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Net Neutrality

By | Published June 24, 2014

The Internet is a set of pipes. It’s also a set of values. Whose? The people who consider it a great social equalizer, a playing field that has to be level? Or the ones who think of it as a marketplace subject to the laws of supply and demand? It’s a philosophical contest that’s being fought under the banner of “net neutrality,” a slogan that inspires rhetorical devotion but eludes precise definition. Broadly, it means everything on the Internet should be equally accessible — that the Internet should be a place where great ideas compete on equal terms with big money. Even in the contentious arena of net neutrality, that’s a principle everybody claims to honor. Interpreting it is a different story.

The Situation

With Internet use and related costs rising fast, the U.S. Federal Communications Commission proposed in May to let Internet providers like AT&T offer better technology at a premium price to content companies like Netflix, mainly for faster delivery of video. If approved, the new FCC rules would mean that for the first time some Internet content could get preferential treatment based on how much a publisher pays, instead of on whether it improves a network’s technical efficiency. Critics said that would give deep-pocketed companies an unfair advantage over upstarts, stifling the development of a new generation of Googles and Facebooks, costing customers more and opening the door to corporate censorship. Supporters said it would simply create a “fast lane,” an improved alternate Internet where equals compete against equals. Both sides invoked “net neutrality,” as do countries with widely varying definitions of the principle. European regulators already allow higher fees for faster delivery. In South Korea, big companies have clashed over who should pay for the traffic burden. In China, access to content is regulated by the government for political reasons.

The Background

The term “network neutrality” was coined in 2002 by Tim Wu, a law professor and author who is running for lieutenant governor of New York. He argued that no authority should be able to decide what kind of information was and wasn’t allowed on the Internet. But Wu also recognized the expense of maintaining network hardware, so he proposed that providers should be allowed to charge based on usage. People would pay for more bandwidth, not for access to certain sites. In 2005, the FCC released a statement turning Wu’s principles into policies. When Comcast interfered with access to Web networks that used a lot of bandwidth and enabled trading of pirated content, the FCC balked. Comcast sued, and won. The FCC set new rules and this time Verizon challenged them, winning in a U.S. court in early 2014. That’s what started the latest round of rule-making.

The Argument

The FCC’s proposal would, if approved, probably result in more opportunities for business. That would mean fast lanes and possibly cheaper ones. Whether it would open the door to censorship, or simply create service tiers like telephone or cable TV plans, is fiercely disputed. Beneath the policy questions lies a philosophical one: Who owns the Internet? Content companies that pay for traffic? Providers who pay to maintain servers and bandwidth? Consumers who pay to connect? Who balances their competing interests? Wu says fast lanes could replace the open Internet with a “payola” system. Providers like Comcast say the law is on their side. Free speech advocates say a costly fast lane could aggravate the effects of income inequality. One solution is to reclassify broadband as a utility like the telephone, meaning the FCC could prevent discrimination by regulating U.S. prices. Internet providers claim that could restrain investment and technical progress. The FCC wants to know what you think.

The Reference Shelf

  • Professor Tim Wu coined the phrase “network neutrality” in a 2002 paper.
  • The FCC described how it wanted to preserve “the free and open Internet” in a 2010 report.
  • The Karlsruhe Institute of Technology in Germany issued a detailed “progress report” on net neutrality in 2012.
  • The comedian John Oliver has strong feelings about net neutrality. (He thinks it’s both boring and “hugely important.”)

(First published June 24, 2014)

To contact the writer of this QuickTake:

Edmund Lee in New York at elee310@bloomberg.net

 

To contact the editors responsible for this QuickTake:

Sarah Rabil at srabil@bloomberg.net

Jonathan I. Landman at jlandman4@bloomberg.net