Reference no: EM131397985

The Battle over Net Neutrality

What kind of Internet user are you? Do you primarily use the Net to do a little email and online banking? Or are you online all day, watching YouTube videos, downloading music files, or playing online games? Do you use your iPhone to stream TV shows and movies on a regular basis? If you're a power Internet or smartphone user, you are consuming a great deal of bandwidth. Could hundreds of millions of people like you start to slow the Internet down? Video streaming on Netflix has accounted for 32 percent of all bandwidth use in the United States and Google's YouTube for 19 percent of web traffic at peak hours. If user demand overwhelms network capacity, the Internet might not come to a screeching halt, but users could face sluggish download speeds and video transmission. Heavy use of iPhones in urban areas such as New York and San Francisco has degraded service on the AT&T wireless network. AT&T had reported that 3 percent of its subscriber base accounted for 40 percent of its data traffic. Internet service providers (ISPs) assert that network congestion is a serious problem and that expanding their networks would require passing on burdensome costs to consumers. These companies believe differential pricing methods, which include data caps and metered use-charging based on the amount of bandwidth consumed-are the fairest way to finance necessary investments in their network infrastructures. However, metering Internet use is not widely accepted because of an ongoing debate about net neutrality. Net neutrality is the idea that Internet service providers must allow customers equal access to content and applications, regardless of the source or nature of the content. Presently, the Internet is neutral; all Internet traffic is treated equally on a first-come, first-served basis by Internet backbone owners. However, this arrangement prevents telecommunications and cable companies from charging differentiated prices based on the amount of bandwidth consumed by the content being delivered over the Internet. The strange alliance of net neutrality advocates includes MoveOn.org; the Electronic Frontier Foundation, the Christian Coalition; the American Library Association; data-intensive web businesses such as Netflix, Amazon, and Google; major consumer groups; and a host of bloggers and small businesses. Net neutrality advocates argue that differentiated pricing would impose heavy costs on heavy bandwidth users such as YouTube, Skype, and other innovative services, preventing highbandwidth startup companies from gaining traction. Net neutrality supporters also argue that without net neutrality, ISPs that are also cable companies, such as Comcast, might block online streaming video from Netflix or Hulu to force customers to use the cable company's on-demand movie rental services. Network owners believe regulation to enforce net neutrality will impede U.S. competitiveness by discouraging capital expenditure for new networks and curbing their networks' ability to cope with the exploding demand for Internet and wireless traffic. U.S. Internet service lags behind many other nations in overall speed, cost, and quality of service, adding credibility to this argument. Moreover, with enough options for Internet access, dissatisfied consumers could simply switch to providers who enforce net neutrality and allow unlimited Internet use. On January 14, 2014, the U.S. Court of Appeals for the District of Columbia struck down the Federal Communication Commission (FCC) Open Internet rules that required equal treatment of Internet traffic and prevented broadband providers from blocking traffic favoring certain sites or charging special fees to companies that account for the most traffic. The court said the FCC saddled broadband providers with the same sorts of obligations as traditional common carrier telecommunications services, such as landline phone systems, even though the commission had explicitly decided not to classify broadband as a telecommunications service. President Barack Obama has favored net neutrality and an open Internet and urged the FCC to implement the strongest possible rules to protect it. On February 26, 2015, FCC chairman Tom Wheeler announced a decision to regulate broadband as a public utility. The agency's order reclassifies high-speed Internet as a telecommunications service rather than an information service, subjecting providers to regulation under Title II of the Communications Act of 1934. On March 12, 2015, the FCC released extensive details about these regulations. The new rules, approved 3 to 2 along Democratic-Republican party lines, are intended to ensure that no content is blocked and that the Internet cannot be divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else. Outright blocking of content, slowing of transmissions, and the creation of so-called fast lanes were prohibited. The FCC stated that it favors a light touch rather than the heavy-handed regulations to which the old regulated telephone companies were subjected. One provision requiring "just and reasonable" conduct allows the FCC to decide what is acceptable on a case-by-case basis. The new rules apply to mobile data service for smartphones and tablets in addition to wired lines. The order also includes provisions to protect consumer privacy and ensure that Internet service is available to people with disabilities and in remote areas. On April 13, 2015, United States Telecom Association, an industry trade group, filed a lawsuit to overturn the government's net neutrality rules. AT&T, the National Cable & Telecommunications Association, and CTIA, which represents wireless carriers, filed similar legal challenges. The battle over net neutrality is not yet over.

Case Study Question

1. What is net neutrality? Why has the Internet operated under net neutrality up to this point?

2. Who's in favor of net neutrality? Who's opposed? Why?

3. What would be the impact on individual users, businesses, and government if Internet providers switched to a tiered service model for transmission over landlines as well as wireless?

4. It has been said that net neutrality is the most important issue facing the Internet since the advent of the Internet. Discuss the implications of this statement.

5. Are you in favor of legislation enforcing network neutrality? Why or why not?