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Net Neutrality Explained – What It Is and Why Internet Regulation Matters

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A few months ago, two salespeople showed up at my door trying to persuade me to switch my Internet service to Verizon. When I declined, explaining that I didn’t want to support Verizon because of its position on net neutrality, their response was, “What’s that?”

This reaction is fairly common. Even though net neutrality – also known as the open Internet – has been in the news a lot lately, most Americans still don’t know what it is. According to CNBC, a poll taken in November 2017, shortly after the FCC announced its plans to scrap net neutrality rules, found that only 46% of Americans said they had heard about the issue recently. By contrast, over two-thirds had heard about tax reform and charges of sexual misconduct by politicians.

That’s unfortunate, because net neutrality – or a lack of it – has a much bigger impact on your life than a politician’s sexual misdeeds. Changes to open Internet rules could affect not just what you pay for Internet service but also what kind of content you’re able to find online. Here’s what you need to know about what net neutrality really means and how the new rules could change your life.

What Net Neutrality Means

We talk about “the Internet” as if it were one big system, but it’s actually two distinct things. What you see when you surf the Web is the content side of the Internet. Every site that pops up on your screen – whether it’s supplying news, stock quotes, cooking blogs, or cat videos – is an example of Internet content.

The part of the Internet that you can’t see is the infrastructure side – the vast network of copper wires, fiber-optic cables, cell towers, and satellites that transfers all that content from the sites where it was created to your computer. Most people these days tap into this network with broadband Internet service. In America, that service is supplied by just a few big Internet service providers (ISPs): AT&T, CenturyLink, Charter, Comcast, Cox, and Verizon.

The problem is that the ISPs that control your access to the Internet can also see what you do online: posting on social media, streaming videos, playing online computer games, and so on. That means that they can program their servers to slow down or block your access to certain sites. They can stifle your access to sites they don’t like and create a special “fast lane” for sites they do like – or, more likely, sites that pay them extra for this speedy access.

That’s where net neutrality comes in. The basic idea behind net neutrality is that ISPs shouldn’t be allowed to control what you do online by making certain types of content faster or cheaper to view than others. They can charge you more for a faster Internet connection, but what you do with that connection is up to you.

Over the last couple of years, creative thinkers have come up with several different analogies to illustrate the importance of the open Internet. For instance, the American Civil Liberties Union (ACLU) website asks you to imagine if your cell phone provider could cut off your call every time you tried to order a pizza from Domino’s because it was getting a kickback from Pizza Hut. Continuing the fast-food theme, Burger King created a video – shown here on Adweek – in which one of its restaurants deliberately slowed down access to Whopper sandwiches to customers who had not paid extra for faster service. And a story on NextWeb explains how net neutrality activist Rob Bliss used his bike to control one lane of traffic on a Washington street, then offered commuters the opportunity to pay $5 for access to the new “fast lane.”

Net Neutrality MeansChanges in Net Neutrality Law

The risk that ISPs will tinker with your access to content isn’t just a theoretical one. It happened in 2014, when Comcast slowed down access to Netflix streams until the company made a deal that “established a more direct connection” with Comcast, according to Consumerist. A similar problem cropped up in 2011, when three major wireless providers – Verizon, AT&T, and T-Mobile – blocked access to Google Wallet on their phones in order to promote their own electronic payment systems, as reported at CNN.

In 2015, the Federal Communications Commission (FCC) passed new rules regulating what ISPs can and can’t do with your Internet content. However, the debate over net neutrality didn’t end there. ISPs protested the move, and in 2017, they got their way when a new FCC chairman rolled back the 2015 rules. This change is the reason net neutrality is now making headlines once again.

The 2015 Open Internet Rule

The FCC’s Open Internet Rule, passed in February 2015, was a vast document more than 400 pages long. However, it basically boiled down to three main points:

  • No Blocking. Under the new rules, ISPs were not allowed to block access to any site, application, service, or device. The only exceptions were for content that was illegal or harmful, such as child pornography.
  • No Throttling. ISPs were also not allowed to “throttle” specific services or applications – that is, slow down access to them. Specifically, they couldn’t give faster or slower access to certain kinds of Internet traffic based on their content, who was using them, or whether they competed in some way with the ISP’s own services. For example, Comcast could not deliberately throttle access to the Verizon website to keep people from switching services.
  • No Paid Prioritization. Lastly, the ISPs were barred from charging content providers a fee to give users faster or more reliable access to their sites. In other words, they were not allowed to create “fast lanes” on the Internet. For instance, an ISP could not make Hulu’s video streams faster than video streams from Netflix because Netflix had paid for the privilege.

In order to do all this, the FCC had to classify broadband Internet service as a “public utility,” in the same category as a telephone or electric service. Specifically, it declared that broadband service would be regulated under Title II of the 1934 Communications Act, making it subject to the same strict rules as local telephone networks.

The major ISPs were strongly opposed to this change. They claimed the added oversight required by the new rules would give them less incentive to upgrade their networks, resulting in slower Internet service for everyone. However, those same ISPs went on to tell their investors that they had no plans to cut investment in infrastructure due to the new rules. A 2017 analysis by Business Insider found that while some ISPs invested less in their networks in the wake of the 2015 rules, others either made no change or actually increased their investment.

The 2017 Repeal

In a November 2017 statement, the new FCC chairman Ajit Pai announced his intention to “restore Internet freedom” by repealing the 2015 rules, which he called “heavy-handed, utility-style regulations.” Pai argued that the new rules had “depressed investment in building and expanding broadband networks and deterred innovation.”

ISPs were strongly in favor of this move. They claimed the 2015 rules were stifling innovation, causing Internet service in the U.S. to lag behind other countries. They also argued that open Internet rules weren’t needed, since they had all voluntarily committed not to block or throttle Internet access to any site. In May 2017, Consumerist reports, 21 ISPs took out a full-page ad declaring their commitment to “an open Internet” – but none of them would back up this pledge in writing, and none of them would make any promises not to prioritize certain content for money.

The tech industry, by contrast, was almost universally opposed to the repeal. More than 200 leading Internet pioneers and engineers submitted a 43-page joint comment to the FCC (posted in full on Tumblr) claiming that the repeal posed a threat to the very nature of the Internet. They argued that the new rules would force developers to “seek approval from or pay fees to ISPs before deploying their latest groundbreaking technology.” New startups would be unable to compete, and innovation would wither.

As for regular Internet users, most of them weren’t even aware of the proposed change. However, those who knew about it were generally opposed to it. The FCC received millions of comments opposing the repeal; CNET reported on protests of the new rules outside Verizon stores; a University of Maryland poll showed 83% of all Americans, once they had net neutrality explained to them, favored keeping the Open Internet Rule. But despite the outcry, the FCC voted in December to repeal it.

Net Neutrality LawHow the New Net Neutrality Rules Could Affect You

The new net neutrality rules were entered in the Federal Register on February 22, 2018, and will become law beginning April 23, 2018. So far, it’s likely you haven’t seen any change in how your Internet works. In the long term, though, the change could affect what you pay for Internet service, what you pay for online content, and even what kind of content it’s possible to view online.

1. Internet Costs

Many technology experts believe that under the new rules, ISPs will change the way they charge for Internet service. Two experts interviewed by U.S. News are predicting a shift to a tiered system, with bronze-, silver-, and gold-level service packages. Access to the most popular sites will be reserved for those who pay extra for top-tier service.

Alternatively, paying for Internet service could become like buying an airline ticket: instead of one all-inclusive price, you’ll have to pay a base price plus a bunch of additional fees for “extras.” Just as airlines now charge extra for checked bags, priority boarding, and snacks, ISPs could one day charge extra for access to streaming video or social media.

For some people, this could be a good thing. For instance, if you only use the Internet for e-mail and occasional Web browsing, you could pay less for a bare-bones Internet package than you do for the most basic service now. However, if you’re like the average Internet user, you’ll probably have to shell out more for a midrange or high-level package.

Chairman Pai has suggested that in the long run, less restrictive Internet rules will lead to cheaper, better Internet for everyone. The idea is that without burdensome regulations in their way, ISPs will put more money into expanding their networks. As they spread out into each other’s territory, the increased competition will drive prices down.

However, there’s no guarantee that this will actually happen. As Business Insider points out, most ISPs already have plenty of capital and have shown little interest in using it to expand their service into more areas. And new ISPs, such as Google Fiber, have had little success competing with the established companies on their own turf – even with a parent company’s deep pockets to back them up.

2. Content Costs

Another possibility is that, instead of charging consumers more directly, ISPs will charge content providers fees for faster access to their sites. For instance, streaming media services like Netflix and Hulu would have to pay extra to avoid having their streams slowed down to a trickle. These sites, in turn, would probably pass the added costs on to users by raising their subscription prices. Alternatively, they could cover the added cost by selling more ads, so your “Stranger Things” binge session would be interrupted twice as often.

On the other hand, ISPs could simply refuse to give you access to some content at all. Instead of charging both Hulu and Netflix a fee for faster access, they could promise exclusive access to whichever service is willing to pay them more money. So, for instance, Comcast users could have Netflix access included in their Internet service, while only Verizon users are able to access Hulu.

If that happens, shopping for Internet service would get a lot more complicated. In addition to comparing ISPs based on their price and speed, you’d have to consider which one gives you access to everything you want to view online – much like choosing a cable TV package.

Of course, that’s assuming you have any choice at all about which ISP you use. According to the latest FCC report about Internet access in America, about one in five Americans have only one or two providers to choose from for broadband service. For really high-speed service – 25 Mbps or more – most Americans have no more than one provider available, and over 20% have none at all. So, if you’re one of the many Americans with only one high-speed service available to you, that service could end up making your decision for you about what shows you can watch, what podcasts you can listen to, and what other online services you can use.

3. Online Information

Chances are, some websites and online applications won’t be able to afford access to the new Internet “fast lane.” As a result, their content will become slower to access and harder to use. The difficulty of dealing with these slow-loading sites will likely lead many consumers to give up on them altogether. This, in turn, could make it harder to find useful information when you’re trying to compare products or services online.

For instance, suppose you’re a Comcast user, and you’re thinking about switching ISPs. When you try to search online for information about other ISPs in your area, Comcast could block or slow down access to their sites so you won’t be able to get a quote. If you search for reviews from users, Comcast could block any site that has negative things to say about its own service, making you think it’s the best of the bunch.

This potential problem isn’t limited to shopping for Internet service. Comcast and other ISPs could make deals with other companies, such as stores and banks, offering to prioritize their content over that of their competitors. So, if you’re searching for the best deal on a cash-back credit card, your ISP could make sure the site for its “partner” card is the fastest and easiest to load, encouraging you to choose this card instead of checking out all the options.

An even bigger problem is all the sites that you’ll never get a chance to see at all. Most small startup companies won’t be able to afford the fees for faster access, so they’ll have a much harder time competing with big, established companies. Up until now, the Internet has been a fertile breeding ground for new companies to shake up the marketplace, such as Facebook and Netflix. With the new rules, many of those companies will never get off the ground, and finding great deals online will become much harder.

Net Neutrality Online InformationThe Future of Net Neutrality

Although the FCC has moved to scrap the old open Internet rules, the fight over net neutrality isn’t over. Supporters of net neutrality are still fighting to preserve it at all levels of government – federal, state, and local.

1. In Congress

Within weeks of the FCC announcing its repeal plan, Senator Ed Markey stated that he would attempt to block it using a tool called the Congressional Review Act (CRA). Under this law, part of Newt Gingrich’s 1996 Contract with America, Congress can review and potentially overrule any federal regulation passed by any government agency.

Under the CRA, Congress can vote to block any new regulation within 60 legislative days – that is, 60 days when Congress is in session – after it’s issued. If the majority of members in both houses of Congress vote against the new rule, a “resolution of disapproval” goes to the President’s desk. If the President signs this resolution, the new rule is blocked. Otherwise, it takes a two-thirds majority in both houses to overrule and stop the new regulation from going into effect.

By the end of February 2018, 50 Senators – mostly Democrats – had declared they would vote to block the net neutrality repeal. That left supporters in need of only one more vote to pass the resolution. However, in the House, the CRA resolution (introduced by Representative Mike Doyle) had only 152 supporters out of 435 members. Thus, there’s little chance this resolution will ever end up on President Trump’s desk – and if it does, he will almost certainly veto it.

Meanwhile, Republicans in Congress have proposed their own new law on net neutrality. This bill, the Open Internet Preservation Act, would prohibit ISPs from blocking or throttling access to any site. However, it would still allow them to create paid fast lanes, and it would ban state governments from passing any laws of their own to stop them. It would also bar the FCC from ever again regulating Internet service as a public utility.

2. At the State Level

The fight for net neutrality is also continuing at the state level. On January 16, 2018, attorneys general from 22 states filed a lawsuit challenging the FCC’s repeal of the Open Internet Rule. The filing, printed in full on the New York State website, challenges the law on the grounds that it violates several federal laws, including the Communications Act of 1934 and even the U.S. Constitution. It also charges that the FCC did not follow the appropriate federal rules for passing new regulations.

State legislators are taking action as well. In March of 2018, the state of Washington passed a law that prohibits ISPs from blocking or throttling access to any lawful site or online service, or engaging in paid prioritization. At that time, 16 more states were considering similar bills, and six others were reported to be in the process of introducing them, according to Fight for the Future.

However, even if all these bills pass and are signed into law, they could still face challenges in the courts. The FCC’s 2017 ruling officially bars state and city governments from passing their own net neutrality laws. The FCC argues that Internet service is a form of interstate commerce, and is therefore under the control of the federal government only.

On the other hand, state lawmakers argue that they have the right to decide which ISPs do business in their states. They also claim that only Congress, not the FCC, has the right to block state laws. Courts have supported this view in the past; Reuters reports that in 2016, a federal court blocked the FCC’s attempt to prohibit states from setting limits on municipal broadband networks.

State legislators are also taking action to ban ISPs that block or throttle content from doing business with state agencies. According to Fight for the Future, New York, Rhode Island, and North Carolina have either introduced or are considering such bills. Governors in New York, Montana, New Jersey, and Vermont have issued executive orders to do the same thing.

3. At the Local Level

Some local governments have decided that the best way to protect net neutrality – and provide better service to their residents – is to get into the Internet business themselves. According to the Institute for Local Self-Reliance (ILSR), there are now more than 750 communities across the U.S. that have some type of public broadband network. These range from large municipal networks that serve entire cities to small-scale networks connecting a few local businesses.

One of the most successful municipal broadband networks is EPB, which provides fiber-optic service at gigabit speed to hundreds of thousands of users in Chattanooga, Tennessee. According to Business Insider, having this new competitor in town forced other ISPs in Chattanooga, including Comcast and AT&T, to improve their service. Eventually, Comcast even one-upped EPB with a plan that provided service at 2 Gbps.

Naturally, the major ISPs aren’t happy about this competition. They’ve fought back by lobbying hard against municipal broadband, and in some cases, they’ve succeeded in blocking it at the state level. The ILSR reports that 19 states now have some form of preemption law that either completely blocks towns from creating new municipal networks or makes it much more difficult to set them up.

Final Word

If you’re concerned about net neutrality, there are several things you can do to make your feelings known. First, you can call your members of Congress and ask them to support – or, if you take the ISPs’ side in the issue, to oppose – the CRA resolution on the FCC’s recent repeal decision. Although this vote is largely symbolic, contacting legislators about the issue will make them more aware of how many Americans are concerned about net neutrality. In the long run, it could encourage them to push for new laws to protect the open Internet.

You can also contact your state legislators and urge them to support laws protecting net neutrality in your state. If your state is one of the 19 that has a preemption law banning municipal broadband, you can urge them to repeal it.

And finally, at the local level, you can work to stir up interest in starting a new municipal broadband network for your town. If it succeeds, you could end up with not just a more open Internet, but also faster service at a more reasonable price than you’re likely to get from the big ISPs.

Now that you know the facts about net neutrality, how do you feel about it? Do you support or oppose the FCC’s decision to repeal the Open Internet Rule?

Amy Livingston
Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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