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Everything You Always Wanted to Know About Net Neutrality (but Were Too Busy Waiting for Netflix to Finish Buffering to Ask)

Dan Tynan
Tech Columnist
Yahoo Tech
May 29, 2014

Everything You Always Wanted to Know About Net Neutrality (but Were Too Busy Waiting for Netflix to Finish Buffering to Ask)

Dan Tynan
Tech Columnist
Yahoo Tech
May 29, 2014

If you’ve been reading the tech news over the past six months, you’ve surely heard the term “net neutrality,” surrounded by enough other techno-jargon to make your head spin. Forget all that. Here’s a simplified guide to what you need to know about net neutrality and why it’s important.

(Thinkstock)

What does “net neutrality” mean, anyway?
Since the earliest days of the Internet, back when it was just a handful of universities exchanging data at a leisurely 300 bits per second, nearly all network traffic has been treated equally, no matter what it was, who sent it, or where it was going. (Exceptions have included spam and malware.) That’s net neutrality. And as the Internet has grown, incorporating email, the World Wide Web, and voice and video services, that is how it has remained. All the content on the Internet was treated equally.

Until recently.

What’s changed?
In December 2010, the Federal Communications Commission issued its Open Internet Order, which codified net neutrality. It said Internet service providers were not allowed to block any lawful traffic or “unreasonably discriminate” against data flowing across their networks. (You can read all 194 fascinating pages here.) ISPs couldn’t manage voice or video data any differently from email or webpages. Comcast wasn’t allowed to throttle (slow down) traffic from Hulu that competed with its XFINITY TV video service, AT&T had to treat Skype calls the same way it did every other voice-over-IP service, and so on. With the order, the FCC took the long-established practice of net neutrality and made it government policy.

But a month later, Verizon Communications challenged the order, claiming that the FCC did not have the right to impose these rules. Last January, the U.S. Court of Appeals agreed, saying the feds lacked the authority under the Telecommunications Act of 1996. (Our own Rob Pegoraro elegantly unpacks the implications of that decision here.) The FCC announced that it would not appeal the decision and instead proposed a new set of rules in April 2014, which would retain most of the original order’s principles but allow ISPs to charge higher fees for better service.

Why do the big ISPs hate net neutrality so much?
In a word, money. By 2016, online video will account for nearly 90 percent of all Internet traffic, according to projections made by networking giant Cisco. For the past few years, video services like Netflix and Hulu have been able to attract millions of paying subscribers to their services without kicking back anything extra to the ISPs that are carrying their traffic, besides the usual standard connection fees.

That changed last February, when Netflix agreed to pay Comcast (and later Verizon) to guarantee faster delivery of entertainment programming to its customers. The agreement had a big impact on consumers: Complaints about how Netflix shows seem to buffer endlessly vanished virtually overnight.

Essentially, the larger ISPs want to charge content providers more for “fast lanes” that guarantee “quality of service” for traffic that needs it most, like video and voice. With the anti-discrimination rules of net neutrality dead in the water, there’s nothing to stop them from varying their rates based on the kind of data they see coming down the pipe.

Where’s this Internet “fast lane,” and how do I get on it?
There is no magic Internet fast lane. Mighty though they may be, AT&T, Comcast, and Verizon cannot improve upon the speed of light. The only way to make some Internet traffic reach its destination more quickly is to make the rest of it arrive there more slowly, or to install extra hardware or dedicated pathways — extra “lanes” — dedicated to prioritized traffic.

(Thinkstock)

This is where we revisit the well-worn Information Superhighway metaphor. (You knew that was coming, right?) On the Internet’s fiber-optic freeways, all data travels at the same speed. When it hits an off-ramp at your ISP, however, it could pass through a kind of tollbooth. Content providers who’ve paid for priority treatment get to zoom through the E-ZPass lane, while the rest line up and wait their turn.

OK, but what’s the big deal?
On a practical level, if video providers like Netflix are paying more, we will probably pay more. (If you think ISPs will use the extra revenue to cut you a break on your monthly bill, I’ve got a bridge to sell you.) Theoretically, access to non-prioritized Internet services could also become slower.

A bigger issue is what happens to Internet startups. Net neutrality advocates argue that allowing ISPs to discriminate against certain types of traffic would hamper innovation by giving enormous advantages to entrenched companies with deep pockets, making it harder for the next YouTube or Netflix to get off the ground.

Interestingly, a similar theme is employed by net neutrality opponents, who argue that imposing rules on the Internet would hamper innovation by making it look more like a public utility or Ma Bell circa 1970 — not exactly hotbeds of brilliant ideas or market responsiveness. And ISPs claim that without the ability to charge for priority service, they won’t have the capital or incentive to expand their high-speed networks.

How is this a free-speech issue?
Net neutrality advocates also argue that once ISPs start deciding whose bits get priority, they may then start throttling content they don’t like. The ACLU maintains a brief list of “abuses” (detailed here) where major ISPs have censored or slowed content they found objectionable — like when Comcast deliberately throttled peer-to-peer file sharing in August 2008 and got its hand slapped by the FCC. (This ruling was also later overturned by the U.S. Court of Appeals.)

Another concern is that service providers may give preferential treatment to their own stuff. Many of the largest ISPs control vast libraries of video content. Comcast, for example, already owns NBCUniversal and is attempting to swallow up Time Warner, which controls Warner Bros. and HBO. AT&T’s recent bid for DirecTV, if approved, will come with an enticing package of sports programming.

In a blog post, FCC Chairman Tom Wheeler maintained that whatever rules his agency ultimately adopts, “no legal content may be blocked,” and ISPs may not “[favor] traffic from an affiliated entity.” Whether the feds can actually enforce these things remains to be seen.

(jrwasserman/Thinkstock)

So net neutrality is dead?
Not necessarily. The FCC’s latest proposal is now open for public comment, and Wheeler has vowed to settle the issue by year’s end. This has, however, become an enormous political battle with heavyweights on both sides lined up and ready to rumble.

On one side you have the pro-neutrality forces, which include a multitude of consumer advocacy organizations and trade groups like the Internet Association, whose members include Amazon, Google, and Yahoo. (You can read the IA’s official statement on net neutrality here.)

On the anti-neutrality side you have some of the biggest cable-telco-pay TV providers on the planet, as well as networking companies like Cisco and anti-regulatory groups like TechFreedom.

Both sides agree that the FCC probably doesn’t have the authority to regulate the Internet as the Telecommunications Act is currently interpreted, but their solutions diverge wildly. Pro-neutrality people want the FCC to reclassify the Internet as a “common carrier” like landline telephone service, giving it much more regulatory authority. Neutrality opponents want the government to keep its hands off the Internet, or at the very least for Congress to update the dusty and increasingly irrelevant Telecom Act to make the rules more friendly to competition. (As Pegoraro notes here, it would be unwise to hold your breath while waiting for that to happen.)

Stuck in the middle: you and me.

Can’t you just change ISPs?
According to a 2012 study by the New American Foundation (read it here), U.S. Web surfers get slower broadband access than netizens in Europe or Asia, while also paying more for it. (Other studies have reached a similar conclusion.) Last week the American Customer Satisfaction Index, which measures how consumers feel about more than 200 companies, released its first report on ISPs. Broadband providers received an overall satisfaction rating of 63 percent — the worst score among all the 43 industries measured by the ACSI.

Of course, if you hate your ISP, you can always sign on with a competing one — assuming, of course, that there is a competing service provider in your town, and that its policies, pricing, or performance are any different. Good luck with that.

Or you could move to a city where Google is rolling out its 1-gigabit fiber service. (Currently Austin, Kansas City, and Provo, with nine more cities in the pipeline, so to speak — see the list here.) Google has vowed to observe net neutrality rules on its broadband networks.

Bottom line: Anybody who claims to know how the net neutrality fight will ultimately play out has his pants on fire. We may end up with an Internet that looks much like it does today, only with better and more expensive video and voice. Or the Internet could end up more closely resembling cable TV or wireless services, where the content and apps you’re able to access are determined by your service provider, not you. 

Questions, complaints, kudos? Email Dan Tynan at ModFamily1@yahoo.com.