Net Neutrality: Treating the Internet Like a Utility (Updated)
According to a story on PJM by Charlie Martin, in 2004 Comcast and some of the other big providers started looking at what data was being sent, and decided to start throttling down how much data of certain types -- most notably streaming audio and video -- people could receive. This tended to irritate people who watch their favorite shows on Hulu or movies on Netflix (I happen to be one of the people who prefers his shows this way). Thus, the push for net neutrality began.
On its face, the idea of net neutrality seems like a good one: internet service providers, such as Comcast, should move all data equally regardless of its source or type. ISPs aren't allowed to look at what's in a data packet; they just have to move it to whoever requested it. This would also prevent networks from blocking voice-over IP services like Skype, or favoring their own data over that from rival networks.
So far, so good -- and if this was what was actually going to happen, it would be fine.
The problem commences with who gets to regulate the Internet. The usual suspects in Washington, from Henry Waxman (D-CA) to Federal Communications Commission Chair Julius Genachowski, are pushing for rules which would take things in a radically different direction. Recall the "Fairness Doctrine" in radio was an FCC regulation -- not a law. What's currently being pushed as "net neutrality" is in many ways simply a fairness doctrine for the Internet.
As Charlie Martin points out:
The push for net neutrality, however, was quickly picked up by other people for other political purposes, starting with the idea that “net neutrality” meant that everyone ought to have equal access to Internet service, whether they live in the borough of Manhattan, or Manhattan, Kansas, or in a cabin twelve miles by road from the nearest human habitation. This quickly picked up other ideas: that “net neutrality” meant different ethnic groups have equal access -- which would mean the government looking not just at the content of the messages, but the race of the person on the wire; or that different viewpoints ought to have equal access to the Internet -- so, potentially, Fox News would be limited based on how much bandwidth the Huffington Post consumed; and even that “hate speech” and “lies” could be regulated.
This is what we might call net neutrality of the second kind: not content neutral, but instead, content “fairness.”
No one entity has rule-making authority for the Internet. The FCC can not and does not regulate its content.
And therein lies the rub: the FCC, like most bureaucratic organizations, and Genachowski, like most bureaucrats, tend toward empire building. With a regulatory agency like the FCC, this means that when they see something which currently is unregulated and for which they could make a reasonable argument that it falls in their bailiwick, they are going to try to get control of it. When that agency is also very much a political agency, the implications become more troubling still -- regardless of which party is in power.
There is always the danger, as Charlie points out, that the FCC and its political appointee head could decide that Fox News -- or the Huffington Post, for that matter -- constitutes hate speech. They could use the rules as a club to limit access to those sites, thereby limiting the openness that Genachowski himself said in a recent speech is the great strength of the net.
In that same speech, and within some of the proposed rules which have from time to time been circulated, Genachowski has also suggested usage-based fee structures. Currently, most people pay a flat rate to their providers for access -- much like you do for your cable television -- and get all the data they care to download. Under a usage-based structure, this would end up being more like a cell phone plan where you get so many minutes each month and then must pay extra for any overages. The Internet becomes less and less a convenience, and more of a utility like your electricity or natural gas.
Many of us simply cannot do without Internet access. For instance, Charlie and I are collaborating on these stories on net neutrality. Charlie is based in Colorado, and I am in Kansas. PJM is based in California, but some of our editors are in New York and Washington, D.C. Without the Internet, Charlie and I would be unable to do our jobs. Under a usage-based fee structure, I might only be able to afford Internet access part of the month, and would be unable to do my job. My ISP might provide a flat-rate service, but if they can make more off usage-based, that flat-rate might be prohibitively expensive.
I'm not at all certain how openness or fairness are served here.
While it is apparent some sort of regulation is needed, what form it should take is less so. It is also less than apparent where the FCC derives authority to make this particular power grab, as Congress to date has not authorized them to regulate the Internet.
Moreover, the Internet is truly international in scope. Regulations which, whatever the stated intent, tend to limit growth and stifle competition within this particular sector will put the United States at an economic disadvantage globally at a time when we can ill afford any more disadvantages.
I was perhaps unclear about a couple of things in my post and wanted to clear them up.
ISPs should be free to use the pricing structure which best suits their business model. That, however, is not what the FCC is talking about doing here. What the FCC is discussing is protectionism. Sites like Netflix and Hulu are hurting the cable industry. The FCC is moving forward with regulations which would tend to hurt consumers and have the possibility of putting the burgeoning Internet video industry out of business. As the Washington Post points out:
The FCC will vote Dec. 21 on the proposal, which could could tilt fortunes toward cable and telecom companies battling to keep users from abandoning paid television services for new Internet options such as Apple TV and Hulu.com, analysts say. Those providers are struggling to manage overburdened networks that are seeing a surge in streaming video traffic from sites such as Netflix, which alone occupies 20 percent of all peak broadband traffic in the United States.
This is a power grab by the FCC, pure and simple -- despite the fact they have no statutory authority to regulate the Internet, Genachowski plans to simply lay down rules which Congress has not voted on and which may or may not have anything to do with reality. The law of unintended consequences applies.
Moreover, the rules the FCC is promulgating have the potential to kill a new industry as well as stifle free speech. There is nothing "neutral" in anything the FCC is proposing.