Reference no: EM131253433

Net Neutrality in the EU and the United States

On April 3, 2014, the European Parliament voted to unequivocally support net neutrality, the principle that all data streaming across the Internet is treated equally regardless of content, user, site, platform, or mode of communication. In the past, Internet service providers (ISPs) had blocked or slowed down Skype and Netflix data as it flowed across their pipeline, affecting approximately 100 million users. The new European Union (EU) regulation only allows ISPs to slow down or block pipelines when they are protecting network security, relieving temporary congestion, or adhering to a court order.

Advocates of net neutrality share numerous concerns. If ISPs and telecommunications companies are allowed to block or interfere with data transmission at will, they could potentially block competition, hike up prices, and hurt both consumers and the free market. Some people, however, oppose net neutrality, or at least they object to placing tough limits on charging third parties for faster network access.

In 2007, Comcast-today the largest broadband provider-blocked Internet content coming from file-sharing networks, such as BitTorrent. Although the company served as a means for users to share copyrighted movies and music, BitTorrent also provided a way to disseminate illegal content. When users tried to upload or download files, Comcast sent a message to each PC that looked like it came from the other PC and that the users could not see. The message commanded the other PC to stop communicating. Comcast likely took this step to prevent this peer-to-peer technology from slowing down its network. Some criticized Comcast's decision as a breach of net neutrality, and Comcast voluntarily ended the practice. Comcast, however, has argued against placing too many restrictions on telecommunications companies. The company points out that unfair legal restrictions might deter IT companies from investing in infrastructure to increase speed, extend services, and improve efficiency.

In 2011, however, when Comcast merged with media content conglomerate NBC Universal, many people worried that the merger would destroy the online video market. They feared the giant Comcast-NBC Universal company would be tempted to block content or favor its own content. By the early months of 2014, indeed, Netflix saw streaming speeds for its online video rentals decline by 27 percent. The company reluctantly agreed to sign a "mutually beneficial interconnection agreement" with Comcast. Netflix had wanted to connect to Comcast's broadband network without compensating the company for the heavy traffic level generated by Netflix users.

The EU law would not bar such agreements, as it allows ISPs to offer a short list of specialized services at a higher price. But these services are limited to video on-demand, data-intensive cloud applications, and other high-load activities. Many hope that the EU decision will reverberate across the Atlantic where the Federal Communications Commission (FCC) is reformulating its net neutrality rules. The EU legislation demands that any interference to relieve temporary network congestion must be "transparent, nondiscriminatory and proportionate." As a result, a telecommunications giant such as Comcast would have to come out in the open about slowing down data transmitted from a particular site or application. The intent of the EU legislation is to allow the Internet to continue to drive economic growth, technological innovation, and social development.

Discussion Questions
1. What is net neutrality, and what does it mean for Internet users, small start-ups, and large telecommunications companies?

2. What does net neutrality mean for governments? Which types of governments would you expect to embrace net neutrality and which would not?

Critical Thinking Questions
1. Is the agreement of Comcast and Netflix in the best interest of consumers? Why or why not?

2. Is Comcast's purported practice of surreptitiously slowing or stopping the flow of data to sites that hog bandwidth ethnical? Why or why not?