We’re About to Lose Net Neutrality

Congress has already authorized it, the FCC is just trying to have its cake and eat it too. The FCC decides whether to classify last mile internet service as a "telecommunications service" that they have significant statutory authority over or an "information service" that they don't, and they picked the second one but are trying to impose regulations anyway, which is why they keep getting slapped down.

Choosing that classification was so controversial at the time that they got sued over it, and the Supreme Court ultimately said that the FCC was allowed to make that classification, not that they were required to. Now that everything that was once classified as a "telecommunications service" is being offered instead over the top using "internet service" it seems reasonable for them to revisit the classification.

"That'll be $60 for the gas. Oh wait -- where are you going with that gas? Boston? No problem. That's $40 extra if you want to go more than 25 miles an hour."

We disagree on what Congress gave the FCC authority to do. The 1996 Telecom Act clearly classified DSL and dial-up as something called a "telecommunications service" which was subject to a host of rules including nondiscrimination rules. On the other hand, things like Yahoo.com would be "information services," not subject to all those rules.

The FCC, adhering to a deregulatory philosophy, decided not to regulate cable modem service by claiming it was an "information service" through some pretty silly technical analysis. After this decision, the FCC decided that DSL and wireless Internet were also "information services" not automatically subject to the rules set out by Congress. (This is sort of like a financial regulator deciding that mortgage-backed securities are not insurance, even though they look like insurance, just to make sure all the laws applicable to insurance don't apply.)

But... the FCC claimed it could impose net neutrality rules on ISPs even though they were "information services" like Yahoo (or Hacker New or Facebook). A court struck down that attempt and the FCC is on try number 2, and before the same court.

The FCC can properly classify ISP service as a "telecommunications service."

The argument about Congress failing to pass a new statute authorizing net neutrality in 2006 is flawed because courts draw no inference from failed legislation. That's well-known statutory interpretation. Any member could introduce any law and it likely won't get passed; that 1 member's view doesn't have a legal impact.

Finally, the argument that Ed Markey can act whenever there's a NN violation misses the point that the FCC is the enforcement agency that should act. By adopting a law, they are simply setting up that enforcement process for people to file complaints, and the FCC can act. Markey on his own can't enforce anything; he can call hearings, but that's not enforcing an order.

(Also, the commenter is Declan McCulloch of CNET, or his biggest fan, since he links to Declan's articles and is named Declan... I'm Marvin, the author of the Wired.com opinion article. Declan is also quite a "smart fellow" and we get along swell, even if we disagree sometimes and are on opposite coasts.)

In situations like this, one role of government is to regulate these natural monopolies to protect citizens.

One such regulation, for instance, is that the power company cannot shut off your power in the middle of winter in Minnesota without fulfilling some pretty stringent criteria.

edit: typos.

I'm very against government regulation, but something it's necessary.

Setting up telecommunications networks is expensive and legally complex, and the resources involved are extremely limited. The likelihood of a functioning free market in this space is essentially nil. In the absence of a functioning free market, the government is the only entity with the authority to apply regulations for the benefit of the citizenry.

I argue that most people won't care about their "choice" (air quotes, because most people can't pick from more than 2 ISPs) of ISP until it's too late.

Already you have ISPs throttling access to streaming video sites (netflix, youtube, twitch) with little to no REAL blowback.

With the barriers to entry as high as they are, there's no way for a competitor to succeed in the market solely on the basis of being net-neutral.

Google Fiber, in markets where it's available, has led to competitors reducing prices and offering better service. However, there's no word of change regarding net neutrality.

Not sure how i'm getting the choice to use a "net neutrality compliant" ISP if comcast decides i can't reach site Z or Y.

If you leave it up to the prisoners, they will both rat each other out resulting in the worst possible outcome (https://en.wikipedia.org/wiki/Prisoner%27s_dilemma). Assuming that consumers will decide what is best for the whole of society is simply incorrect. "Internet innovation" is very much one of those big picture goals where I think some community planning (e.g. government intervention) would help the outcome.

(Also, Google is probably one of the worst examples imaginable for arguing the market should make such decisions.)

Because it's not a technology issue, it's a business fairness issue. You know, the same way we let the government handle contracts.

>Seriously, I can't get over the dissonance here. If it's such a shitty idea, let consumers decide.

One's the genie is in the corporate box, there will be no turning back. The consumer cannot decide if he is not even provided with an alternative -- or if any alternative is more expensive. Like you couldn't decide about carrier-locked phones all those years.

You either push for fairness to be regulated in law, or let the 4-5 top players divide the pie as they like.

>Google Fiber et al will just eat the major telecoms' lunch sooner or later anyway.

And who told you that Google WONT take advantage of crashing net neutrality itself?

I think the key is the false assumption that this is how the origins and advancement of political authority works. This net neutrality issue is much easier to explain with a model of political authority that treats it as something the ruling class takes by force.

Social contract theory was just the best thing Enlightenment thinkers could come up with to settle the cognitive dissonance they experienced upon realizing that the existence of governments was a plain violation of their new ideas about natural rights.

Yes the free market should decide, but we just don't have one. Net neutrality is an imperfect remedy at best, but letting the telcos run wild with artificial privilege isn't the answer either.

Also, it's true, as others have noted, that competition among ISPs won't be enough to ensure net neutrality because there can't be enough competition (either through regulatory capture or natural monopoly economics).

However, even if there were competition, competing ISPs have the economic incentive to discriminate. The economic modeling is available in the work of Barbara van Schewick (she wrote an amazing, and dense, book on net neutrality). So competition would not necessarily solve the issue, as it does not solve things like car safety (or safe housing). I'm a huge fan of free markets, but there are market failures requiring some government intervention in the form of contract law, property law and its exemptions, and regulation in specific situations.

For that matter, read about the origins of antitrust law. Monopolies and oligopolies neutralize the market's usual power to straighten things out. Giant companies aren't generally interested in innovation; they're interested in dominance. (See The Innovator's Dilemma for more on the economics of why.)

If it makes you feel any better, it's not like the FCC's going to go around kicking down telco doors and inspecting routers. Proof of net neutrality failures will come from us, the nerds. As individuals, measuring our own networks, and as the techies at innovative companies, going public when telcos try to discriminate against them.

Because we have no free market in the ISP business. It's close to a sick monopoly, or to cartels which agree on fixing high prices. If the government won't reign it, who will?

This is one of the two key dynamics in the tech industry. The other is distributors versus content companies. When Amazon streams you a movie made by NBC/Universal over pipes built by Verizon, Amazon is positioned antagonistically to these other companies in wanting to extract the largest share of the total you're willing to pay for the whole package. Net neutrality helps them do this, and so does weaker copyright protections, among other things.

IMO, the US government correctly concluded that the Bell Monopoly was initially in the best interest of the nation, as it accelerated universal phone service. Later, with a lot of prodding, they reversed that policy and unleashed the telecom competition that helped bring us the last 30 years of innovation.

The problem is that the telephone companies are essentially rebuilding the old AT&T through merger, and wants to pillage the consumers of telecom services once again. They are doing this by declaring that the FCC can only regulate voice, defined as legacy TDM/POTS lines and related technology. Simultaneously, they are moving in state legislatures and congress to eliminate the requirement to provide universal POTS service.

I've worked in a large enterprise where the network teams became too politically powerful (essentially becoming a troll under the bridge instead of a service provider) and basically put the organization out of business by making it either impossible or too expensive to get anything done. Empowering phone companies without a short, tight leash would be doing the same thing to our nation.

Powerful network owners are the most dangerous people in technology.

It's like somebody being wrong on the internet, only you can feel you did something about it. Like empowered somebody who doesn't know how to fix it and has abysmal track record in fixing hundreds of other things, to do whatever it takes to fix it. That can't ever go wrong, can it?

And we can be sure we can totally trust them with this power and they won't think about usurping this and taking it way beyond original purpose and trying to control everything everywhere. It's not like we're living through the wave of revelations showing how far the government can go subverting privacy, undermining security and expanding its powers in very short time. It's not like we have an agency that has an official logo of globe-encompassing octopus on top of the slogan "Nothing is beyond our reach". Calling for more control of the internet for those people would be indeed a bit myopic. But that's not what is going on here, right?

I would argue that it's not even clear how the market would respond to this, and yet the pro-neutrality camp paint a picture of corporate apocalypse. This seems reasonable to me:

Neutrality rules are repealed. Some ISPs begin discriminating against certain publishers that do not pay up, but can use the payments to subsidize reductions in cost of consumer access. The "multitudes" of neutrality proponents begin demanding undiscriminated connections, calling for boycotts, switching to providers that offer such connections. Neutrality activists develop tools to compare and publicize connection rates to different publishers through different ISPs. Small-time providers form associations to raise awareness of the issue as well. Ethical marketing comes into play as some ISPs and some big publishers reject connection rate differentiation. Some ISPs that also own publishing properties are caught or implied to be preferring their own content over competitors, drawing political attention. In some areas, net neutrality laws (not just "rules") are passed, which is a draw for startups. Meanwhile, many who had no home connectivity in the past are now able to afford the "subsidized/sponsored" service level.

What irks me about the middle-class idealogues raising a fuss about this now is that they arbitrarily draw the line of equality around big corporations, with little attention given to the fact that service is tiered at all. If it doesn't make sense for small publishers to be penalized for not ponying up, it should make even less sense for certain individuals in society to be penalized for not being able to afford anything more than dial-up or basic DSL. Going further, it should be more appalling that the most financially under-resourced can't even afford the most basic service level, and live without any internet participation. Instead, they prefer corporations to carry the costs of keeping the level field artificially level, while doing nothing to help those below them have the same level of access they do.

Indeed, it will be unfortunate for the United States when internet services are akin to healthcare and prescription drugs.

Who do you think is footing the bill for those Facebook-only plans? Covering the costs of all internet use sounds like an unsustainable business strategy.

Are 'social network upstarts' losing out on users in the USA because people don't want (or can't afford) to pay for a data plan? How is this any different?

how so?

I'm not really okay with the idea of regulating net neutrality from an ideological perspective, but from a practical one, we're kind of stuck with the market we have - effective regional monopolies are granted to a very small number of companies, and there is very little space for counterbalance from competition (which is why Google Fiber is such a Huge Frickin' Deal!). Left unfettered, the end result would likely be that the AT&Ts and Comcasts end up leeching their customers dry on both ends of the pipe, because those customers don't have any alternative.

In my ideal world, there would be no need to regulate net neutrality because I could penalize bad companies by refusing to do business with them, and getting my friends and family to do the same, but we don't have those options - choosing an ISP is a lot like choosing which knee you want to be hit in. In a market where companies have been granted regulatory monopolies, the invisible hand is rather ineffective.

I could understand opposition to net neutrality if there were competition in the ISP market. However, I have no choice but to use Comcast, so the idea that they can decide what sites I visit and how fast they are is very scary.

How net neutrality is put in practice is entirely a different matter. And for some reason you think if it is the government doing the enforcement, that it is somehow against freedom? I completely disagree. Government not allowing another private entity to abuse me is fine with me.

In some countries net neutrality is the law already by the way.

Second, ISPs could just impose a page-load tax on data where it couldn't verify that the source was a one not subject to the tax, instead of imposing it on those that they could verify were subject.