Everything You Need to Know About Net Neutrality

The FCC is set to decide whether Internet providers are like utilities
Illustration by 731

Most Americans take it for granted that the companies they pay for Internet service treat all websites more or less the same. Google loads about as fast as Yahoo! Videos streaming from Netflix play as clearly as those on Amazon.com or Hulu. Going online, in other words, is like using the phone: Everyone’s calls go through at the same speed.

It may not be that way forever. In January, a federal appeals court found that the Federal Communications Commission didn’t have the power to enforce rules enacted in 2010 that stopped Internet service providers such as Verizon from playing favorites among companies that send data over broadband networks. Playing favorites violates the principle widely referred to as “net neutrality.”

Now the FCC is considering rules to replace those the court threw out. After months of public debate, the commission held its final town hall-style meeting on the issue on Oct. 7. Two days later, President Obama reiterated his support for net neutrality. “It is what has unleashed the power of the Internet,” he said at a town hall in California. “We don’t want to lose that or clog up the pipes.” Tom Wheeler, the FCC chairman, has said he plans to hold a final vote before yearend. FCC press secretary Kim Hart says there is no official timeline for a vote.

This spring, Wheeler floated the idea of allowing Internet providers to charge for priority access to their networks. Netflix and others have warned that would hand the country’s largest Internet providers—Verizon, Comcast, Time Warner Cable, and AT&T—unfair power over companies that depend on the Internet to deliver their services. “That has all the ingredients of a mob shakedown,” late-night host John Oliver, a proponent of net neutrality, said in a segment on his HBO show, Last Week Tonight. He encouraged viewers to post comments on the FCC website as the agency developed a formal proposal. The FCC’s site crashed because of heavy traffic shortly after Oliver’s segment aired, and the agency says it had received 3.7 million submissions by the time it stopped taking comments in September.

Advocates of net neutrality want the FCC to reclassify broadband as a telecommunications service, making it subject to Title II of the 1996 Telecommunications Act. That would be a victory for net neutrality, because it would mean that Internet service providers would be treated like phone companies, which are not allowed to discriminate among customers. “It will either be we win on Title II or we lose,” says Marvin Ammori, a fellow at the liberal New America Foundation and an advocate of reclassification. “The court decision leaves very little choice for a third way.”

Broadband providers say reclassification would subject them to a range of outdated rules that were written for telephone companies. “Reclassification,” lawyers for AT&T wrote in a May letter to the FCC, “would cause risks and harms that would dwarf any putative benefits.” The company argued that a move to regulate broadband networks would hinder the administration’s efforts to expand access to high-speed Internet service. AT&T also suggested that a reclassification would force it to comply with regulations that require telecommunications providers to collect fees that subsidize service in rural areas. AT&T said that would “amount to a substantial tax on Internet use.”

Wheeler, Obama, and the trade association that represents many of Silicon Valley’s biggest companies—the Internet Association—haven’t taken public positions on reclassifying the Internet service providers. Berin Szoka of TechFreedom, a libertarian think tank, says that if the FCC doesn’t vote for reclassification, Wheeler will have to extract some concession from Internet service providers to satisfy the proponents of net neutrality. “He’s got to offer something to people pushing it,” Szoka says.

Wheeler has suggested he may be willing to throw concessions to Netflix and the other content companies, like regulating interconnection fees they pay to cable providers. Several major telecommunications mergers are under review, giving Wheeler additional leverage over Internet service providers. He could also threaten to add rules for wireless networks, which were largely exempted from the 2010 regulations. AT&T and Verizon are the country’s two largest wireless service providers.

Yet some say it’s likely that whoever loses when the FCC votes on the new rules—Verizon and the other Internet providers or Netflix and its fellow streaming services—will challenge the result. “Whatever they do,” says Texas Representative Gene Green, a Democrat who opposes reclassification, “ultimately will end up in court.”

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