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Everyone claims to be for an open internet. So what’s the latest net neutrality fight really about?

REUTERS/Aaron Bernstein
The new chair of the FCC, Ajit Pai, is moving to reverse previous action to strengthen net neutrality in law; in the process, he has unleashed a torrent of grassroots fury from open internet advocates.

To hear some tell it — Mark Zuckerberg, John Oliver, Sen. Al Franken — you might believe the internet as we know it is on the brink of total collapse.

An impending rule change from Donald Trump’s administration could give big telecommunications companies the green light to change the way the internet operates by allowing them to enact their boldest ideas to wring as much money as they can out of the web, at the expense of the consumers and companies that depend on it.

What would that doom and gloom scenario look like? Consumers being forced to pay more to access certain content, enduring slow speeds for internet data, and having difficulty accessing certain apps or sites that haven’t kicked in more cash to the big companies in order to privilege their content.

What stops this from happening currently is a principle called net neutrality, or the idea that the internet should be available to people with minimal restrictions and barriers to access. Under net neutrality, if you pay for the internet, you should be able to access every corner of it — from Netflix to email to this article — at the same speed, and without discrimination, like how people access water or electricity.

Under Barack Obama, the Federal Communications Commission took historic steps to codify net neutrality in regulatory law, delighting pro-net neutrality policymakers like Franken, activists, and internet-dependent businesses that have led the fight for this principle.

However, the new chair of the FCC, Ajit Pai, is moving to reverse previous action to strengthen net neutrality in law; in the process, he has unleashed a torrent of grassroots fury from open internet advocates who believe he is ushering in a digital dark age for consumers — and sparking a fight for the soul of the internet.

What is net neutrality?

To supporters, the concept of net neutrality is the bedrock of a free and open internet. They believe that it maximizes the benefit of the web for everyone, from individual users to the companies that thrive on the internet, from Facebook and Google to all kinds of retailers who have migrated much of their operations online.

But for most of its history, the internet was not subject to any specific regulation on net neutrality, a concept that was only given a name in the early 2000s.

In 2005, the FCC outlined some basic but non-binding principles for an open internet, which were strongly based on net neutrality. These were backed up by a more forceful policy, adopted in 2010, which prohibited service providers like Comcast and Verizon from blocking access to certain sites or apps, among other things.

Court challenges from major telecom companies resulted in suspensions of some parts of FCC open internet rules. A landmark 2014 case in the D.C. Circuit Court, Verizon v. FCC, found that the FCC’s open internet rules could only apply to so-called “common carriers,” like telephone networks.

Obama’s FCC moved in 2015 to classify internet service providers, or ISPs, as common carriers, giving the feds the ability to protect net neutrality on the internet. That decision placed broadband internet within Title II of the Communications Act of 1934, which contains strong provisions to ensure that operators of telecommunications services are acting in the public interest.

It states that carriers under Title II classification cannot “make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services.”

The history of the internet up to 2015 yielded some examples of what companies like Verizon, Comcast, and AT&T might do with significant power over levers of the World Wide Web if they had greater latitude.

There are, for example, plenty of instances of ISPs deliberately slowing down internet speeds for certain types of data, a practice known as throttling, which users experienced particularly with streaming video and downloading files.

Service providers also used their power to block competing services from other companies. From 2011 to 2013, a group of three telecom companies, AT&T, Sprint, and Verizon, blocked their customers’ access to Google Wallet, a mobile payment app that was competing with a different service that the trio had invested in.

During oral argument for Verizon v. FCC, a lawyer for Verizon admitted that without open internet regulation, the telecom giant would be exploring ways to privilege some types of data over others. The ISPs are particularly interested in something called paid prioritization, through which they could charge companies that rely on using a lot of internet bandwidth — think Netflix, Spotify, Amazon — more in order to access higher speeds.

A big decision

Before the 2015 rule was adopted, the telecom companies did not implement changes that made the internet significantly different, like the “fast lane” that advocates often bring up as an example of how decreased regulation could make wide swaths of the internet a hell of slow speeds and loading bars.

But even if the ISPs didn’t move to create a data dystopia before net neutrality rules were implemented, advocates and policymakers believe that new leadership at the FCC will open the door for them to do so in the future.

The person at the center of it all is Ajit Pai, a Republican attorney and a former Verizon employee, who was named new chairman of the FCC by Trump. Pai is a former member of the FCC board of commissioners, and was one of two dissenting votes against the 2015 open internet rule.

Since taking the reins at the FCC, Pai has put into motion the process of overturning the prior decision on net neutrality, which would mean that ISPs are no longer subject to the rules outlined in Title II of the Communications Act.

In May, the FCC opened its proposal for public comment, and advocates of net neutrality have mobilized to inundate the agency with negative comments — over 7 million have been registered so far, most of them negative.

Pai has stated that he believes in a free and open internet, but he has made the case that the 2015 rule is an example of regulatory overreach. He and others make the point that there is little basis to substantiate net neutrality advocates’ fears of a radically transformed internet.

Regulation at this stage, they argue, is a solution in search of a problem. The ISPs, the only corporate interests in favor of Pai’s move, have argued that the Title II regulation stifles their ability to innovate new products, keep costs down, and invest in more telecommunications infrastructure.

The ISPs say that a free and open internet can be sustained without the Title II rules, which they believe harm their ability to deliver a fast and affordable internet to customers. In a statement supporting net neutrality, Comcast said that it is Congress’ responsibility to set clear guidelines as to how the internet should be regulated.

“The best way to end the game of regulatory ping pong that has been played in the net neutrality space for the past decade,” Comcast said, “would be for Congress to act and give clear legal authority and legislative direction.” As some point out, however, the telecom companies’ substantial lobbying clout would essentially enable them to write that legislation.

In an interview with NPR, Pai said the best way to approach issues with the internet is to regulate after, not before, market failures. “Preemptive regulation is appropriate when there's a major market failure — when the internet is broken,” he said. “And the point I've simply made is that, if you look at the internet that we had in 2015, we were not living in some digital dystopia. There was nothing broken about the marketplace in such a fundamental way that these Title II regulations were appropriate.”

Soumya Sen, a professor at the University of Minnesota who specializes in internet networks, cautioned that increased Title II regulatory power is not a cure-all for the internet’s problems, like the limited options consumers have for internet service.

“It comes down to, what are the sources of the problems? It might be a better result with targeted regulation than broad-brush regulation like Title II,” he said. “We don’t know how it’s going to solve all these problems that may or may not arise in the future.”

The opposition

Advocates of net neutrality aren’t buying this line of argument, and say that the FCC’s protections are there for a reason — to counter the considerable power and influence of the telecom titans.

Sen. Franken, who has been a reliable defender of net neutrality in the Senate, said that it’s clear what the ISPs would do with the internet if these protections were not in place, citing paid prioritization as an example.“There was a need to preserve net neutrality,” Franken told MinnPost.

Franken said that the 4 million public comments supporting the 2015 FCC order clearly indicated that consumers want the agency to protect net neutrality. “Pretty much everyone except for just a handful of these multi-billion dollar ISPs were really happy when the FCC responded by enacting these open internet orders,” he said.

“Now this is being threatened by the new chairman of the FCC… We’re trying to send a message, we’re telling the FCC and Chairman Pai to keep a strong net neutrality rule in place.”

Fifth District Rep. Keith Ellison, another net neutrality advocate, cast it as a free speech issue. “The internet provides a space for free expression,” he said in a statement, “and makes room for voices that are shut out of mainstream media.”

“Title II classification of the internet prevents a handful of powerful companies from controlling how Americans access the internet,” Ellison said.

Net neutrality is a more popular concept among Democrats — a Wednesday Capitol Hill press conference on the topic featured only Democratic lawmakers — and though some Republicans back net neutrality, Pai’s move fits nicely within the GOP’s broadly anti-regulation outlook.

Third District Rep. Erik Paulsen said in a statement that a free and open internet is “vital,” but said — without mentioning the 2015 open internet rule specifically — that “heavy-handed rules” stifle innovation. “We should continue to ensure internet freedom without government micromanagement by unelected bureaucrats,” he said.

‘A dark path’

Outside of Congress, a broad coalition of interests have mobilized to keep current net neutrality rules in place. Progressive activists have joined with open internet advocates in circulating petitions and organizing other action; the leaders of the world’s most powerful tech companies, from Facebook’s Mark Zuckerberg to Amazon’s Jeff Bezos, have made personal pitches to the public, asking for support for net neutrality.

According to the advocacy group Fight for the Future, many websites, organizations, and businesses participated in the July 12 Day of Action on net neutrality, from Reddit to Netflix, Airbnb to Twitter.

The period of public comment on the rule will close in mid-August, and the FCC could take a vote on a final decision as early as October. According to Franken, the strategy is to gin up so much negative public opinion that it pressures one of the Republican commissioners on the FCC board to change their mind, which would scuttle the policy change. If that fails, a court challenge is all but inevitable.

If the change does ultimately stand, some, like the U of M’s Sen, are cautioning open internet advocates that not all is lost. He argues the principles of net neutrality can still be protected even without the current Title II protections — and that they could even be better protected under a different scheme.

Thanks to market forces and public opinion, Sen suggests that ISPs won’t immediately move to make the draconian changes that some are expecting. He cited the example of widespread anger from consumers after Verizon and AT&T terminated their unlimited data plans, an unpopular move that both companies later reversed.

“If there are changes, I think they will be gradual,” Sen said. “They will test the waters and see how the consumers react to them.”

Franken maintained that, if the new rule were to go through, it’d be tantamount to fundamentally changing the nature of the internet — from a free, open platform to one with the potential for small, powerful interests to control information.

“It takes us down a potentially very dark path,” he said. “1984, kind of, where you get your information from a decreasingly small number of sources, and we don’t want to do that.”

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Comments (14)

PIes

As I see it, and by the way, my ignorance on this issue is massive, it's all a question of whether you want to have a big piece of a small pie, or a small piece of a big pie. The correct answer to this question is, "It depends".

Here are some questions.

Who are the real parties in interest here? Small consumers like me? Or is this a battle, in effect, between Internet service providers, and say Netflix? Is this just another form of the ancient battle between technology and content? Edison v. DW Griffith? Edison argued that his patent on movie projectors allowed him to control the films that were shown by them. It's one reason why movie makers left New York and New Jersey where courts were sympathetic to Edison for California where they weren't.

Those tears of the big vendors are crocodile tears:

"Let us guard your swimming pool, we won't bite."

They would like to set the environment in which we seek their services. No wonder they'd like our national legislature to decide this issue - they can buy wheelbarrow loads of Representatives and Senators very cheaply, based on their scale of revenue.

These are some of the LEAST trusted companies in America, and for good cause.

We need protection from the involvement of the House and Senate. The power of the agency is more accessible, in spite of its chairman.

Real parties in interest

To a certain extent, this is a battle of giants between companies like Netflix and Amazon versus the "common carriers" like AT&T, Verizon, CenturyLink and Comcast. The "common carriers" are really whose who have monopoly power here with thousands of miles of fiber optic or coaxial cables accessing people's homes and businesses. There has historically been some sort of separation or outright prohibition against "common carriers" regulated under Title II of the Communications Act of 1934 and the provision of "non-common carrier services" or products, like e.g. telephones or computers or computer software. AT&T's "leveraging" of its control over common carrier services and access to common carriage is what lead to the AT&T system break-up in 1983.

There's almost nothing left today of what anyone might call "regulation" of these "common carriers." Recently Minnesota AG Lori Swanson started an action against CenturyLink for fraudulently billing customers for internet services. The case is just started but it's based upon real complaints so I'll be surprised she doesn't get some kind of consent decree just as what resulted in the Well Fargo scam.

Internet service is not subject to "tariff regulation" like tradition telephone service is. To me, it makes no sense but these companies claim their ability to "innovate" is stifled. That's the same argument used by the banking and financial service industry to come up with all of the "innovative products" that resulted in the 2008 financial collapse, ripping off millions of people and enriching the few. It's all baloney.

Internet service is not

Internet service is not subject to "tariff regulation" like tradition telephone service is. To me, it makes no sense but these companies claim their ability to "innovate" is stifled.

Tariff is communications parlance is what the phone companies charge you.

Just in thinking about this from a place of ignorance, what is happening now is the ISP's are not permitted to discriminate. Is that true? What that could mean is that huge users like Netflix are subject to the same tariffs as small users.

"That's the same argument used by the banking and financial service industry to come up with all of the "innovative products" that resulted in the 2008 financial collapse, ripping off millions of people and enriching the few. It's all baloney."

It's also the same argument technology innovators have been making forever. So what is this business more liike? Banking? Or the movie business, or perhaps the technology invasion that blew up the monopolies of companies like ATT and IBM? Is that the issue we are addressing today?

Discrimination and innovation

Is it true that"what is happening now is ISP's are not allowed to discriminate"?.

Not exactly. Internet service is outside of the "core" of Title II common carrier tariff regulation but the FCC ruled that the internet will be subject to partial nondiscrimination regulation without tariffs to maintain "net neutrality." So, large and small users re protected alike by a policy of net neutrality that prohibits ISP's from creating higher priced "fast lane" services. But ISP's are still free to discriminate by negotiating contracts with internet customers rather than being subjected to "tariffs" that establish one-size-fits-all contracts requirements for classes of customers.

The big issue I think is about the best tools for dealing with imperfect markets, recognizing that the "free market" is mostly, if not entirely, a myth or abstract intellectual construct. The banking and financial industry is an example of "free market" thinking running amuck and becoming a dangerous ideology so that regulations which prevent con artists from the people's money is claimed to "interfer with innovation.". Firms like AT&T and IBM and the other former telco's( and now COMCAST) have a history of using their privileged corporate powers which resemble permanent patent monopolies to obstruct and stifle innovation.

The internet

Firms like AT&T and IBM and the other former telco's( and now COMCAST) have a history of using their privileged corporate powers which resemble permanent patent monopolies to obstruct and stifle innovation.

Is it possible that it's the content providers who are using their monopoly over what people actually use the internet for to obstruct and stifle innovation?

Content providers and monopoly

"Is it possible that it's the content providers who are using their monopoly over what people actually use the internet for to obstruct and stifle innovation?"

I suppose that would depend. What comes to my mind as a "content provider" is Facebook, Netflix or perhaps one of the other streaming services or channels. But a content provider could also be one of the thousands of websites,bloggers. I think of these as "content providers." Do Facebook or Netflix have monopolies?

But a content provider could

But a content provider could also be one of the thousands of websites,bloggers.

I don't think those guys are who the ISP's are targeting. Their highways are being used to transfer a vast and increasing amount of data for companies like Netflix. It's their action, the ISP's want more of a piece of.

Right, but we don't know

Who knows where this will go?

Right now, internet access is "free"in the sense the user who may or may not be a content provider doesn't pay extra for having a high speed service which can access Facebook or Netflix or Minnpost or the New York Times or some friend who's a blogger. You're right that the ISP's want a part of the Netflix action. How they see that happening I think is in charging for higher speeds that for example, you'd have to pay if COMCAST provided cable TV to your home. For starters, ending net neutrality so that could happen will segment the internet into premium and not premium services at the least. But there's more. Our Minnesota ISP, CenturyLink, partners with DirectTV a satellite service which competes with Netflix and cable TV. Other ISP s have similar deals. Should CenturyLink be able to price internet services to disable its competition like Netflix for DirectTV satellite service?

Just a point of clarity

My wife happens to work for CenturyLink. That arrangement no longer exists as AT&T has purchased DirecTV. Centurylink now offers an internet based cable TV service called Prism. This makes your point even more relevant I would think.

Monopolies

Do Facebook or Netflix have monopolies?

Both Facebook and Netflix are huge companies with a great deal of market power. And Netflix in particular sends huge amounts of data over the ISP highways and both promise to send even more. The ISPs want a better deal for themselves both for their existing lines and any future lines they want to build. I don't think the concern both sides want to make this about in their public issue campaigns, the small consumer, has much to do with their real interest at all. And after all noise I think the various sides will hammer out a deal which will pretty much leave the small consumer out in the cold. It's something we saw with Amazon.

What I would like to see here are politicians who understand what the real as opposed to imaginary interests of consumers are. What is it exactly that you want? If you are a small business person, a hardware owner store owner in Duluth, is it really important that your website downloads a tenth of a second slower in Australia if that means a cost savings to you? What do you spend most of your time before a computer doing? What do you do that makes that experience most valuable? Aren't those things you politician should be pressing for as he or she addresses these issues?

Market power

I question whether Facebook or Netflix have what is traditionally defined as "market power." "Market power" implies the power to control price. And that depends on what you define as the competition or the "market." if you define "market" broadly as visual entertainment, then Netflix and Facebook are essentially two more networks like NBC, CBC, ESPN, MSNBC etc. Does a channel like ESPN have "market power"? I seriously doubt it. But if you are looking at "sports channels" then I would probably say, yes. Huge budgets and cash flows and customer bases do not automatically mean "market power" . Maybe "market presence" would be a better term. Or maybe it be better if we consider ISP's and their users as a "market" and then try to figure out how to allocate the revenues. Prices are being fixed here but not just by one "monopolist." The government could fix prices using the "real consumer interest" as a benchmark or goal of simulating a competitive market.

Your right to say that we should want to see politicians who understand what the real consumer interests are. I should think that we should also want the FCC regulators also are looking to protect real consumer interests not imaginary ones. I don't see anything other than "net neutrality" as a policy of achieving this. I think "net neutrality" is the way of protecting the "real consumer interests" recognizing that the "market" is really a diversity of large and small actors in an artificial "market" of fixed prices which prevent anything resembling competitive prices from ever occurring.

Competition

Should CenturyLink be able to price internet services to disable its competition like Netflix for DirectTV satellite service?

I question whether Facebook

I question whether Facebook or Netflix have what is traditionally defined as "market power." "Market power" implies the power to control price. And that depends on what you define as the competition or the "market."

Netflix is involved in a lot of different markets. Netflix is growing where the other cable networks are struggling. If the ISP's do not not build out more, and if access policies remain in Netflix's favor, Netflix will become increasingly dominant. Maybe.

Sports programming has incredible power. Sports is all that's left of appointment programming. But even there, there are problems. The NFL had a difficult ratings year last year. Was that an outlier, or a sign of things to come? The league is slicing and dicing their audience, but I question whether that makes their audience bigger.

Where technology issues are concerned, I have a visceral negative reaction to anything that says "let's maintain the status quo". In technology the status quo is the thing that never lasts. I would suggest that allowing greater flexibility in pricing between the big dogs will increase the capacity of internet in both ways we can foresee and way we cannot imagine. It will give space to new companies to rise in competition to Netflix, just as creation of the internet itself provided an opportunity for Netflix to compete with conventional networks.

In political terms, this sort of bugs me. It's a complicated issue that people don't understand or resonate to except with emotionally laden catch phrases. I am a Democrat, and for Al Franken to be out front on an issue like this suggests that he is intellectually hamstrung by his old entertainment background. In Al's case, it doesn't make much difference because he isn't going anywhere, but it's a risky position for my party as a whole which looks and feels old, to take.