Net Neutrality is a bit like economics: it’s something that affects the core of how we interact with the world today but also seems incredibly dull and apparently irrelevant to the majority of people until something gets shaken up. And it just so happens that things were shaken up a couple of weeks back when Tom Wheeler the chairman for the Federal Communications Commission (FCC) in the US proposed changes to the future of regulation online. This is something that is being heavily lobbied and supported by Internet Service Providers (ISPs) whilst simultaneously being decried as a death knell for the internet as we know it by the companies of Silicon Valley and a huge amount of people online. Whilst this particular proposal only directly impacts the US, its effects would certainly be felt globally and on top of this there are forces at work attempting to impose similar regulation in Europe.
The FCC is suggesting the creation of a fast lane and slow lane internet, which would require companies whose websites and services wish to avail of faster speeds for the delivery of their content to pay the various internet providers a fee. It would primarily affect video streaming services and file sharing sites, so in essence charging the likes of Netflix, Google and Amazon more whilst simultaneously throttling file sharing and pirate sites. If the former grouping elected not to pay for the fast lane their customers could still receive their content but at an extremely diminished quality with slow buffer speeds giving them no option but to pay unless they want to lose their customer base. As for the file sharing and pirate sites it seems less likely that the ISPs would be willing to parlay with these pirates. This obviously leads to a sort of censorship as the ISPs would be choosing who and who can not use the fast lane. This is in effect handing power over censorship to these companies and Joe McNamee, Executive Director at the European Digital Rights Initiative (EDRI) states “(The fast lane) allows the telcos (ISPs) to pick winners and losers – and to turn winners into losers, if they so wish.”
Another issue with this is that it could and probably would prevent the next generation of startups, the next YouTube or Amazon, from getting a foothold in the market as they wouldn’t be able to afford to pay for the high fees that the faster lane would require, causing their content to render at a slower speed and lower quality than the already established companies in turn putting off potential customers. Karlin Lillington writing for the Irish Times opines “Smaller businesses will find it hard to compete to offer innovative net services if they have to pay more for data delivery.”
From a financial perspective the likes of Google, Netflix and Amazon and co have an obvious business incentive to not want to pay these ISPs these funds as it involves them paying more for what they already have. And of course the ISP companies obviously stand to gain more profit in the next few years by being paid more by these companies.
However McNamee explains they won’t fare so well in the long run “The large telcos have fought against every legislative measure that has, ultimately, proven to be of benefit to them. They fought against liberalisation, they fought against local loop unbundling. The argument in the last 15 years was always that regulation will undermine investment and predictability and the outcome has always been that regulation has always fostered competition, growing the market and boosting all participants. This discussion is so painfully similar to all of those other discussions… the only difference is that the telco lobby appears to be getting its message across better this time. If they succeed then history shows… history proves… that they will lose in the medium term, taking the rest of the online world down with them.”
As for how this would affect the ever hapless consumer? At first you probably wouldn’t see that much of a difference, but over time companies such as Netflix that will be paying this fee would start passing this cost onto the customer. Netflix have recently been slightly raising their prices and it is quite probable that the reason for this increased cost is that they are already paying Comcast and Verizon (Two companies occupying the bottom of the Consumer Satisfaction Index in the US) to not “throttle” their streams, a factor which McNamee says has “weakened, but not compromised” the cause of those against a fast lane. On top of this further down the line this will impact us everyday denizens of the internet in that there will be less innovative projects that take off, as compromising net neutrality would be, according to McNamee, “removing the social heart and economic brain of the internet.”
If this proposal was approved in the US, and similar motions were kept suppressed this side of the Atlantic, it’d be a golden opportunity for European startups to flourish beyond the level of their US counterparts. If it were to throw away such a chance McNamee notes that “Europe would be malfunctioning quite seriously if this happened. After all, the history of the internet so far has consisted of US startups benefiting from their domestic open single market and, having grown enough to cope with European fragmentation, they have expanded into European markets. If US legislators are now short-sighted enough to allow telcos to level the playing field to the detriment of US start-ups, it would be just bonkers for the EU to voluntarily give up this gift.”
Of course there are a lot of ‘what ifs’ and nothing is decided for certain on either side of the pond as of yet, but I expect the existence of net neutrality will be fragile at best for the foreseeable future despite the overwhelming evidence of its benefits. The FCC proposal is open to comments from US citizens until mid July and a decision will be reached two months after that. For those in Europe, McNamee suggests that they “Go to the wepromise.eu website, sign up and ask candidates in the EU elections to sign up also.”* Given the strong reactions to SOPA a couple of years back and the already vocal response to the FCC proposal in the US, we can hope that these forms of regulation or censorship of the online world we reside in won’t make it beyond this point.
*Joe McNamee was interviewed prior to the election taking place, however the website and charter will still be relevant for elected candidates.
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