Net Neutrality & Other Misnomers

I happened across an article on net neutrality today where AT&T was lobbying the Federal Communication Commission (FCC) to moderate their expectations on nondiscrimination rules for internet service providers.  (See article here)

I suspect a fair amount of internet users could care less about this debate.  In some parts of our nation, internet access is nearly ubiquitous, with the advent of iPhones, free Wi-Fi hot spots, and the expansion of broadband networks by big companies like Verizon and Comcast.  With all of this technology available to us, most users probably take internet access for granted.  And I doubt too many users think much about bandwidth limits or network priority when accessing a web site.  For most, typing in search terms in google or a URL in the browser address bar almost always takes them to somewhere they were trying to get to.  And so, net neutrality sounds like some far away monster that some fictional knights are trying to slay.

At its heart, net neutrality is a regulatory command to U.S. internet service providers to not discriminate against certain content that may appear on internet sites.  So, for example, net neutrality rules might prohibit a service provider like Verizon from blocking or reducing the priority of traffic from a web site like youtube or hulu.com.  Priority in networking is typically the way network managers ensure that critical traffic always gets to its destination, while less important traffic waits.  In terms of the overall internet, internet service providers might decide that email traffic is more important than downloading videos, and therefore, your email would always reach its destination but your youtube videos might stop and start or not load at all.

Corporate network managers deal with this problem regularly because businesses generally cannot afford to buy all the bandwidth that their users could use.  This is based on a principle similar to the growth in hard drive storage: in spite of the near exponential growth of hard drive storage space over the last twenty years, computer users continue to find more stuff to fill up their hard drives with.  Bandwidth is the same way.  The more bandwidth available, the more users will use.

The larger internet service providers ultimately will face these same kinds of challenges for the consumer-end of the internet user market.  Most consumers today pay some kind of flat rate for internet access.  Fios, for example, gives you a 10-30 megabit circuit for a flat rate of less than $100 a month.  Residential DSL and residential cable internet access are similarly priced.  For that matter, most cell phone data plans are also flat rate.  I suppose one answer to this is to go back to a pay-for-usage model, where consumers are billed at some kind of per megabyte or gigabyte of internet usage each month.  Those that use more, pay more.

I can’t say I’m a huge fan of this approach, but the truth is that, perhaps unfairly, a minority of consumers likely use the bulk of the available bandwidth to access the internet.  So, the rest of us probably are paying in part for the usage of others, and there is a kind of unfairness about that.  On the other hand, no consumer pays an incredible amount, because the overall cost of operating the entire internet infrastructure is distributed across many many millions of users in the U.S. and globally.  So, you might view internet access as another entitlement, like basic health care or shelter.

The rumblings about net neutrality take another form, however, and that is the fear that internet service providers may make deals with certain content providers (like hulu), where the service provider allocates more bandwidth (or a higher priority) to hulu over competing video sites.  So, if you want to view a video and it is available on several content providers, but your service provider has a deal with hulu, the video will work properly when you go to hulu and maybe not if you go to hulu’s competitors.  Thus, the service provider will tend to cause its users to favor the site that works, and the truth is that you wouldn’t likely even know why that is.  And then, the service providers would control the world, just like the underpants gnomes from Southpark.

Well, maybe not, but exclusivity arrangements between service providers and content providers would likely run smaller operations out of business.  This would probably be bad for competition.  It might even be antitrust worthy if the providers on both sides are large enough to corner a market.  Do the service providers want to be further regulated?  Of course not.  But should our internet not discriminate against certain content?  Probably.  In fact, if government actors can’t discriminate based on viewpoint under the first amendment, the FCC can only choose to implement a non-discrimination regulation, or take no action at all.  If the FCC were to sanction service provider discrimination against certain kinds of content that is otherwise lawful solely because of the viewpoint of that content, those injured content authors might very well be able to state a constitutional claim against the FCC’s regulation.

Practically today, however, much of this is a theoretical problem.  But the principles that the FCC is trying to foster – that we should not leave the censorship to internet service providers – is a sound principle.  In practice, some discrimination is required to ensure that some large networks will work for all that connect to them.  And discrimination against illegal content that is dangerous to your credit card account or results in malicious destruction of property is likely necessary.  But I’m not convinced that these issues should just be left to the free market to figure out, anymore than I want Microsoft to tell me what I can or cannot say on a public street corner.