Net Neutrality

by Michael Gariffo

Copyright 2023, Faulkner Information Services. All
Rights Reserved.

Docid: 00021000

Publication Date: 2303

Report Type: TUTORIAL

Preview

Net neutrality is a term coined by law professor Tim Wu in 2003 to describe the policy of treating all data traveling over a given network with complete equality, regardless of its source, nature, or destination.  While the original definition of the term included all types of electronic networks, it has evolved over the years to primarily refer to the agnostic treatment of data on the public Internet. With Internet access coming closer and closer to being considered a basic human right, ensuring the freedom of the data flowing across it has become a more important issue than ever.

Report Contents:

Executive Summary

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Net neutrality was given a major shot in the arm by the Federal
Communications Commission’s 2015 Open Internet rules. However, despite a
300+ page document outlining the US government’s stance on how data must
be treated, the concept of net neutrality is once again at a tipping point
in its history. The protections outlined in the Open Internet report were
relatively short lived because, while former FCC Chairman Tom Wheeler (the
author of the original order) was net neutrality’s greatest proponent, his
successor, Ajit Pai who reigned during the Trump Administration, became
its greatest nemesis. Wheeler saw the Open Internet Order (OIO) as
the ultimate expression of ensuring that the Web will remain the largely
wide-open, level playing field the world has come to know. However, Pai
believed that the public’s best interest lies closer to what many telecom
operators and collaborative industry groups would prefer: that it become a
financial battleground where corporations, Internet service providers
(ISPs), content providers, government agencies, and consumers battle for
preferential treatment while generating vastly increased revenue for the
network operators who control the quality and speed of a privately
controlled Internet.

Consumers and most governments would prefer that net neutrality be
strictly adhered to by all actors on the Web. ISPs, on the other hand,
would rather restrict data speeds, network access, and other
characteristics of data transit in order to create an artificial demand
for faster speed and more broadband access. Not only would this create an
additional source of revenue for ISPs willing to charge for an Internet
“fast lane,” but it would allow them to curtail the performance of
competitors’ products when accessed over their networks. Imagine, for
example, a Verizon customer being forced to stream content provided by a
Comcast/Xfinity affiliate at a slower speed than they could stream
Verizon’s own content.

This is exactly the type of private interference that the FCC had
successfully banned from the public Internet in the US with its Open
Internet Order. However, several major ISPs and telecom operators found a
new ally in the Trump Administration’s FCC chair. Pai’s opposition to
Wheeler’s idea of net neutrality is not a new phenomenon; he and his
fellow Republican members of the FCC had been consistently and vocally
opposed to Wheeler’s Open Internet rules, often calling for the order to
be investigated for signs that the Obama administration had undue
influence on its creation and claiming that it would stifle innovation.
However, it was not until the introduction of Ajit Pai as the chair of the
FCC that Republicans were successful in having the Open Internet Order
repealed. The “Restoring Internet Freedom Act” effectively imposed a death
sentence on net neutrality at a federal level.

Yet, despite the best efforts of the Trump administration, net neutrality
is not going down without a fight. Efforts are currently underway by the
Biden administration, in the US Congress, at the state level, and in
federal courts to block the repeal and to either have it reversed or to
enshrine its tenets at a state level. Net neutrality appears to be, like
many widely praised ideas, harder to kill that some would like.

Description

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Net neutrality refers to the agnostic treatment of data traveling over a
given network. This means that all data is allocated the same resources
regardless of its source, content, or destination. Within the context of
the public Internet, this becomes important to the millions of invested
parties producing, receiving, and managing data every day. However,
accomplishing this ideal is also much more difficult, given the fact that
data travels over a patchwork of systems and infrastructure owned by
thousands of major stakeholders, all of whom have their own agendas and
needs.

To this point in its history, the public Internet has largely been an
open network. This is primarily because it was designed for openness from
its inception. However, as more telecom operators, content providers, and
private parties become major players on the Web, more personal interests
have evolved. This has created a desire by some stakeholders to exert more
authority over the portions of the Internet that they control. This desire
could result in something relatively benign like optimizing a carrier
network for that carrier’s own products. However, it can, and has, easily
skewed into less beneficent policies, such as purposely slowing the
traffic of competing providers or of “undesirable” content types. Although
optimizing a network does essentially no harm to the Internet at large,
even a seemingly benign change such as this represents the slippery slope
on which the modern Web finds itself. When small network optimizations and
modest traffic shaping are allowed to proliferate, then larger and larger
liberties may become acceptable, eventually transforming the Internet from
the “dumb pipe” it was designed to be into the “walled garden” many fear
it is becoming.

Preventing negative changes to a public resource is exactly the reason
why regulators exist. In the US, regulation of the Internet has primarily
been the duty of the Federal Communications Commission (FCC). Given that
the Internet, especially in its early days, often utilized the same
infrastructure that supported telephone and fax transmission, the
assignment of the FCC to its governance was a fairly obvious, if not
ideal, choice. In its role, the FCC had, until 2016, been a friend to net
neutrality, supporting its ideals both in philosophy and in practice.
However, the regulator was, for a very long time, limited in its ability
to police the Internet due to the fact that IP-based connectivity,
primarily broadband which does not run over legacy landline
infrastructure, is not classified as a utility. Internet providers long
opposed a reclassification of this type, as it would expand the FCC’s
purview and its ability to enforce a concept like net neutrality would
become much greater. Fearing an exertion of this level of power led most,
if not all, financial stakeholders in the Web to plead with the FCC to
leave broadband under its previous classification. While many contested
that a reclassification would lead to a more open Internet, those who
stood to benefit from a more stratified Web claimed it would stifle
innovation and reduce investment in broadband infrastructure as a whole.2

Despite the fears and opposition maintained by many major industry
players, the FCC in 2015 went ahead with its plan to reclassify broadband
as a utility. This gave the agency additional power to regulate the
Internet and how it is managed by major stakeholders, and was an attempt
to give it long-term tools to police and maintain the concept of net
neutrality on the Web.

However, with the installation of Chairman Ajit Pai, the agency’s stance
on the Open Internet Order was reversed. What was once considered a major
achievement by the FCC in its quest to protect consumers was suddenly
being labeled as a gross misuse of the FCC’s powers and derided as the
agency’s attempt to apply an out-of-date set of telecom regulations to
modern broadband networks. Evidence supporting the supposed harm that net
neutrality would cause remains lacking. But, that did not stop the Trump
Administration and Chairman Pai from going ahead with their planned repeal
of the Open Internet Order, replacing it with their much derided Restoring
Internet Freedom Act. This bill purposely strips the FCC of its ability to
protect consumers from essentially all of the “Bright Line” facets of the
Open Internet Order, leaving them open to being the targets of paid
prioritization, content blocking, questionable throttling practices, and
more. While the new law does call on the FTC to take over some of the
policing duties formerly handled by the FCC, it does not require them to
participate in anywhere near the same capacity as the FCC was expected to
under the Open Internet Order. All of this, however, assumes that the
Restoring Internet Freedom Act is allowed to stand. It has been under
almost constant legal challenge on multiple fronts.

Current View

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Democrats Pro, Republicans Con

Net neutrality is the perfect example of a political football. The
Democrats (President Obama) established net neutrality; the Republicans
(President Trump) erased it, and, now, the Democrats (President Biden) are
trying to reestablish and reinvigorate the concept.

In July 2021, President Biden signed an executive order that encouraged
the FCC to restore net neutrality rules.

“Companies discriminatorily slowing down
internet access: Big providers can use their power to discriminatorily
block or slow down online services. The Obama-Biden Administration’s FCC
adopted “Net Neutrality” rules that required these companies to treat all
internet services equally, but this was undone in 2017.

“In the Order, the President encourages the
FCC to:

“Restore Net Neutrality rules undone by the
prior administration.”

To help implement the order, President Biden nominated to the FCC now
Chairwoman Jessica Rosenworcel and OIO advocate Gigi Sohn, whose
confirmation has so far been blocked. As reported by analyst Mona
Bushnell, “Both previously expressed support for net neutrality and the
necessity for the FCC to reestablish federal authority over broadband
carriers.”3

The California Resistance

Providing some much-needed impetus to pro-net neutrality initiatives, the
State of California maintained its own brand of net neutrality, even while
federal standards were being withdrawn.

According to analyst Bushnell, “The Californian net neutrality rules made
it unlawful for Californian ISPs to block, degrade or impair internet
traffic, receive money for prioritizing certain sources, or interfere with
a user’s ability to access the internet. While the local law was
unsurprisingly challenged by national ISPs like AT&T,
[Comcast/Xfinity], and Verizon, [a January 2022] appeals court’s ruling
halted their efforts. The decision creates an opportunity for other states
to adopt net neutrality legislation of their own.”4

The Case for Preserving Net Neutrality

Beyond the simple pro and con arguments, consider this. The type of behavior
a company undertakes when violating the tenets of net neutrality would not
be condoned in any other area of business. The United States and most other
developed countries of the world have laws and guidelines in place to
prevent monopolies and anti-competitive behavior. These ensure that
start-ups, entrepreneurs, and inventors have every opportunity possible to
shake up the status quo by introducing new and better versions of existing
products and services, even if they threaten to disrupt established markets.
Not only does this benefit commerce as a whole by fostering competition and
encouraging advancement, but it also provides a much better chance that the
end user or consumer will be receiving the best product possible at the best
price the market will support.

A famous example of a company being forced to comply with this legal
philosophy occurred when the US filed an antitrust suit against Microsoft
for using its monopoly-like presence on Intel-based computers to control
Web browser and operating system sales.5 In that case, which
Microsoft eventually settled out of court, the company was accused of
using its control over the marketplace to force consumers into choosing
its own products and services by bundling them and ensuring that the
majority of home PCs sold were optimized for them. This is a very close
analogue to the “pay to play” marketplace that the likes of Verizon and
Comcast/Xfinity would like to create by offering their own streaming
services on an optimal level, while requiring that Netflix pay a fee in
order to deliver its offering to consumers at the same level of quality.
There are, of course, numerous technical and technological factors
differentiating the two examples. However, the basic concept of purposely
prioritizing ones own products and services over those of a competitor is
one that the modern court systems in the US and Europe have been unwilling
to countenance in any other area of technology.

Finally, there is the fact that the Internet is thought of by most of the
world to be one of humanity’s greatest success stories. Despite being only
three decades old, the Web has provided the human race with incalculable
benefits in the form of communication, scientific advancement, and
entertainment. During that entire time, it was able to grow and evolve
thanks to the fact that no one party could restrict it for its own gains,
nor could they stifle the ability of any other party to innovate. With
this type of open Internet having proven its ability to thrive for more
than 30-plus years, there is little or no compelling reason to change the
way things work now.

Outlook

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Democrats and other proponents of net neutrality are pursuing a two-part
strategy designed to secure equal protection for all Internet users on a
permanent basis.

Phase 1 involves passing the Net Neutrality
and Broadband Justice Act, which will reclassify broadband Internet
services as telecommunications services under Title II of the
Communications Act. This maneuver will permit the FCC to reinstate net
neutrality as it existed during the Obama Administration. Importantly, it
also prevents the FCC from reclassifying broadband access in the future
(when, for example, the Republicans next claim the White House and appoint
another anti-net neutrality chairperson).6

Phase 2 involves getting Gigi Sohn, a pro-net
neutrality Democrat, appointed to the FCC. Currently, the five-member
commission has only four members, two Democrats and two Republicans. Sohn
would give the Democrats the majority they need to reinstate net
neutrality. Sohn claims her confirmation is being blocked by a
telecommunications industry that fears a “pragmatic, pro-competition,
pro-consumer policymaker.”7 She has been awaiting the necessary
approval since 2021.7

Whether net neutrality is ultimately restored is unclear, as partisan
politics continues to control the regulatory landscape.

In the end, however, the debate may not matter since the public seems
generally satisfied with the Internet status quo, and what seemed like a
critical issue a couple decades ago does not have the same resonance
today.

References

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  • 1 Wu, Tim. “Network Neutrality, Broadband Discrimination.”
    Journal on Telecommunications and High Technology Law. 2003.
  • 2 Rodriguez, Salvador. “Internet Providers Urge FCC Not to
    Reclassify Broadband As a Utility.” The Los Angeles Times. May
    14, 2014.
  • 3 Mona Bushnell. “FCC Kills Net Neutrality: What It Means
    for Business.” Business.com. February 21, 2023.
  • 4 Ibid.
  • 5 “253 F.3d 34: United States of America, Appellee v.
    Microsoft Corporation, Appellant.” Justia. February 26, 2001.
  • 6 Chao Liu and Katharine Trendacosta. “New Proposal Brings
    Us a Step Closer to Net Neutrality.” Electronic Frontier Foundation.
    August 22, 2022.
  • 7 Tyler Wilde. “Pro-Net Neutrality FCC Nominee Says ISPs
    Are Doing Everything They Can to Keep Her Out.” Future US, Inc. February
    15, 2023.

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About the Author

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Michael Gariffo is an editor for Faulkner Information
Services. He tracks and writes about enterprise software and the IT
services sector, as well as telecommunications and data networking law.

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