net neutrality and the future of the internet

Net Neutrality and the Future of the InternetBrent Skorup, Research Fellow in the Technology Policy Program

Objectives

• Briefly explain how the Internet works.

• Show that “net neutrality” is a complex idea with no fixed definition.

• Explain common and future exceptions to “neutral” behavior.

• Describe what the FCC is pursuing regarding net neutrality.

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Why It’s Important

• New common carrier regulations?

• Continue to rely on antitrust and consumer protection?

• A Third Way compromise?

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Congressional Policy

In 1996, Congress amended the 1934 Communications Act:

It is the policy of the United States . . . to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.

47 U.S.C. § 230(b)mercatus.org

The Internet

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Broadband carries many services

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Why Doesn’t My Netflix Work?

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Broadband Constraints

• Broadband transmission is constrained and networks suffer from congestion at peak times.

• Constraints are geographical and technological.

• Overprovisioning is expensive. There are tradeoffs between building more capacity and network management.

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Broadband Congestion Responses

Neutral Response – “Best Efforts.” Drop packets randomly.

Non-neutral Response – “Quality of Service.” Make intelligent choices about which packets to drop based on type of application.

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What is Net Neutrality?

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What is Net Neutrality?

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What is Net Neutrality?

Wikipedia: “the principle that Internet service providers . . . should treat all data on the Internet equally . . . .”

GigaOm: “a long-time policy that prevents [ISPs] from giving special treatment to some websites at the expense of others.”

ACLU: “means applying well-established ‘common carrier rules’ to the Internet in order to preserve its freedom and openness.”

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What is Net Neutrality?

“Part of the problem is that net neutrality is like an inkblot into which people project their fears and hopes. There are at least seven different related but distinctive meanings in which the term is used.”

Eli Noam, Columbia University

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What is Net Neutrality?

• “Neutrality, as a concept, is finicky.” – Tim Wu, Columbia Law

• “The network is not neutral and never has been,” therefore, “[y]ou’ve got to discriminate between good blocking and bad blocking.” – David Clark, MIT

• “The net neutrality debate isn’t black and white. Participating in it fully means wading into those shades of gray.” – Nancy Scola, Washington Post tech journalist

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What is Net Neutrality?

On the “last-mile” network:

• Transparency about network management.

• No blocking the access of users to websites.

• No fast lanes and no different quality grades for service.

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Not Net Neutrality

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Also Not Net Neutrality

Professor Tim Wu at a House hearing on net neutrality said FCC oversight of the Internet should entail “not merely competition policy, but also media policy, social policy” and “oversight of the political process.”

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Net Neutrality Enters the Public Discourse

• Madison River (small ISP) blocks Vonage (2004)

• FCC adopts open Internet “principles” (2005)

• Comcast blocks BitTorrent (2007)– Initial denial

– Agreement between Comcast and BitTorrent

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FCC Tries to Enforce Rules

• Comcast v. FCC (2010)– FCC loses

• December 2010 rules

• Verizon v. FCC (2014)– FCC (mostly) loses

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Why Net Neutrality?

• ISPs will “censor” political speech ISP executives and advertisers dislike.

• “The Internet has always been neutral and ‘end-to-end.’”

• Small websites and startups cannot afford fast lanes.

• ISPs will charge anticompetitive “tolls” to competing services.

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Non-neutrality in Wireless

• “Voice Plus” – phone plans that provided limited, basic access to online content

• Zero rating – data that does not subtract from a monthly data limit– T-Mobile Music Freedom

– MetroPCS and YouTube

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Beneficial Blocking and Fast Lanes?

“Former Obama Tech Czar: ‘Fast Lanes’ Consistent with Net Neutrality”– May 2014 TIME story by Zeke J. Miller and

Haley Edwards about Aneesh Chopra, former Obama CTO

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Broadband carries many services

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Beneficial Blocking and Fast Lanes?

• Voice over Internet Protocol (VoIP)

• Video on Demand

• Gaming

• Telemedicine, teleconferencing, Skype video

• Whitelists and blacklistsmercatus.org

2013 Pew Study

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Net Neutrality at the FCC: Part III

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FCC Options: Title II

Reinterpret Title II of the 1934 Communications Act– Common carrier regulation

– Forbearance?

– Non-neutrality must be “just and reasonable” and in the public interest

– Burden is on ISPs

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Congressional Policy

It is the policy of the United States . . . to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.

47 U.S.C. § 230(b)

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FCC Options: Section 706

Use Section 706 authority to promote broadband deployment.– Can’t use common carrier rules

– Must allow ISPs to bargain with other firms

– “commercially unreasonable” non-neutrality prohibited

– Burden is on the FCC

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FCC Options: Defer

Defer to antitrust agencies

Defer to Congress– Request new legislation

– CommActUpdate?

– DACA working groups

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Takeaways

• Net Neutrality and network management is complex.

• Common carrier rules would limit beneficial non-neutral practices.

• Don’t limit consultation to lawyers.

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Mercatus Materials on Net Neutrality

• Daniel A. Lyons, “Innovations in Mobile Broadband

Pricing,” March 2014

• Brent Skorup, Public Interest Comment to the FCC,

September 2014

• Brent Skorup, “In Defense of Broadband Fast

Lanes,” re/code, May 2014

• Brent Skorup, “FCC Net Neutrality Regulation Could

Slow Our Future,” New York Times, May 2014mercatus.org

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