On Feb. 22nd, the Federal Communications Commission (FCC) published a new rule overturning net neutrality. Aptly named the “Restoring Internet Freedom” order, it directly repealed the previous “Open Internet Order” put in place in 2015 raising alarm bells all across the country. Reactions ranged from heralding the coming of Doomsday for the internet to celebration over the “freeing” of the internet from overregulation by the government. Although a litany of states have filed suit against the FCC, challenging the rule under the APA’s arbitrary and capricious standards, and a number of states have sought to introduce state-level net neutrality protections through legislation, the end of net neutrality as we know it is in the books for the foreseeable future. But is it really all doom and gloom as the tech world suggests? There are a glut of articles lamenting the fall of net neutrality, but few that consider the potential advantages a more deregulated market may bring to broadband consumers and/or content providers. This blog post will seek to briefly recap what broadband services looked like before Tom Wheeler’s “open internet,” the hypocritical embrace of “Zero-rating” during the age of net neutrality, as well consider what upsides may potentially exist under Ajit Pai’s “restored free internet.”
Life before the “Open Internet Order”
At the core of the 2015 Open Internet Order was a ban on blocking, throttling, and prioritization of content and reclassifying broadband service from an “information service,” to an “telecommunication service,” subject to Title II regulation by the FCC as a common carrier. The obvious question that comes to mind then is, does that mean prior to 2015 internet services providers (ISPs) could block, throttle or prioritize content? The short answer is “Yes,” and the most infamous case is that of Comcast’s secret throttling of peer-to-peer sharing (i.e. Bittorrent). The FCC brought action against Comcast but ultimately lost in the 9th circuit in 2010, and lost again in 2014 to Verizon when they attempted to enforce new regulations meant to prevent throttling and blocking. One of the things that few proponents of net neutrality would like to admit is that before 2015, net neutrality was not, and never had been, the de-facto rule. The courts had largely sided against FCC regulation, holding that FCC did not have the statutory authority to regulate ISPs. So at the very least, a repeal of the open internet order would merely be a return to the state of affairs 4 years ago, hardly the end of days.
The Hypocrisy of Zero-Rating and Net Neutrality
The idea of net neutrality at its heart simply means treating all data equally without discrimination. While there are numerous positives associated with net neutrality such as freedom of speech, equal access, and leveling the playing field for startups, there seems to be an incorrect underlying belief that discrimination cannot possibly be beneficial to consumers. Zero-rating programs are essentially “sponsored data plans” that exempt access to certain services and websites from counting against your data cap in data plans. Popular programs includes T-Mobile’s “Binge On” and Verizon’s Fios Mobile App which allow for video and music streaming from counting against your monthly data cap. There is a strong argument that these zero-rating programs go against the central tenet of net neutrality by providing preferential treatment to certain content, but the popularity of these programs prompted even the FCC to step back, likely fearing consumer anger. As such, once can argue that in certain situations preferential treatment can still benefit consumers and that complete net neutrality might reduce some benefits that might be afforded to consumers.
Best Case Scenario of a “Free Internet”
Proponents of net neutrality have long feared the potential for abuse that an unregulated market would allow, such as charging consumers for access to Facebook or Netflix or allowing for the creation of monopolies by blocking content providers who are unwilling to pay extra. So what is the best case scenario of the reality we’re facing post net neutrality? Proponents of the repeal have long argued that with deregulation, the free market competition will lead to benefits to consumers because ISPs will compete to offer better incentives and innovative services like zero-rating will become more commonplace. A market with increased competition may allow for newcomers to provide benefits and services that established players refuse to offer (e.g. T-Mobile’s disruption of the mobile service industry), driving down prices and increasing options available to consumers. Allowing ISPs to discriminate means that we can have dedicated “fast lanes” to reserve bandwidth telemedicine or other emergency healthcare services. Additionally, allowing ISPs to discriminate incoming/outgoing traffic might also provide cybersecurity benefits by allowing ISPs to control the flow of traffic during distributed denial of services (DDoS) attacks. Do the potential upsides outweigh the downsides? Only time will tell, but the answer may largely depend on how much faith you have in the free market…
Sam Lee is a J.D. candidate, 2019, at NYU School of Law.