The Federal Communications Commission (FCC) killed net neutrality last month, reverting to a previously implemented system of regulations under which Internet service providers (ISPs) like AT&T, Comcast, and Verizon are not restricted from blocking or manipulating access to certain websites on the Internet.
ISPs act as a gateway for access to the Internet—the global network of information physically connected by telephone wires, fiber optic cables, and TV cables—from your phone or computer. They pull information from around the world stored on computer hardware known as servers and bring it to you and onto your screen through physical cables (wired connections to your house) or satellites (wireless GPS and Internet connections).
Net neutrality rules allowed for free and equal access to all pages of the Internet from any ISP. Prior to their repeal, ISPs could not deter users from going to certain websites. Now, however, ISPs can restrict access. They can charge websites for access to Internet fast lanes or block sites altogether. Instead of providing unlimited mobility to all facets of the internet, your ISP can now determine your access and influence your choices, according to the Huffington Post.
FCC Chairman Ajit Pai’s plan requires ISPs to notify customers about blocking, throttling, allowing paid prioritizations or prioritization of the ISP’s own content, controlling the traffic or congestion of the Internet, or limiting certain applications or devices. if ISPs fail to notify their customers of their actions, they could be sued but there is no formal legal prohibition of the behavior.
According to the Huffington Post, The head of the National Cable & Telecommunications Association, Michael Powell, believes that it would be unfavorable for ISPs to “discriminate against Internet traffic and create fast lanes,” even though it may be legal. Powell believes that competition in the telecommunications market will prevent ISPs from altering anything post-repeal.
Others, like Columbia Law School professor and former senior advisor to the Federal Trade Commission Tim Wu, have voiced little faith in these pledges by ISPs and in their enforceability, believing ISPs will find a way to raise prices and manipulate the Internet regardless. In an opinion article in the New York Times, he argued that strict adherence by ISPs to the promises they previously made against blocking and throttling is doubtful. “Lowering prices is just not something that cable or phone companies will do except under pressure,” Wu said. “Instead, the repeal of net neutrality will simply create ways for cable and phone companies to tax the web and increase your broadband bill.”
According to the Huffington Post, some argue that the real issue of concern is not whether the Internet is completely neutral but, more broadly, whether ISPs have gained too much market power because of their consolidation moves and vertical integration. Today, only a few ISPs control the Internet, arguably reducing competition for the best service offerings and pricing. In the last three years, Verizon has purchased AOL and Yahoo and owns content providers such as HuffPost, Yahoo News, Yahoo Sports, Engadget, and Tumblr. Comcast purchased NBCUniversal in 2011 and attempted to buy Time Warner Cable—the media property that owns HBO, CNN, and TBS—in 2014. AT&T is now looking to buy Time Warner Cable.
A New York Times article described how this consolidation of media companies signifies the newest agenda of media empires: obtaining entertainment producers. The ISPs that controlled the distribution of media now own its production as well. The Department of Justice challenged this control over a significant proportion of the value chain of the media industry, citing antitrust violations associated with AT&T’s attempted purchase of Time Warner. Both companies have agreed to extend the deadline for their merger to allow time for the lawsuit to proceed.
Alums in tech
Suzie Reider ’83
Ms. Reider has worked in media, publishing, and technology since about 1988. She was the chief marketing officer at YouTube and has been working for Google since YouTube was acquired by Google in 2006. Now she works for Waze, an app owned by Google.
There has been a lot of energy within Google in the last three or four years around net neutrality and the importance of an open, free, accessible internet. Google’s mission statement is to “organize the world’s information and make it universally accessible and useful.” The repeal of net neutrality goes exactly against what the company’s mission is. I can’t speak on behalf of Google, only on my own point of view, but that’s a pretty powerful way to think about it.
The repeal of net neutrality causes huge risk to the very essence of what the Internet is all about—free access to information, which is essential to the principles that govern the way the Internet has worked, business is done, and people have access to information.
Imagine if you had to buy the Google package, the Time Warner package, or the Comcast package, from your ISP, and you could only access the websites and the information on that package. Imagine if you couldn’t access anything on Amazon unless you bought its package. It’s not that different from what the cable companies have done, where you can’t watch the shows that are on HBO unless you buy HBO.
Think about the top 10 websites that you go to that you enjoy. What if Verizon said, “If you’re not a Verizon customer, and your ISP is not a Verizon ISP, you cannot access anything on AOL or anything on Yahoo?” All of a sudden that Fantasy Football league that you were in on Yahoo—you just can’t get to it.
Can you imagine if websites had to be paid for like that? If you had to select them and have them be part of your quote package?
Think about YouTube. YouTube is about the democratization of content and [about] a creator community where anyone can come in and be a creator. What if you couldn’t get to YouTube unless you had the internet package that had YouTube?
Net neutrality rules are still in place, so we don’t actually know what the internet providers will choose to do. But if you understand what the repeal means, you can easily build out what the uncomfortable scenarios would be.
John Toupin ’81 has worked in Silicon Valley in media and technology since graduating from Brown University. He was a founder and software developer of Infomediate, an early Internet startup. After over a decade of being the director of engineering at the Internet radio company Live365, he became the CTO of SongLily, a company that offers music licenses for app and game developers.
How involved do you think the government should be in regulating the internet?
I think the government should be regulating the Internet in the public good’s interest, not the interest of the biggest donation sources for the FCC commissioners. But it is a tough call. I have been in the entertainment business, in music rights, which are highly regulated by the government, and they have done a terrible job of it. Technology is out in front of the law by about 10 years, and the law is trying to catch up.
What do you think prompted the FCC’s repeal of net neutrality?
It was clearly some political donation that happened on the GOP side. The council swung from 3-2 one way to 2-3 the other way, and [the FCC] ignored 15 million emails. There were ISP contributions to the various key political figures involved in the decision—it’s how Washington works these days. No one in the industry wanted this but Comcast, AT&T, and whoever else is in that business.
How do you explain these giant monopolies, and why are they problematic?
The regular ISPs aren’t just pushing stuff through the pipes for $50 a month but are charging $250 a month for providing all the content as well. They are all after each other. It’s all giants fighting, and there’s no room for startups in any of it.
Policies that can broadly say, “You’re in the so-and-so space, and this is our rate for carrying your cargo on our pipes,” have a tendency to heavily favor the entrenched, existing businesses over any new startups. Facebook, which is a big, well-established company, may be happy to pay an extra billion dollars for access to AT&T’s customers, but if you’re a startup, you can’t afford to pay that growing rate. Tilt the tables in favor of the establishment (such as Facebook or Twitter for social media sites), and you may find they don’t object, ironically, because it shuts out the little guys—stuff that is new or cooler, which is the threat to their existence.
You can end up with a non-neutral entity that really controls the pipeline. In the future, if you try to get to “att.com” on a Comcast connection, you may not be able to get there. You could end up not only with things being slowed down, but also possibly filtered out completely. It would be a disaster.
Why are so many ISPs going beyond providing service to producing content now as well?
In general, the capital investment required to connect people to the internet is so big that it naturally drives itself to the monopolies. Companies like Comcast now own wires, NBC, and cable companies that produce content. They are in the position to shut out their direct competitors in favor of their own companies—Netflix for NBC, for example. They may or may not know how to do that yet, but the moment they do, they’re going to do it. They have responsibility to their shareholders to do that. That’s the natural way they will be driven.
Netflix was in the DVD rental business, then they got into streaming, and now they’re producing their own content. Why is that? When you stream stuff, you have to get the studio’s permission to stream them. Once you get the permission, then they start jerking [Netflix] around on the prices of the rights and the availability of the show becomes tough. My interpretation is that Netflix realized, “Oh my god, the studios are getting into the distribution game directly (ABC, Disney, Comcast). At some point, NBC’s going to cut us out of the middle.” So, to survive in this world, Netflix decided they needed content that you couldn’t get anywhere else.
How do you imagine the future of the Internet with the repeal of net neutrality?
I think you will end up with one, if you’re lucky two, and if you’re very lucky three, big, giant conglomerates. I have a friend that is an out-of-the-box thinker, and his proposal was that cities and towns seize Comcast cables by eminent domain [governmental power to take private property for public use], taking over a community’s last mile; then you could choose from dozens of carriers that carry your bits.
I think you as a citizen and a consumer don’t want the government to own [the Internet]. You do want the government to ensure fair and equitable practices to protect the interest of its citizenry. Compare to airlines, utilities, or other highly regulated industries.