December 20, 2018 Feature

The Rise and Fall of Net Neutrality

By Josh Burday

Net neutrality is the principle that Internet service providers (ISPs) must treat all information transmitted over the Internet equally. It prevents ISPs from discriminating based on the user, the content, or anything else such as the origin or destination of the content. When net neutrality is enforced, ISPs are not allowed to slow down the connection to or charge extra money for visiting certain websites. They also may not block certain websites or content entirely. This principle has also been described as the “end-to-end” principle. In other words, it is the users at each end of the network in question that decide what the network is used for, not the network operator. Typically, net neutrality also means that ISPs can only charge users once for Internet access.

Would phone service be better if companies could decide who we call and what we talk about when we do?

Would phone service be better if companies could decide who we call and what we talk about when we do?

The Rise of Net Neutrality

Columbia Law Professor Tim Wu coined the phrase “network neutrality” in 2003 as an extension of the legal concept of a common carrier. Internet access under net neutrality is similar to how most Americans think of their access to telephone service. We take it for granted that when we purchase telephone service from a phone company, the company is merely serving as our conduit to making phone calls. The thought never crosses our mind that the phone company could decide who we may call or what we are allowed to discuss when we do so. A common carrier holds itself out to provide services to the general public. It may not turn consumers away or otherwise discriminate.

The way it has worked throughout the modern era of the Internet in America is that you pay your cable company or telephone company a set fee per month in exchange for Internet access. A few things might affect the price you pay. The most common differentiator for price is speed. If you want faster Internet service or business-grade Internet service, you pay more. That is about the extent of the decisions the average Internet purchaser makes—how much speed for how much money. It is possible this will change after the recent repeal of net neutrality by the Federal Communications Commission (FCC).

Shortly after Tim Wu’s coining of the now-famous term, Republican FCC Chair Michael Powell gave a speech in 2004 called “Four Internet Freedoms.” In response to a rise in restrictions on Internet usage, Powell stated that Internet users should have:

  1. freedom to access content
  2. freedom to use applications
  3. freedom to attach personal devices
  4. freedom to obtain service plan information

Nor were Powell’s words idle talk. Not long after this speech, a small phone company and Internet provider, Madison River, began blocking Vonage, a voice-over-Internet protocol (VoIP). The FCC initiated an investigation, and in 2005 Madison River paid a small fine and agreed to cease blocking Vonage. Thus, the FCC demonstrated that the principles of Internet freedom had some force behind them, and the idea of net neutrality took on a more concrete form. A couple years later, in 2007, Comcast, the nation’s largest cable company, was found to be blocking or severely throttling access to BitTorrent, a popular website. The FCC upheld a complaint against Comcast that it illegally throttled the bandwidth of Internet users, and it ordered Comcast to stop all such blocking. This is how net neutrality and its enforcement began in its relative infancy. In the years following, the FCC took a steady course of action strengthening the principles of net neutrality. This included legal battles and codifying rules that survived subsequent legal challenge.

Life after Net Neutrality

The FCC’s position on net neutrality has changed since Powell’s “Four Internet Freedoms” speech in 2004. The most visible change occurred in 2017 when President Donald Trump elevated Ajit Pai to FCC chairman (Pai was initially appointed by President Barack Obama). Shortly after becoming chairman, Pai announced plans to do away with the regulations codifying the principle of net neutrality. By June 2018 those rules were successfully repealed.

More than 80 percent of American voters favor the principle of net neutrality, yet now it is gone. What were the reasons for the repeal of net neutrality, and what are the possible impacts?

ISPs and those who wanted to repeal net neutrality argue that the regulations keeping it in place would serve to benefit lobbyists as a result of regulatory capture. They claim that consumers will end up paying more to foot the bill for the big companies’ lobbyists. In other words, net neutrality is anti-consumer and anti-competitive because regulation prevents the free market from operating to the general public’s benefit. The ISPs and companies that want to repeal net neutrality also argue that net neutrality stifles investment into broadband infrastructure. The companies may lack incentive to lay down the necessary pipes and expand the infrastructure if they will not have the opportunity to recover their investment. But some also describe net neutrality as a solution to a non-existent problem.

Perhaps we do not need to wonder how the repeal of net neutrality will impact our country. We already know that it arose in the first place because ISPs discriminated based on content and other factors. Plus, we can look to other countries in the world without net neutrality regulations for examples. If access to the Internet under the principles of net neutrality is like access to making phone calls, then access to the Internet after the repeal of net neutrality is not so different from access to television through your local cable company.

ISPs will be free to offer various “packages” instead of unfettered access to the Internet. You do not pay for unlimited access to all television networks that exist. Instead, you pay for various packages, such as basic cable, sports packages, and entertainment packages. In the future we can expect to see ISPs offering a laundry list of various packages such as a social media package (Facebook, Twitter, Instagram), a news package (New York Times, Wall Street Journal, CNN), and a sports package (ESPN, Sports Illustrated). Of course, there would likely be far more than three different packages. The ISPs are incentivized to come up with dozens of packages to get consumers to pay more. If some sort of “unlimited” package (a package offering the same unfettered Internet access you currently enjoy) is even an option, you will likely pay significantly more for that than you do now. In other words, the ISPs will be free to raise the prices to the highest levels the market can bear.

Portugal provides an example. While Portugal is still bound by some of the European Union’s net neutrality rules, there are enough holes that Internet providers are already able to offer data package deals. Meo, a wireless carrier in Portugal, offers broadband service tiers that cap users’ Internet data usage. Consumers can pay for additional data packages based on the different apps and services they use. These packages include paying an extra fee each month for each of the following: messaging, social, video, music, and e-mail and cloud. In other words, if consumers in Portugal want unlimited access to all the popular apps and websites from Netflix to Facebook, they would have to pay for the basic package as well as five additional packages.

Internet access in Portugal and the European Union’s net neutrality rules provide other examples of life without net neutrality as well. When Netflix entered the European market in 2012, some Internet providers forced it to pay “tolls” or extra fees to deliver content to customers. In other words, ISPs are able to double-charge in the absence of net neutrality regulation.

The example of Meo and its packages in Portugal also demonstrate other concerns of supporters of net neutrality. Only large, established companies such as Facebook, Netflix, and Google are part of Meo’s packages at all. Would services such as Westlaw and LexisNexis even be big enough to be part of such packages? Would their speed get cut to the point of being unusable? Practices like this stifle competition and innovation. One practice, sometimes called “zero rating,” in which a network does not charge for accessing certain apps or websites, effectively promotes certain businesses and gives them a substantial advantage. A couple of the most common culprits are Facebook and Google, although various zero-rating practices have popped up across the European Union. Among his other activities, Chairman Pai has been instrumental in dismantling zero-rating protections.

Repealing net neutrality may result in increased prices in ways not directly visible to the average consumer. Just as ISPs will be able to charge consumers more, they will also be able to charge content providers more. ISPs have the power to throttle websites and slow down their speeds. For example, they can force services such as Netflix and Hulu to pay them or face throttled speeds, leading to poor quality or even unusable streaming services. Ultimately, the extra fees different businesses are forced to pay may get passed along to the consumer by way of higher prices and subscription fees. In other words, Netflix may have to raise what it charges consumers by 50 percent or 100 percent, but the average person would not know why.

One of the most common phrases thrown around when discussing net neutrality is “fast lanes.” Imagine that the Internet as you know it is a highway, and right now everyone is able to travel at 60 miles per hour—maybe 65 if you pay for a faster connection. After repeal, ISPs may be free to slow everyone’s Internet connection down to 30 miles per hour by default and only make access to the specific content they want available at 60 miles per hour. Under this system, access to content at the previously normal 60 miles per hour is referred to as an Internet “fast lane.”

The Implications of Net Neutrality’s Demise

The implications of this for both lawyers and the public at large are startling. Large, established businesses could likely survive having to pay additional fees for their content to be provided in fast lanes, but some competitors may be driven out of business. Robert Beens, the chief executive of StartPage, a popular encrypted search engine (favored by those who do not want their search data recorded and surveilled), said the company may not survive the fees required to pay for fast-lane access. While StartPage is a successful business with 2 billion searches annually, it simply does not have the wealth that Google, Bing, and Yahoo do.

The fact that even established businesses fear they may not survive the repeal of net neutrality also highlights another problem. The practice of charging more for access to Internet fast lanes could stifle innovation and new businesses entering the market. Ryan Singel, a former reporter/editor at Wired, started up his own business, Contextly, which aims to keep readers on websites by showing them related material. Singel stated that his business could not have started up at all had he been forced to pay for fast-lane access after repeal of net neutrality. He simply could not have swallowed the increased cost. Perhaps more compelling still is the story of Jamie Wilkinson, the founder of VHX, an online video distribution company. He encountered problems as investors were less willing to provide funds to a start-up knowing that the cost of doing business will be so much higher. Investors are chilled by stories such as that of Netflix being forced to pay extra fees to ISPs to avoid having its content throttled.

It is also not implausible that ISPs would start banning access to certain companies’ websites. Such viewpoint discrimination would not necessarily even come from any ill-intent on the ISPs’ part (though perhaps it could). Market forces may leave them no choice. For example, if the public becomes angered by Breitbart News Network and boycotts it accordingly, then advertisers could pull all ads and the corresponding revenue from any ISP providing access to Breitbart. Conversely, it is not difficult to imagine that ISPs in predominantly conservative areas could be forced to stop providing access to CNN if the public considers it “fake news.” Some have accused Sinclair Broadcasting and others of using their position as broadcasters to favor certain messages, so this is not at all far-fetched. Regardless of your viewpoint, repeal of net neutrality holds frightening First Amendment implications for both lawyers and the general public.

The Controversy Surrounding Repeal

As many readers may know, the FCC faces intense scrutiny for its actions surrounding net neutrality’s repeal. On behalf of my client, a journalist, I recently filed suit against the FCC regarding the fake comments submitted during the “Restoring Internet Freedom”/net neutrality rulemaking proceeding (the proceeding that led to the repeal of net neutrality). One of the FCC’s own commissioners, many members of Congress, 19 state attorneys general, a highly respected research institution, and others have concluded that the FCC’s commenting process was highly flawed and that a great many of the comments were fraudulent.

Instead of forthrightly dealing with the problem, the FCC refuses so much as to acknowledge and deal with the fact that literally millions of comments in the largest FCC rulemaking process in the history of the nation were fraudulent. Comments were submitted by bots, submitted using stolen identities, submitted using fake e-mail addresses, and submitted from e-mail addresses that do not even contain an “@” symbol. Some have posited that the FCC intentionally facilitated the fake and fraudulent comments. The FCC refused so much as to delay its vote on net neutrality, let alone make any real effort to uncover what happened. When citizens such as my client made Freedom of Information Act (FOIA) requests for records that would allow the people to determine what happened for themselves, the FCC decided to fight to keep what happened secret. While the case is ongoing, the judge already ruled that the FCC must produce a large portion of the records it fought to keep secret (both the .CSV files and the bulk submitters’ e-mail addresses).

The public should be skeptical of any position taken by the FCC that relies on secrecy and hiding information from the public, as its actions surrounding the repeal of net neutrality do. In this instance, the very voice of the people was silenced through the destruction of the comment process as comments from real people were buried by fake and fraudulent comments. How do we measure the cost to our profession and legal system of silencing the voice of the people?

Would our telephone service be better if companies were allowed to decide who we call and what we talk about when we do? If they could reduce call quality when they did not like the content of our conversations, all while charging us more? The Internet as we know it is heading in that direction.

Josh Burday is an attorney at Loevy & Loevy. He works on a variety of matters, including Freedom of Information Act and First Amendment cases, as well as assorted business litigation. Among other results, Josh helped to secure the release of all fatal Chicago police–involved shooting videos from 2011 to 2016. Recently, Josh represented local residents in forcing the Chicago City Council to allow public comment at its meetings. Currently, he represents a journalist in a suit against the Federal Communications Commission seeking release of records related to the net neutrality comment process.