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The case against net neutrality

| Friday, November 21, 2014

Editor’s Note: This is the second column of a two-part column series that examines the current debate surrounding “net neutrality.” 

On the surface, the case for net neutrality seems simple. As discussed in Monday’s column, “The Case for Net Neutrality,” net neutrality appears to diminish the monopolistic power of internet service providers (ISPs) and ensure equal access to all content for all users, safeguarding a “free and open internet.” However, in moving beyond the rhetoric associated with this debate, it is clear that there is a persuasive case against net neutrality.

The understanding that the internet is an open and free highway is simply not true. Major web content providers already benefit from “peering connections” and “content delivery servers,” which serve the same purpose as the feared internet fast lanes. However, this technology has been used by large tech companies for years, and the internet is not the apocalyptic wasteland we are promised by net neutrality supporters. In addition, it is important to reference that 75 percent of broadband internet usage is hogged by 10 content sources, eliminating any conception of the internet as millions of diverse pieces of data moving through a single road. Returning to the above analogy, consider an ISP’s infrastructure as not a public highway but rather as an extensive, rented out private driveway, with a majority of traffic coming from a few sources. Any constructive conversation regarding net neutrality must move away from an antiquated and simplified understanding of the internet.

Opponents of net neutrality draw two conclusions from this information. First, it is clear that all internet data is not created equally. Therefore, there is ample justification for not treating all internet data equally. Streaming a Netflix movie is an inherently different process than accessing your friend’s blog from abroad. Permitting ISPs to manage and prioritize their massive infrastructure will allow these companies to provide better service. Second, establishing net neutrality rules will provide ISPs and content providers with significantly less power to develop innovative service models. For example, ESPN, in an effort to grow its online offerings, agreed to cover any Verizon user’s data charges above his data plan that was used for ESPN content. Verizon receives additional fees from ESPN, users get an extended data plan for no charge and ESPN grows its online presence. Even though such a deal was mutually beneficial for all parties, net neutrality supporters immediately objected. While one can argue that such deals stifle potential competitors to companies like ESPN and Netflix, even though their $40 billion and $23 billion respective market caps might play a role too, limiting the flexibility of ISPs to control their own infrastructures prevents potentially innovative opportunities for ISPs to better their service offerings

In making the case against net neutrality, one must address potential counter arguments relating to an ISP’s potential to “control the internet” and limit legal content. While such a situation is possible, one must consider how such an action would affect an ISP’s business. ISPs generate revenue by providing internet access to consumers. If a company were to intentionally dilute a customer’s internet access, it would sharply decrease revenues. Imagine the impact selective search results based on political interests would have on Google. Despite the ability to “control the internet,” any effort by ISPs to do so would be a fatal business decision and therefore highly unlikely.

Now, this assumes a competitive market, and there are legitimate concerns regarding the monopolistic traits of some ISPs and a need for increased competition. However, saddling the internet service industry with regulation will serve as a barrier to entry to competitors. Efforts to classify the internet as a public utility will not increase competition among ISPs but will likely increase an incumbent ISP’s monopolistic power.

One of the most familiar yet powerful arguments against net neutrality holds that government control and regulation of the internet has dangerous implications for the future of internet access, service and quality. By classifying the internet as a public utility, the Federal Communications Commission (FCC) would open the internet up to price control and content and service regulation that is designed to handle traditional telecommunications services. Historical evidence clearly indicates that clunky, bureaucratic management and regulation of a space as dynamic as the internet will stifle innovation and technological progress. In the past, the government has adopted a light touched approach to regulation of the internet, contributing to rapid technological transformation and innovation, disrupting and positively changing the way by which the world communicates, learns and connects.

In President Obama’s recent statement urging the FCC to adopt net neutrality principles, he argued, “net neutrality [is] essential for preserving an environment … that makes up the internet as we know it.” In considering the internet 10 years ago, the internet today and the potential of the internet in 10 years, is preserving the internet as we know it a cause worth fighting for?

The views expressed in this column are those of the author and not necessarily those of The Observer.

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