fights with providers like Netflix often does), while new start-ups will fizzle before they can launch because their content will be too slow for consumers, by comparison. In other words: More power to the old money (or existing money, at least).
The days of anyone having an equal opportunity to take a good idea, launch it, and bring it to the American people on the strength of its merits and word-of-mouth will be over for good.
The internet’s commercial success in the United States has been based heavily on equality of opportunity — and decades of government-funded research and development into the technologies that led to its emergence into general society.
In an editorial in The New York Times opposing the FCC’s rules change, the board argues that this long public support for the internet’s initial development means the government should have a role in regulating to maintain equality of service:
the viability of those networks are based on decades of public investments in the Internet, the companies’ use of public rights of way and, in the case of some companies, a long government-sanctioned monopoly over telephone service. Public interest groups like the American Civil Liberties Union and Public Knowledge oppose the creation of two-tiered Internet service because it offers no public benefit, but would squelch innovation.
Well beyond the net neutrality problem, the FCC’s Bush-era decision to designate broadband as “a lightly regulated information service” instead of a more heavily regulated “telecommunications service” is causing all sorts of legal issues.
For example, while it’s illegal for the phone company to disconnect an elderly person’s landline service for not paying the bill on time (or due to a mix-up), it is not illegal for phone companies to disconnect voice-over-internet telephone replacement services to elderly customers. If the check gets lost in the mail and then you have a medical emergency, you are out of luck if you have a VOIP phone instead of a landline.
So, the Times Editorial Board’s recommendation to change the classification (a move the politically influential providers obviously oppose) would be the simplest solution to many of the problems currently arising from broadband providers abusing the regulatory gaps — and it would circumvent the U.S. Supreme Court’s ruling.
But fundamentally, the loss of net neutrality is just bad for business and American innovation in general, because speed inequality removes the level playing field we’ve all been operating on so far. As the Times Editorial Board says:
The Internet has been a boon to the economy and to free speech because it is not divided into tiers and is open to everybody in the same way.
In 2007, President Obama said one of the best things about the Internet “is that there is this incredible equality there” and charging “different rates to different websites” would destroy that principle. The proposal from Mr. Wheeler, an Obama appointee, would do just that.
Conservatives often say they don’t want government regulators and lawmakers picking and choosing “winners and losers” instead of the free market. But ending net neutrality does exactly that: it picks all the current leaders as the winners and makes it very difficult for new competitors to emerge as market challengers against the incumbents.
That’s why we need to have regulation in some areas of the market. Market freedom isn’t free.