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Net Neutrality in a Nutshell

Net Neutrality in a Nutshell

Net neutrality proponents make the case for the freedom of the Internet. That freedom has allowed startups such as Google, Facebook, Myspace and Groupon to flourish, since there have been no Internet access barriers to entry. Overall, the proponents fear that without Net neutrality, the larger ISPs will control which companies succeed or fail as the Internet continues to evolve.

By Peter S. Vogel
05/11/11 5:00 AM PT

No doubt you've heard the term "Net neutrality." Proponents and opponents have much to say on this topic. However, many Internet users don't even know what it means, or how it will affect them.

What is Net neutrality?

"Net neutrality" is short for "network neutrality" or "Internet neutrality." The concept addresses user access to the Internet, and the debate around Net neutrality centers on whether ISPs (Internet service providers) can limit, tier, block or otherwise affect Internet performance.

Without Net neutrality, ISPs can even charge higher fees for more bandwidth and higher-speed access to one vendor and not others, thus establishing tiers of service. For instance, without Net neutrality, an ISP could sign a lucrative contract with Netflix, then charge lower rates for its customers who use Netflix rather than Blockbuster.

Or, if an ISP preferred (e.g. had a financial interest in) one search engine over another, that ISP could force its customers to the preferred search engine by charging customers more each time they used any other search engine.

The FCC Proposal

The Federal Communications Commission (FCC) jumped on the bandwagon to address this issue with regulations. On December 23, 2010, the FCC issued a 170- page report establishing three guidelines for Net neutrality that include a two-tier system -- one for fixed lines and the other mobile:

i. Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services;

ii. No blocking. Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services; and

iii. No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.

Interestingly, the FCC vote was 3-2, based on party lines; the two dissenting Republican commissioners issued separate statements.

Background of FCC Intervention

In 2008, the FCC sanctioned Comcast for improperly slowing down the traffic of BitTorrent file-sharing because the FCC Internet guidelines at the time required broadband providers to treat all network traffic equally (true Net neutrality).

As a result of the sanction, Comcast challenged the FCC in federal court. In April 2010, the U.S. Circuit Court for the District of Columbia unanimously ruled that the FCC did not have the authority to force ISPs to keep their networks open to all forms of content (Comcast v FCC).

Actually, the FCC's attempted regulation of the Internet has more history. As many of us remember, the FCC has historically regulated telecommunications, including managing the Bell breakup in the 1980s.

Of course, the world has changed a great deal since the Bell breakup, and now much of communication is Internet-based. As a result, the FCC sees its duties to include Internet regulation through Net neutrality. But the FCC's Net neutrality strategy is part of a bigger plan to provide high speed broadband to the entire U.S., a plan the FCC calls the "National Broadband Plan."

The National Broadband Plan was published after dozens of public workshops drawing more than 10,000 in-person and online attendees, and more than 23,000 comments from 700 parties. Essentially, the National Broadband Plan is a response to the perceived need for the U.S. to expand broadband Internet access and spur economic growth, much like the boom that resulted from the U.S. transcontinental railroad and electricity more than a century ago.

Among other things, the National Broadband Plan includes establishing competition policies to "have a broad set of tools to protect and encourage competition in the markets that make up the broadband ecosystem." The National Broadband Plan provides for Net neutrality as an essential part of the FCC's regulation of Internet communications.

What's Wrong With Net Neutrality?

As noted above, Net neutrality as proposed by the FCC creates two classes of Internet providers: fixed-line and mobile. After its loss in the Comcast case last year, the FCC had many discussions with significant vendors -- such as Google and Verizon -- that were interested in shaping the future of the Internet.

Actually, Google has been very vocal about Net neutrality and has been posting public policy blogs on the topic for many years. Verizon has fought the FCC in the Courts as it believes that route to be cheaper than administrative challenges.

Also, organizations such as the Electronic Frontier Foundation (EFF) have a more fundamental problem with the Net neutrality proposed policy, since the EFF just doesn't trust the FCC at all: "Historically, the FCC has sometimes shown more concern for the demands of corporate lobbyists and 'public decency' advocates than it has for individual civil liberties."

Essentially, the EFF opposes the FCC's Net neutrality plan solely because it has been offered by the FCC, so one can conclude that the EFF sees itself as a social watchdog that has a duty to challenge Internet regulators. One could conclude that the EFF thinks natural market forces are better than FCC regulation.

What Do Net Neutrality Proponents Say?

Net neutrality proponents make the case for the freedom of the Internet. That freedom has allowed startups such as Google, Facebook, Myspace and Groupon to flourish, since there have been no Internet access barriers to entry. Overall, the proponents fear that without Net neutrality, the larger ISPs will control which companies succeed or fail as the Internet continues to evolve.

No one can really predict the future evolution of the Internet. When "Web 2.0" was coined by Kevin O'Reilly in 2002, no one could have imaged the transformation brought about by Facebook, LinkedIn, Myspace, Foursquare and a myriad of social media sites. Net neutrality proponents support the idea that creativity and ingenuity will continue to propel such major changes, and that Internet access issues should not interfere.

As the Internet changes over time, it is fascinating to see its evolution and the great dependency that we all have on it. The growth of social media only makes us more dependent, and the proliferation of the iPad and other tablets has changed how we will use the Internet in the future. Net neutrality, or the lack of it, may impact Internet use for years to come.


E-Commerce Times columnist Peter S. Vogel is a trial partner at Gardere Wynne Sewell, where he is chair of the eDiscovery Team and Chair of the Technology Industry Team. Before practicing law, he was a systems programmer on mainframes, received a masters in computer science, and taught graduate courses in information systems and operations research. His blog covers contemporary technology topics. Vogel can be reached at pvogel@gardere.com.


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