Net Neutrality Tweet

Net Neutrality Hysteria, Political Philanthropy Rising, and a New Bitcoin Order From Chaos?

Here’s What You Need To Know

Last week, the Federal Communications Commission (FCC) released the tentative agenda for its December meeting. This meeting will include the agency’s plan to rollback so-called “net neutrality” rules implemented in 2015, which imposed government regulation of Internet Service Providers (ISPs) like utilities. The announcement has set off a wave of hysteria and misinformation, in a move being described as a “victory” for big telecommunications companies and a damaging loss for consumers and supporters of a “free internet.”

Yet the noise surrounding net neutrality is not supported by the realities of what the FCC is proposing to do. Given that this would be the sixth change regarding this policy over the last ten years, it is appropriate to take a step back from the ledge to evaluate the issue on its merits. Here are the facts you need to navigate this issue:

  • What Is Net Neutrality? The term is generally used to describe “the principle that individuals should be free to access all content and applications equally, regardless of the source, without Internet Service Providers discriminating against specific online services or websites.” However, the current kerfuffle is specifically focused on the 400-page set of rules implemented by the FCC under Chairman Tom Wheeler in 2015 that designated Internet providers as telecommunications utilities under Title II of the Communications Act of 1934 – a “heavy-handed” and clumsy approach to upholding the principle of a free and open internet.
  • Why Eliminate The FCC’s Net Neutrality Rules? In a Wall Street Journal op-ed, FCC Chairman Ajit Pai expressed his desire to see the internet return to the bipartisan framework of the Telecommunications Act of 1996, which called for an internet “unfettered by Federal or State regulation.” In addition, the current regulations have resulted in a 5.6% decrease in broadband network investment – the first time there has ever been a decline outside of a recession. When compounded with the increased cost for smaller ISPs to comply with the rules, as well as the delay of new services on account of uncertainty stemming from them, the unintended consequences of this policy may be harming consumers rather than helping them.
  • The Arguments Cited For Net Neutrality: Proponents of net neutrality are warning that ISPs like Verizon, Charter, Comcast, and others could decide to raise prices, block certain websites, and change the speed that users download certain content. In foreshadowing a doom and gloom scenario, reporters and legislators alike have cited Portugal – where a leading mobile phone provider bundles specific apps together and offers different prices depending on the amount of data used – as an example of what can happen “with no net neutrality,” but Portugal makes a poor example, as Portugal has active net neutrality regulations, as do all countries in the European Union.
  • The Effects Of Rollback On Innovation: A former chief economist at the FCC views deregulation positively, arguing the regulations are anti-competitive and stifle innovation and investment. To illustrate this point, the economist cites AOL’s creation of a mass market for computer networks in the 1990s and the invention of voice-over-internet in the mid-2000s, both innovations that transpired in the aftermath of deregulation.
  • Holding ISPs Accountable: A removal of net neutrality rules will bring things back to how they were prior to 2015. The Justice Department will have the authority to determine if any conduct is uncompetitive, and the Federal Trade Commission (FTC) will again police ISPs and protect consumers. Furthermore, an open, competitive market allows for the public to reward or punish ISPs depending on their actions by choosing who they do business with. Nearly 40% of Americans already have access to more than one broadband provider, and as phone companies expand their fiber options, satellite internet improves, and 4G LTE expands highspeed access to more consumers across the country, that figure will only increase. If an internet provider was a bad actor on net neutrality, it would only increase the incentives for others to compete in that market.
  • So Why Is This Issue So Controversial? Net neutrality has drawn the attention of celebrities, including Cher and actor Mark Ruffalo, who have weighed in on the matter, expressing concern about “less” Americans having internet access and the consolidation of information into “the hands of a few.” Yet Commissioner Pai noted recently that some tech companies are promoting misleading claims about the policy, which benefits them by ensuring they do not have to worry about how much bandwidth their content requires having a financial consequence for them or their consumers. Pai also noted that tech companies themselves are not pure when it comes to a free and open internet, citing recent actions by Twitter against a Republican Congresswoman and other voices the company did not agree with, an issue we raised in August as a potential regulatory issue for tech companies.

A vote to remove the net neutrality regulations will be held on December 14th. Keep these facts in mind when observing the debate over the next few weeks, and remember that despite the heated rhetoric, ending net neutrality is not the end of the world.

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