In 2015, it seemed like net neutrality had finally been settled. After all the hearings and judicial appeals had ended, the Federal Communication Commission (FCC) enacted new rules that gave it extra powers to enforce the principle of net neutrality. But now there’s a new administration, and it has appointed Ajit Pai to be the FCC’s new chairman. And Pai would like to roll those rules back.
Net neutrality means that anything on the internet—music, TV shows, pictures of your cat—gets to travel through the web from anyone to anyone at the same speed as everything else. This is the way the internet has always worked, explains Amanda Lotz, a professor of communication studies. But if the FCC rolls back its enforcement rules, it might not be the way the internet works in the future.
Internet service providers (ISPs) want to create a fast lane that would allow them to charge content providers, such as Netflix or Facebook or even educational institutions like U-M, an additional fee to make their content travel more quickly through the Web. In such a scenario, explains Lotz, these additional costs would be passed to customers. Content providers that opt against paying for this fast lane would be stuck in crowded, low-speed lanes—and their users would be, too.
This would be a major change because the internet has always been a universe with a weirdly level playing field in which tiny companies can compete with the behemoths in their fields. Ideas and innovations have gotten traction in part because networks processed data blindly, without regard to where it came from or who made it. The FCC’s 2015 decision to enforce net neutrality recognized that the internet has become so central to all aspects of our lives that it needed additional regulation to prevent discrimination.
The new FCC chairman, Pai, argues for a different approach. Rather than preemptive regulation, Pai wants the FCC to wait and address abuses as they arise. He believes preemptive regulation limits competition, investment, and innovation.
Signed by President Franklin D. Roosevelt, the Communications Act of 1934 established the Federal Communications Commission in an effort “to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.”
But Lotz contends that competition has flourished under net neutrality. “Television delivery has become much more competitive as many internet-distributed services, such as Hulu Live and DirecTV Now, have entered the market,” she points out. What’s more, she says, reversing net neutrality’s unfettered access to streamed content jeopardizes such innovation. “It risks sending viewers back to giant, expensive cable bundles,” she says, “which is also a major revenue stream for ISPs.”
As far as competition goes, Lotz says the focus should be on the ISPs themselves. “Aside from major cities on the East Coast, consumers don’t have much choice when it comes to ISPs,” she continues, “which has allowed them to become an industry with a poor track record for customer service.”
The companies also have less-than-stellar record for providing customers with the services they pay for. “In February 2017, New York State Attorney General Eric Schneiderman filed a lawsuit against Time Warner for systematically defrauding consumers by failing to provide service at contracted speeds,” Lotz says by way of example. “In March 2017, New York City sued Verizon for failing to serve over a million homes with promised fiber connections.
“The ISPs are just the most recent of a long history of often-monopoly communication companies that have acted anticompetitively,” Lotz continues, “from the telegraph service of Western Union through the days of phone service monopolized by AT&T.”
Telecommunications: Looking Back 80 Years
To understand the implications of the FCC’s net neutrality rules, it helps to understand how we got here. In 1934, President Franklin D. Roosevelt signed the Communications Act that first created the FCC. The law charged the FCC with regulating wire and radio communication to make those services fast, efficient, and available to everyone at a reasonable price. In 1996, the law became the 1996 Telecommunications Act, and included an entirely new technology: the internet.
In 1996, it was unclear how the internet would be used. We did not yet know that cell phones would compete with local and long-distance phone companies, or that video streamed over the internet would compete with cable and broadcast television. As they evolved, the new technologies didn’t fit neatly into the Telecommunications Act’s categories and there was disagreement about how to classify them.
In the 1990s, some users entered the information superhighway through their phone service’s dial-up connection. Others used their cable providers’ service. Both telephone and cable services were ISPs, but because they used different kinds of technology they were regulated differently. In 2002, however, the FCC classified all ISPs as information services—a category that falls under Title I of the Communications Act.
It’s significant that ISPs were not classified as common carriers, which are companies that must provide communication services to the public indiscriminately. Common carriers fall under Title II of the Communications Act, which means the FCC has the power to regulate them.
In 2010, the FCC released the Open Internet Order, which created rules designed to protect net neutrality. In January 2014, however, the Supreme Court overturned the FCC’s order because it said the FCC cannot regulate Title I technologies—it can only regulate Title II. In 2015, it seemed net neutrality had been decided when the FCC voted to regulate the internet with Title II rules.
Pai has tried to rally support for eliminating these rules by arguing that these laws are simply outdated. Lotz disagrees, and sees this as the latest example of communication providers using their extraordinary power to work against the public good.
“Whether it’s the railroads in the 1800s, the telephone company in the 1900s, or ISPs now, the analogy holds up,” she says. “It is just as uncompetitive to allow the richest companies to make users pay for faster service or to prevent competition as it was when the companies were Ma Bell and railroad tycoons.”
Beginning May 18, Pai will introduce his proposal to roll back open internet rules and to change the way the web is regulated. Such changes would make the future of online shopping, gaming, and TV viewing uncertain. What will happen? Stay tuned.