No Net Neutrality? No Problem
The latest announcement regarding the repeal of the Obama-Era’s net neutrality laws have sent the internet into a period of skepticism regarding the future of the Internet as we know it today. But an internet without net neutrality may actually be beneficial to the average consumer.
The December 14th vote facilitated by the United States FCC (Federal Communications Commission) resulted in a 3–2 vote in favour of repealing net neutrality. Even though support for net neutrality is shared by the vast majority of citizens and companies alike, the decision to change the underlying structure of the internet came down to the likes of only five individuals, to which FCC chairman, Ajit Pai, issued the tie-breaking vote in favour of repealing.
Not only is this announcement a shock to the world as its consequences can have far-reaching effects, but the terms under which this decision has been made can be viewed as one of the most notable un-democratic decisions made by the American Government in recent memory.
The People’s Word Counts For Nothing Without A Fact-Based Argument
A study carried out by the University of Maryland found that 83% were opposed to repealing net neutrality, including 75% of Republicans, as well as 89% of Democrats and 86% of independents. The sample size of 1,077 registered American voters may not be entirely representative of the opinions shared by the majority populace, but these findings still help to affirm societies’ stance on net neutrality.
A larger sample more representative of the populace comes in the form of an independent analysis carried out by Emprata, LLC, a consulting firm specializing in advanced data analytics. The company accessed the full dataset of comments submitted to the Federal Communications Commission’s (FCC) “Restoring Internet Freedom” docket and performed a comprehensive, independent analysis of the comment data, which, at the time of their analysis, had evaluated 21.766 million comments in the docket. Their findings conclude — after deducting spam and duplicate comments — that 13 million people (60.1% of all comments) from various countries around the world were against the repeal of net neutrality, where 8.6 million (39.5%) were in support of the repeal.
Despite the overwhelming evidence in favour of maintaining net neutrality, Pai’s proposal says that the tens of thousands of complaints do not prove that net neutrality rules solve any real problems. “The Commission takes consumer complaints seriously and finds them valuable in informing us about trends in the marketplace, but we reiterate that they are informal complaints that, in most instances, have not been verified,” the proposal said. Indeed, much of the response to this decision stems from emotional bias, and because of this, the FCC does not have to even consider comments without proper factual grounds. This is precisely why protests and petitions will ultimately fail to make any immediate impact in the outcome of this case; it will be concrete evidence against the repeal of net neutrality that could potentially reverse this decision, not a nation-wide social-media slaughtering of FCC chairman, Ajit Pai.
The FCC’s decision to withhold a rebuttal against every opinion-fuelled comment they receive is entirely understandable, but the decision to go through with a repeal of net neutrality despite the widespread opposition is questionable. What is even more dumbfounding is the fact that a policy that can potentially impact every American internet user — and even international users for that matter — has been placed in the hands of five people. Despite this, the law to repeal net neutrality has been passed, and will take full effect in 2018.
Net Neutrality in America is Gone For Now, What Does This Mean For The Average Consumer?
Ajit Pai stands by his notion that the repealment of net neutrality will not have any significant implications on the consumer’s internet experience. The majority asserts otherwise.
The Internet in the US has flourished under the order established by the Telecommunications Act of 1996. The goal of this law was to let anyone enter any communications business — to let any communications business compete in any market against any other. Up until now, the internet has functioned on a basis that Internet Service Providers (ISPs) display all websites at the same speed to all sources of internet traffic. This foundation allows for a fair distribution of data across the entire world wide web, regardless of which website you are on. For example, under net neutrality, Facebook and MySpace will receive equal broadband access regardless of the fact that Facebook is a much larger company and can afford greater bandwidth capabilities for their website than MySpace can.
Think of it this way: The Internet Service Provider is the road, and the website is the car in traffic. Net Neutrality facilitates an equal road where no car has any special privileges to skip traffic. A road without net neutrality resembles a highway with a high-occupancy vehicle lane or a highway where you pay to travel faster. Thus, without net neutrality, ISPs can now legally dictate internet loading speeds for websites under their domain, meaning that they now have the power to dictate how fast information can be processed under certain websites. In other words, they have the ability to open up a new highway and charge vehicles to travel on that highway, allowing them to get to their destination faster, while everyone else is stuck in traffic.
Without net neutrality, ISPs are now open to a whole new range of possibilities that don’t necessarily hurt the consumer, but can prove consequential to the way ISPs carry out business from now on. There is however, no critical evidence to suggest that ISPs will engage in paid prioritization practices, even though they will be legally allowed to do so. Notable internet service providers Comcast, AT&T, Verizon, Sprint, and others, have all made claims that they have no intentions of blocking, throttling, or allowing paid prioritization for certain websites under the new regulations. As stated in the FCC Fact Sheet, the FCC will “require ISPs to be transparent. Disclosure of network management practices, performance, and commercial terms of service is important for Internet freedom because it helps
consumers choose what works best for them and enables entrepreneurs and other small businesses to get technical information needed to innovate.” Thus, if ISPs want to block websites, throttle your connection, or charge certain websites more, they’ll have to admit it to the open public.
Another notable development in this law is the abandonment of the 2015 Title II order, which reclassified broadband Internet access service as a telecommunications service subject to regulatory obligations. This abolishment of utility-style regulation over the internet could help restore a transition of market-based policies that are more naturally suited to managing the Internet. What this means is that individual consumers, not the government, decide what Internet access service best meets their individual needs. On the surface, the FCCs new laws aim to foster a more personal internet browsing experience that is separated from arbitrary government regulation.
Free markets are structured in such a way that allows for maximum efficiency and profitability. As is the case with any government-regulated industry, innovation is slow and the prevalence of monopolistic control is all the more attainable. Without net neutrality, and more specifically, with the return to a more free-market oriented world wide web, suppliers and consumers are now free to act in their own best interest, rather than simply being subject to arbitrary government control over a vast public resource.
The realization that ISPs can now dictate the flow of information across the internet may not actually be a burden to consumers, but rather, a sound strategy to save the average consumer both time and money. Say you want to spend an evening watching Netflix and your internet service provider is Verizon. What used to cost you $14.99 a month for a monthly subscription to Netflix content that loads at x Mbps may now cost you $10.99 a month at x+z±1σ Mbps. That is, a situation where you can subscribe to a website at a lower fee with higher loading speeds within one standard deviation of the mean time for loading speeds (variance is present due to lower accessibility to Internet in rural areas). This outcome could be attainable given that ISPs restructure internet plans that can better fit consumer preferences. Without burdensome government regulation that outlines an arbitrary and outdated formula for content consumption, ISPs will have to change the way they facilitate broadband connections because there will be more competition present in the telecom Industry.
A report conducted by Ed Naef and Alex King from CMA Strategy Consulting concluded that more than 10.6 million US households have no access to wired Internet service with download speeds of at least 25 Mbps, and an additional 46.1 million households live in areas with just one provider offering those speeds. The US Telecommunications industry has been functioning as an oligopoly and as a result, has failed to adequately innovate, resulting in an overpriced, sub-par service.
As explained by John Cassidy of The New Yorker, “we pay far more for broadband Internet access, cable television, and home phone lines than people in many other advanced countries, even though the services we get aren’t any better. All too often, they are worse.” Cassidy goes on to explain that, “In France, a country often portrayed as an economic and technological laggard, the monthly cost of these packages is roughly forty dollars a month — about a quarter of what we Americans pay. And, unlike in the United States, France’s triple-play packages include free telephone calls to anywhere in the world. Moreover, the French get faster Internet service: ten times faster for downloading information, and twenty times faster for uploading it.”
The combination of absurdly high prices with lackluster services is a direct result of “Congress bowing to the monopolists, or quasi-monopolists, and allowing them to squelch potential competitors.” Internet consumers in the US rarely have any variety in regards to choosing an internet service provider, which has led to the abysmal performance of this sector. Interestingly enough, the lack of consumer choice in the Telecom industry eerily resembles their lack of choice for elected government officials. Just as voters are subject to choose between Democrats and Republicans, they often only have the choice between a cable operator, such as Comcast, and a telephone provider, such as Verizon. The lack of competition in this industry allows ISPs to provide inadequate services for an exuberant price and maintain steady profitability. The repeal of net neutrality will change this, for better or for worse.
Likely Outcomes
The possible outcomes of the decision to repeal net neutrality are difficult to pinpoint. You may argue that without neutrality, ISPs will be able to directly influence what movies you watch, what products you buy, and what websites you subscribe to. It is also plausible to assert that by limiting government influence in the Telecom industry, the prevalence of new entrants into this industry may increase drastically, regardless of entry costs, resulting in a more efficient internet for all.
Although many notable ISPs have commented on the recent law change, stating that they will not tamper with internet loading speeds, it is very likely that this could happen, which has been the primary cause for outrage among many Internet consumers.
However, what some don’t realize is that this repeal may possibly be the most beneficial thing that has happened to the US Telecom industry since the 1996 Telecommunications Act.
Let’s consider a hypothetical situation where Verizon significantly slows down the loading speed of Netflix while speeding up loading times for Hulu. Initially, many Netflix users are outraged at the sudden drop in loading times and express their frustration to Verizon. Ready for the backlash, Verizon publishes an open statement on their website noting that the cause for the decreased loading speeds for Netflix is intentional, and that if users want to watch their shows at an acceptable speed, they will either have to,
a. Purchase a premium Netflix membership priced at $19.99 a month that will ensure adequate loading speeds
b. Purchase a premium Verizon package (priced at 25% higher than what they would normally pay) that allows top-tier access to all websites without interruption
c. Cancel their Netflix membership and sign up for Hulu, which has faster, more dependable loading speeds.
d. Cancel their membership to Verizon since they are providing inconsistent internet loading speeds for their favourite website, Netflix
The majority in opposition of Net Neutrality will have most likely thought out this situation and seen it as an inevitable lose-lose situation for the consumer, where the nasty, profit-hungry corporations will continue to bleed them dry and hurt their internet experience. This is a situation that is being popularized across the web, and in every case it has been presented, those arguing in opposition to the repeal fail to address the most glaring result of an Internet without Net Neutrality: It will become a free and open market.
It is human nature to immediately reject change, especially when it affects something that is interwoven into almost every aspect of our life. It is easy to misinterpret the Net Neutrality controversy and simply bypass it as another government plot to enslave the public and ruin the internet, but that is simply not a tangible outcome.
Let’s revisit our hypothetical situation and see how this could play out in a realistic, business-oriented framework. In this instance, regardless of whether the consumer chooses any of the four outcomes, it is very likely that the following outcomes will occur:
a. Verizon will receive huge backlash for their decision, which will be made public for everyone to see. Many customers affected by their attempt to steer traffic over to Hulu will simply cancel their membership. Many more customers not directly affected by this decision will also leave as they fear that a similar situation may be possible and could affect them personally. Ultimately, Verizon will not receive any adequate profits from this decision and will lose a substantial customer base, all while being subject to violent ridicule via news outlets and social media.
b. Amidst Verizon’s mis-step, demand for alternative internet service providers will immediately skyrocket, and with the Telecom industry now existing with far less government regulation, the likelihood of new entrants will also increase. The cost of starting up a Telecom company will still be very high, but the promise of profitability will also be greater than ever with thousands of consumers leaving Verizon and demanding a new provider take place. As is now the case, if a consumer chooses to leave Verizon, they may only have two or three other alternatives. But with a free and open market, they will soon have dozens, just as a consumer has many choices at a car, a phone, and a newspaper.
c. Ultimately, Verizon will have to renege on their decision to block traffic to Netflix as they are losing customers to emerging competition. They will apologize to their customers and offer an even lower subscription package to those who return. Unfortunately, they will not return, as the new entrants are now able to provide faster internet at a much lower cost than Verizon because they have brought better technology to the forefront, something the major American ISPs have not been able to do.
As a result of Verizon’s mis-step, consumers who purchase an internet package from new entrant XYZ will be able to subscribe to Netflix for $10.99 a month with guaranteed loading speeds that are not only better than Verizon’s with a $19.99 Netflix subscription, but are also faster than what was ever attainable under the Title II Order.
This hypothetical situation can be applied to hundreds of different outcomes stemming from a post-net neutrality Internet, but they all point to one solidified conclusion: Internet in the United States will now be more accessible, and will have more ISPs providing Internet with even faster loading speeds at a lower cost. Basic economic fundamentals only solidify this argument: more firms means more competition, and more competition results in lower prices and better products for consumers.
Gregory L. Rosston, and Jeffrey S. Steinberg, of Stanford University further prove this notion in their paper: Using Market-Based Spectrum Policy to Promote the Public Interest, their Abstract reads:
With the increasing demand for spectrum to accommodate emerging technologies, and the discovery that higher frequencies are usable, the FCC has replaced its reliance on administrative mechanisms for allocating spectrum with a more flexible, market-based approach. The FCC can best accomplish its mission of promoting the public interest by continuing to rely on competitive market forces and by establishing a clear and consistent paradigm for approaching allocation, assignment, usage, and other policies. Such a paradigm envisions an FCC that would actively monitor spectrum to remedy situations in which it is not used to its full value; establish mechanisms to reduce new services’ need for immediate secondary market transactions; set and enforce minimally restrictive baseline rules governing interference and health effects; maximize the amount of spectrum available to users; and, in some cases, intervene in markets to correct significant market failures.
As explained by Rosston and Steinberg, the new approach outlined by the FCC will allow for a more flexible, market-based approach that will be free from inhibitive government regulation. The internet has undoubtedly grown into the most powerful technological advancement of our time; then, why allocate the managerial responsibilities of accessing this technology to a government? Instead, let the free market dictate the best course of action in terms of information allocation and broadband access and see if consumers can adjust. This is precisely what the FCC is opting for with the decision to repeal.
Closing Statements
It is very likely that the FCC will have to make various changes to their net laws in the future if the outcome of a post net-neutrality Internet is burdensome to the consumer. It is also very likely that the protests being organized to bring back net-neutrality will do nothing to sway the opinion of the FCC, as it is difficult to constructively come to a conclusion based on factual information with government officials when there are thousands of angry protesters screaming behind you.
For those who are well versed on this matter and are still against the FCCs new law, you could make a greater impact by yourself by writing a fact-checked proposition to the FCC, than one-thousand protesters can by yelling on a street. This decision was made out of socio-economic reasons; the FCC does not care if they have severely impacted your ability to access the internet if you cannot back up your argument with factual evidence to prove your point.
Another notable concern is how the absence of net neutrality in the US will affect the internet around the world. Almost all of the major websites used around the world (Facebook, Google, YouTube, Instagram, Twitter, Snapchat) are American. Skeptics believe that without net neutrality, these companies will have to begin charging subscription fees in order to use their services. If the previous free-market argument holds true, this clearly won’t be the case, but yet again, the outcomes for this decision are difficult to accurately predict; anything could happen.
Overall, the FCC’s decision to repeal net neutrality will serve as an important transition from an government-facilitated Internet to one that is subject to the forces of the free market. Even if the FCC has to revise their laws regarding net neutrality, it is unlikely that they will ever return to the structure present under the Title II order established in 2015. The following years will likely involve decisions that further restrict or further allow government access to the Telecom industry. Market forces will dictate whether this law is applicable to the Internet and the FCC will surely respond to the situation as they deem fit. It is worth noting that the FCC has done nothing to act against the common interest of the public, although popular opinion will disagree.
Once the dust from this controversial law settles, the days of net neutrality and an internet facilitated by the government could be long gone. In five years time, the repealment of net neutrality may possibly be viewed as one of the better decisions carried out by the US government in recent memory.
Thank you for reading. Please comment and let me know your thoughts on net neutrality. Please ‘clap’ for this article if you think others will benefit by reading it as well.
