Issue Report: Network neutrality

Is network neutrality legislation a good idea?

Background and context

Network neutrality (also net neutrality, Internet neutrality) is a principle proposed for user access networks participating in the Internet that advocates no restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed, as well as communication that is not unreasonably degraded by other traffic. The principle states that if a given user pays for a certain level of Internet access, and another user pays for the same level of access, that the two users should be able to connect to each other at the subscribed level of access. Though the term did not enter popular use until several years later, since the early 2000s advocates of net neutrality and associated rules have raised concerns about the ability of broadband providers to use their last mile infrastructure to block Internet applications and content (e.g. websites, services, protocols), particularly those of competitors. In the US particularly, but elsewhere as well, the possibility of regulations designed to mandate the neutrality of the Internet has been subject to fierce debate. Neutrality proponents generally claim that telecom companies seek to impose a tiered service model in order to control the pipeline and thereby remove competition, create artificial scarcity, and oblige subscribers to buy their otherwise uncompetitive services. Many believe net neutrality to be primarily important as a preservation of current freedoms. Opponents of net neutrality characterize its regulations as “a solution in search of a problem”, arguing that broadband service providers have no plans to block content or degrade network performance. These and other arguments are outlined below in this article.
For more background: Wikipedia: Network Neutrality, Network neutrality in the United States

Competition: Does net neutrality protect competition?

Does net neutrality protect competition?

"Protect Net neutrality." St. Petersburg Times Editorial. April 10, 2010

“Without Net neutrality rules, the big telecommunications and cable providers could decide to start charging Web sites for faster delivery or prefer content providers associated with their own conglomerates. This would crush innovation and competition by giving the biggest companies the ability to nudge smaller start-ups out of view.”

Net neutrality saves Internet as ideal marketplace

Doc Searls. "Net Neutrality vs. Net Neutrering." Linux Journal. March 3, 2006

“By framing the Net as a neutral place, we assure that it will continue to serve as what it has already been for more than ten years: a public marketplace where private enterprise of all forms can not only grow and thrive, but can do both better than it ever has anywhere, ever, before.”

W/o Net Neutrality, price discrimination risks stifling start-ups

Robin Chase. "Zipcar-Like Data Innovation Counts on Neutral" Bloomberg Government. March 03, 2011

“Without the Internet (and wireless data transmission), Zipcar could not have become a mainstream service. It would not exist. Incredibly, this fundamental asset is in serious jeopardy in America, putting at risk our ability to innovate and to compete. The U.S. House of Representatives is trying to block the Federal Communications Commission from implementing a network neutrality order it issued in December. If the House action is successful, it will put small entrepreneurs at a disadvantage because we can’t pay the tolls for faster speeds and quality of service that the big guys can, and it may help them create groups of users that we can’t access at all. We could not compete.”

Insufficient broadband market choice to deter bad behavior

"There Isn't Enough Broadband Market Choice to Prevent Bad Actors." Save the Internet on Opposing

“The network owners have argued that Network Neutrality is unnecessary because there is sufficient competition in the broadband market to deter bad behavior. They argue that if Verizon degraded access to a site or discriminated against the use of one service in favor of another, they would anger customers who would move to another network operators in the area. […] Consumers must have robust competition and multiple choices for this theory to work. But such competition does not exist, and it isn’t likely to exist in the foreseeable future.”

Markets force network owners to play fair and neutral

"EDITORIAL: Net neutrality. Another solution in search of a problem." March 18th, 2010. Las Vegas Review-Journal

“Internet service providers know their customers are a fickle lot. After all, consumers have lots of choices. If a company decides to sign on more subscribers than its network can accommodate without making corresponding investments in capacity, those subscribers won’t stand for having their computers seize during routine browsing and searching. They’ll jump ship. Companies have no incentive to hurt one group of paying customers in favor of another.”

Existing laws check unfair practices by broadband owners

"Existing Laws Already Guarantee Your Open Internet." Hands Off the Internet on Opposing

“This is one of the most overlooked points in the Net neutrality debate: Existing laws and regulations ALREADY GUARANTEE an open Internet. The Communications Act of 1934 (Title 1) gives the federal government power to protect consumers from online discrimination. Amazon is one of the strong corporate supporters of Net neutrality regulation but even its spokesman has agreed that this gives the FCC power to take action if presented with unfair business tactics by broadband providers.”

Network neutrality damages competition and niche suppliers

Arpan Sura. "The Problem With Network Neutrality". FreedomWorks. May 2, 200

“Network neutrality also is bad for competition. Differential pricing of content allows competition among ISPs. If a company wants to adopt a policy of network neutrality, it is free to do so and win market share from consumers who find this attractive. If a company wants to favor video or voice content, it can find consumers and applications providers who use the Internet primarily for this purpose. […] Niche companies that want to offer only a small fraction of the Internet can flourish, too. Imagine, for example, a company that allowed cell phone users to access sports scores and only sports scores through its Internet portal. If that company were upfront about restricting its service to a limited part of the Internet, this would not be a nefarious idea. Many people would find it quite convenient. But it would nonetheless be banned if network neutrality legislation were passed. Network neutrality will destroy many entrepreneurial ideas like this one.”

Equality: Is it important for all sites to be treated equally?

Net neutrality prevents discrimination between sites

"Access and the Internet." New York Times Editorial. August 29, 2009"

“On the Internet today, a Web site run by a solo blogger can load as quickly as any corporate home page. Internet service providers, including leading cable and phone companies, want to be able to change that so they can give priority to businesses that pay, or make deals with, them. […] A good bill that would guarantee so-called net neutrality has been introduced in the House. Congress should pass it, and the Obama administration should use its considerable power to make net neutrality the law.”

Network owners have a profit incentive to price discriminate

"Openness is a Fundamental Principle of the Internet." Open Internet Coalition

“The large phone and cable companies who provide access to the Internet have the incentive and ability to create a special fast lane for big companies that can afford to pay steep tolls, while everyone else is left in a digital dirt road.”

Net neutrality properly separates Internet access and content.

Network owners or Internet Service Providers are considered the gatekeepers of the Internet. They control access. And, this access should be differentiated from the actual content on the web, so that network owners stick to providing fees for access at a flat rate, without regulating and/or pricing (differentially) content.

Net neutrality allows some sites to hog bandwidth

"Editorial: Net neutrality not so neutral." OC Register. September 25th, 2009

“One difficulty with government guaranteeing entitlements at the expense of others is the problem of those who abuse the free ride. Bandwidth-hogging services such as person-to-person file sharing and downloadable video from sites like YouTube and Google strain network capacities. Broadband providers legitimately claim they have a right to regulate such traffic over their networks, which may mean giving priority to their own services or charging varying rates. […] That’s why large bandwidth providers such as Verizon and AT&T have opposed previous ‘net neutrality’ proposals. Their networks would be abused. And that’s why operations like Google want net neutrality mandated by federal regulations. They could offer services without sharing the whole cost to provide them over broadband networks.”

Net Neutrality is a solution in search of a problem

Arpan Sura. "The Problem With Network Neutrality." FreedomWorks. May 2, 2006

“Solution in Search of a Problem. Currently there are no principles of network neutrality encoded into law. So ISPs are already free to block or favor content as they please. It is telling that none of them has. In fact, no proponent of network neutrality can cite an existing problem to which network neutrality is a solution.”

Some data should be allowed to move faster

"EDITORIAL: Net neutrality. Another solution in search of a problem." Las Vegas Review-Journal. March 18th, 2010

“A market exists to charge a premium to guarantee the immediate delivery of huge volumes of content and information — think videoconferencing and big data downloads and transfers — so why shouldn’t a business be free to enter it? Especially if it keeps costs down for smaller customers?”

Consumers: Does net neutrality benefit consumers?

Net neutrality protects freedoms and openness of the Internet

As co-inventor of the Internet Protocol Vint Cerf has stated, “The Internet was designed with no gatekeepers over new content or services. A lightweight but enforceable neutrality rule is needed to ensure that the Internet continues to thrive.”

Net neutrality protects consumers under near monopolies

"Consumers Deserve Protection". Open Internet Coalition on Opposing

“In a more perfect network, the telephone and cable companies would be investing in more capacity in order to render these issues moot. In a more perfect marketplace, there would be 4 or 5 high-speed broadband competitors offering consumers ample choice and providing a market-based check on violations of Net Neutrality – so consumers could pick a provider that respected the open Internet and didn’t interfere with open access. […] But we all live in an imperfect world with a gross lack of capacity and competition. As a result, we need a referee to ensure networks remain open and the incentives to innovate and invest will continue to exist. Ceding this role completely to the network operators to decide will result in a different, more closed, and less useful kind of Internet.”

W/o net neutrality Internet has fast and slow lanes

"Hey internet entrepreneurs, nuts to you." The Economist. Apr 6th 2010

“THE writers at this blog don’t really care about today’s appeals court ruling, which concluded that the FCC lacks authority to regulate net neutrality. Why should we? The paper will pay whatever Comcast or any other connectivity provider charges to make sure our bytes get out to the masses at a reasonably high speed. At least, we think it will. Unless the Financial Times or Forbes offers more. Then the magazine will have to ante up, or face discriminatory second-class service. Perhaps Comcast will start demanding “ultra business elite” fares on our packets if we expect them to reach that last mile just as fast as those from the FT. Then, of course, they might offer the FT the Sapphire Express rate on their packets, with an absolute guarantee that packets will arrive faster than the competition. […] As much as such services are worth to us, they’d obviously be worth vastly more to Bloomberg or Dow Jones. A guarantee that time-sensitive financial information will arrive milliseconds ahead of the competition can be worth billions when you’re trying to move markets. How could a last-mile connectivity provider possibly explain to its shareholders a decision not to take advantage of this opportunity, to offer ‘priority packet service’ to time-sensitive information companies and induce them to engage in a bidding war?” Having such fast and slow-lanes, while potentially advantageous to an individual company, is not good for customers and browsers, who must constantly deal with these inconsistencies.

Net neutrality impairs development of broadband infrastructure

Network Service Providers need money to expand the critical broadband infrastructure that enables streaming data over the Internet. Many argue that the need for this expansion will rise exponentially as the demand for multimedia and streaming video grows dramatically (such media involves more bits of data, and thus takes up more broadband space). Network Service Providers envision a tier system for charging different content-providers for varying levels of broadband use. It is claimed that the revenue from this would be used to help expand the broadband infrastructure. Without such funding, network providers argue that the infrastructure will be insufficient and that consumers will suffer from slower Internet speeds. Because Network Neutrality blocks such a tiered system from emerging, many believe it prevents network owners from raising the revenue needed to make the investments that will build the robust Internet of the future.

Net Neutrality will raise prices for users

"Want Net Neutrality? It’ll Cost You." Hands Off the Internet on Opposing

“If you want more affordable Internet access, then you have to be concerned about higher prices from neutrality regulation. When Net neutrality emerged in Congress in 2006, a Forrester Research analysis predicted that if Congress passed it, ‘Legal costs will shoot through the roof – draining the pockets of everyone involved.’ Guess who’ll wind up paying? […] Net neutrality’s complex pricing regulations would create a legal loophole that pushes the huge cost for tomorrow’s Internet entirely onto the Net user. A net neutrality law would let Google, Amazon and other large online companies avoid paying anything toward the cost of deploying these networks.”

Net Neutrality may restrict value-added services

David Farber at Carnegie Mellon, whom Wired once called “the Paul Revere of the Digital Revolution," wrote in a letter to Congress

“The problem is that some of the practices that network neutrality would prohibit could increase the value of the Internet for customers.”

Openness of Internet limits network owner control

In the case of Comcast restricting BitTorrent, the CATO Institute argued on Opposing that, “users took matters into their own hands and began swapping tips for evading Comcast’s interference. Many of them started using an encrypted variant of the BitTorrent protocol that was able to sneak by Comcast’s filters. Even if Comcast had wanted to continue blocking BitTorrent traffic, its efforts would have gotten less effective over time, as more and more users switched to the encrypted version of the program. […] The moral of the story is that ownership of a platform does not confer power to control how that platform is used. History is full of examples of users using technology in ways that defied the wishes of its creators.”

Net neutrality "replaces technological solutions with bureaucratic oversight.

We may see an Internet future not quite as bright as we need, with less investment, less innovation and more congestion.

Network owners: Is Net Neutrality good for ISPs?

Net neutrality may not be good for ISPs, but good overall.

It is not essential that network neutrality be good for Internet Service Providers, so long as it is judged good for the public and websites overall, and sufficiently tolerable for ISPs. A good analogy is any piece of consumer protection regulation, such as seat belts or food-packing industry regulations, which certainly cost the businesses under consideration a little bit of money, but do so in the interest of the general public. Therefore, any conclusion that net neutrality is somewhat harmful to network owners does not mean that the idea of network neutrality is, overall, a bad idea.

Net neutrality provides legal consistency that is good for ISPs.

By setting out clear rules about what is acceptable and what is unacceptable behavior, ISPs will avoid getting into trouble like Comcast did when it blocked BitTorrent users in early 2010. This would help network owners avoid getting into trouble both with anti-competitive laws as well as their customers who get angry when they discover that the company crossed the line in blocking content, discriminating between content, or charged extra for data from one site versus another.

ISPs have a right to recover costs from heavy bandwidth users

Internet Service Providers are businesses that make huge investments in building internet pipelines with high bandwidth capacities. This bandwidth is not public infrastructure. Other parties that take up a significant amount of the provided bandwidth are costing ISPs a significant amount of money by forcing them to expand their infrastructures. These parties are often reaping huge profits off of this for-profit bandwidth without paying anything in return to the ISPs. The ISPs have a right to seek return on their investment and demand that such bandwidth users pay a higher price for their heavy use.

Net neutrality forces network owners to operate in suboptimal ways

"Editorial: Net neutrality not so neutral." An Orange County Register. September 25th, 2009

“to bring about a utopian desire for virtually unlimited access over a limited resource, government would require broadband providers to operate in ways not necessarily in the best interest of the companies or their paying customers.”

Net neutrality will force ISPs to ask permission from FCC.

Net neutrality rules will force network owners to constantly ask whether certain things they are doing are within FCC net neutrality non-discrimination regulations. Blocking spam could be one example, with the result being that ISPs spend too much money on ensuring they are safely within regulations, when they could spend those resources in more productive ways.

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