Network Neutrality Circus in the Big Tent

The midterm election may have been exhumed the worst regulatory pox ever seen in the high-tech world – network neutrality. If you venture far left in the Congress, you’ll stumble into a network neutrality caucus gearing up to re-impose network neutrality.

Network neutrality has a disturbing history. In 2005, it started as a few useful principles worthy of discussion that might protect consumer freedom to roam and download information from the Internet. The original principles were soon voluntarily accepted by Internet Service Providers (ISPs) and guaranteed as consumers’ rights:

  • To access lawful content of their choice;
  •  To run applications and services of their choice;
  • To connect to their choice of legal devices that do not harm the network; and
  •  To have competition among network, application and content provider.

The principles did not please some of the entertainment and social networking websites, whose cause was taken on by the pro-regulation activists. Gradually the pro-network neutrality contingent twisted the guarantee of competition into a ban on paid prioritization, regardless of how it might undermine competition or disserve consumers.

Forrester Research found that online shoppers expected the web pages they visited to download content instantly. When a page loads at slower than the expected speed, many of them simply click out. Even a one-second delay could lead to “11% fewer page views, a 16% decrease in customer satisfaction, and 7% loss in conversions.” ISPs can configure their network and add resources to address those consumer expectations of speed for a minor increase in price.

When ISPs have offered zero-rating (i.e., allowing consumers to avoid usage charges for websites that normally charge for their services), it has been popular with ISP customers and websites. Zero-rating is the internet equivalent of offering an 800 number to a landline customer. It benefits both the consumer calling that 800 number and the business or government service paying for the call. It harms no one, but it infuriates proponents of network neutrality – they want neither the consumer nor the business to have the convenience.

Actual net neutrality regulations were not adopted until 2015, when the FCC prohibited broadband companies from blocking websites, slowing connection speeds, and charging for faster delivery of content.

The FCC lacked lawful authority to impose net neutrality on an internet service provider, so to avoid network neutrality regulations being tossed out by a court (for the third time), the FCC chose to classify ISPs under Title II of the Telecommunications Act of 1934. The 1934 Telecommunications Act Title II classification gives the FCC the authority to impose price controls, set new taxes, and impose hundreds of other regulations on the ISPs.

Of the 700 rules already in place, for those classified as Title II entities, FCC Chairman Tom Wheeler said he would exercise forbearance by picking, choosing, and enforcing only those rules he wanted to force upon the ISPs.

Earlier this year, the current FCC repealed these net neutrality rules, much to the anguish of pro-net neutrality protests and stunts.  Yet, that repeal never lead to a trail of incidents where consumers experienced ISPs blocking, slowing downloads, or giving one website faster lanes than another.

Although a handful of people might assert that network neutrality is embraced worldwide, that is not so. The European Union (EU) suggests that network neutrality is used across the Union. That is both untrue and misleading. Many EU countries embrace their own version of network neutrality. Spain and Portugal do not adhere to much of the EU’s network neutrality.

Non-EU countries Switzerland, Norway and Denmark voluntarily adhere to a few principles from network neutrality. The Swiss code acknowledges that different applications require different priorities, so where video packets for telemedicine or movies need a particular amount of bandwidth to guarantee glitch-free delivery, they are allowed to get it through paid prioritization. Australia likewise also has pragmatic principles and voluntary adherence. Similar pragmatism applies in Japan. Singapore regulations focus on non-blocking, and Singapore regulations accommodate paid prioritization.

Russia and China pretend to impose strong network neutrality laws on their ISPs. However, since they block access to many political opponents’ sites and give preferential treatment to official state-run sites, their embrace of network neutrality is a charade that would fool only fellow travelers.

There may be hope that consumers and ISPs can be spared more years of uncertainty and a quest to identify phantom misbehaviors. AT&T and others in the ISP industry are ready for a period of sanity.

Urging the Congress to address network neutrality, AT&T CEO Randall Stephenson said, “We don’t block websites. We don’t censor online content. And we don’t throttle, discriminate, or degrade network performance based on content. Period.”

Countries that disallow blocking and throttling, yet allow paid prioritization, have carved out the best posture for their consumers, their ISPs, and information websites. Perhaps Congress can learn from nations who have found merit in paid prioritization – but no one shows sympathy for blocking and throttling.

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