Abstract

[Net Neutrality] can often be a two-sided coin. If we let the current status-quo of a neutral [Internet] continue, the internet could become so busy and unusable at some point that it wouldn't be worth logging online anymore. And while a non neutral Internet may help those who are a new business start up with some relaxed rates for its first year or assist a successful business incumbent in accessing necessary data faster at higher rates than individual users can afford, the individual user may still lose out in the end if ISPs are charging access fees for available data.

Problems, Pending Initiatives, and Arguments

Net neutrality ensures that internet users have access to online content without interference from [Internet Service Provider]s. The current status-quo of Internet Neutrality keeps the internet “open” to all available individual speech and blogs; Even the largest corporation out there uses a neutral internet. However, some Internet Service Providers would like to charge certain companies or individuals different rates for preferential services by way of faster internet speeds. For example, “[Verizon] and [AT&T] now want to "manage" the Internet by controlling the speed of websites and services and steering consumers to preferred areas online. They also want to set up “toll booths” turning the Internet into a [pay-for-play media] that destroys its egalitarian spirit of competition and free speech. There is a huge debate going on now as to whether or not this should be allowed”(Ammori, 2009).

“Popular online content providers such as [Google], [Yahoo!], and [Microsoft] would like to maintain the status-quo, which they claim would preserve the egalitarian philosophy on which the Internet was founded” (Cheng et al, p. 1, 2008). New internet start-up companies find this equality necessary also because they cannot afford extravagant fees for Internet content as easily as the incumbent companies can. Allowing service providers such as [Comcast] or AT&T to control the flow of information online, is akin to giving them a type of control stronger than government.

Under a non-neutral policy where telecommunications giants rule the web, Americans would find censorship, not unlike Google's hypocritical stance in China. Google recently promised to stop censoring results on [China.cn], but evidence shows they may even be censoring MORE. For example, “Searches done on ten “sensitive” keywords in the Mandarin language on Google.cn, the company’s Chinese search site, yielded 52% fewer results than searches for the same keywords on the uncensored, English-language site, the analysts said in a research report on March 5. That confirms the censors are still in effect. And there may actually be a higher level of filtering on Google.cn now than there was in January, when [Piper Jaffray] found 40% fewer search results on the censored search engine for the same ten keywords” (Cleland, 2010).

The Internet service providers have argued that they have put their resources to maintain and upgrade the physical infrastructure to provide the services to consumers, while the popular web sites have thus far gotten a “free ride” on their resources (Waldmeir, 2006), and that the “Internet service providers should be allowed to strike deals to give certain Web sites or services priority in reaching computer users” (Krim, 2005).

Main Arguments of [http://www.publicknowledge.org/issues/network-neutrality|Public Knowledge] vs. [http://www.itif.org/|Information Technology and Innovation Foundation]

Public Knowledge

Public Knowledge supports enforceable Net Neutrality regulation and a neutral Internet where network operators may offer different levels of access at higher rates as long as that tier is offered on a nondiscriminatory basis to every other provider. Public Knowledge does not want to require confusing rules that force operators to obtain government pre-approval, either.

In early 2010, Public Knowledge was represented at a hearing before the [Federal Communications Commission]. Public Knowledge does want rules and regulation on the web but NOT from content providers. “The Commission should narrow the definition of “reasonable network management” to its technical origins, and recognize that “managed services” are not Internet services. Adoption of these modifications, among others, would result in final rules more readily suited to preserving the open Internet while promoting network owners’ flexibility to manage their networks in a reasonable and nondiscriminatory manner” (Black, Petricone, Shapiro, Siy, & von Lohmann, 2010).

ITIF

The Information Technology & Innovation Foundation has a similar stance to Public Knowledge in that they believe that some types of regulation are necessary to allow the internet to be used to its full potential. However, they also believe that while new innovations and technologies can be stilted by too much governance, these new technologies will not likely come to fruition without some regulations. ITIF believes that differentiated pricing for differentiated services will increase their utility; mandating a single service level for all Internet access ignores the diverse needs of applications and reduces utility. On the contrary, Public Knowledge supports a neutral Internet where minimum service is provided to all broadband subscribers but does not believe in a “Private Internet” where a network operator allocates higher bandwidth to certain services determined by the network operators. What should the Congress/FCC do?

“In order to ensure that broadband providers do not abuse their market power, Congress should charge the FCC with the responsibility of overseeing the use of discriminatory access arrangements to make sure that any such arrangements do not harm competition (and consumers)” (Atkinson, & Weiser, p. 2, 2006). Congress can provide financial incentives to companies investing in broadband networks (for example, allowing first-year expensing of broadband investments and exempting broadband services from federal, state, and local taxation), but only if broadband providers provide a best-efforts, open Internet data pipe to their customers with average speeds at least as fast as the evolving FCC definition. Allowing new start-ups some discounting or tax exempt services for a period of time will help those who are struggling to turn a profit because they are so new to business. This, in turn, will create new innovation opportunities for small businesses who may not be able to afford these services at all if the Internet becomes regulated.

If the current status-quo of Network Neutrality is abolished and providers become able to charge access fees, a complaint system for consumers, as well as full disclosure to the FCC by content providers would be a step in the right direction. “Meaningful enforcement of open Internet rules requires an effective enforcement mechanism. The existing common carrier complaint process does not provide a useful model for such a process” (Black, Petricone, Shapiro, Siy, & von Lohmann, 2010.

Cost-Benefit Analysis

“Without net neutrality rules, new technologies could lead to pricing practices that transfer wealth from content providers to ISPs," warns the [http://www.policyintegrity.org/|Institute for Policy Integrity], "a form of price discrimination that would reduce the return on investment for Internet content—meaning website owners, bloggers, newspapers, and businesses would have less incentive to expand their sites and applications.” (Lasar, 2010). The internet is a generator of much free content—video games, blogs, information.

Once you have your basic internet subscription and a device to access service, everything else is free. The Internet service providers of all of the free and entertaining content recoup nothing for providing access to all of the fun. Without net neutrality, ISPs could charge content providers again when users access content. Adding these fees would increase the costs of creating websites and applications. As mentioned earlier, smaller websites might not be able to afford the fees leading them to close up shop. Adding faster speeds and selling them as “enhanced services” could very well cost the Internet economy too much to be worth their while if too many businesses decide it's just not worth the entrance price.

The [network effect] plays a huge role in the Internet's worth to the public. “The value of the Internet increases to each user as more users log on. This happens in part because Internet users are also content creators. As the number of users increase, the websites become more valuable to each one. As networks expand, this feedback loop reinforces growth; the same feedback system could work in reverse. Imagine if there were fewer buyers and sellers on eBay: it would not be as effective for either group.” (Lasar, 2010). This is how the costs of deregulation can outweigh the benefits.

My Suggestions

Net Neutrality principles are noble, but may not be practical in a rapidly changing world of technology innovation and consumer interests. For example, as more and more people log onto the internet in the future, a neutral internet could eventually slow down everyone's online process. Creating a larger [internet infrastructure] may be a good long-term goal, but funding [Fiber-to-the-home technology] to do this is very expensive right now. Competition in the marketplace should be encouraged, especially when the costs and barriers to entry are high, so some differentiation fees and tax breaks may be helpful to new start-ups.

Summary

It is difficult to gauge what the outcome of the Net Neutrality debate will be as negotiations are in process at this very point in time. Since there are benefits and drawbacks to both sides of the debate, a wait-and-see approach would probably work best, however, if we wait too long, the Internet could become an even scarier Wild West than it already is!

Bibliography

Ammori, M. (November 24, 2009). Net neutrality at home is key to promoting democracy abroad, say white house, state department. Retrieved from http://www.huffingtonpost.com/marvin-ammori/net-neutrality-at-home-is_b_369587.html

Atkinson, R, & Weiser, P. (2006). A Third way on network neutrality. The New Atlantis, 2(13), 47-60

Black, E., Petricone, M., Shapiro, G., Siy, S., & von Lohmann, F. (January, 14 2010). Joint comments of computer and communications industry association, consumer electronics association, electronic frontier foundation, home recording rights coalition, netcoalition, and public knowledge on the matter of copyright infringement in the open internet rules.

Cheng, H., Bandyopadhyay, S., Guo, H. (June 25, 2008). The debate on net neutrality: A policy perspective. Information Systems Research, Forthcoming. Available at SSRN: http://ssrn.com/abstract=959944

Cleland, S. (March 8, 2010). Has Google increased its china censorship? doesn't that violate the internet's first amendment?. Retrieved from http://precursorblog.com/content/has-google-increased-its-china-censorship-doesnt-violate-internets-first-amendment

Cyril, M., Kelsey, J., Schwartzman, A., Wood, M., Feld, H., Siy, S. (January 14, 2010) Before the federal communications commission: Comments of public interest commentors

Krim, J. (December 1, 2005). Executive wants to charge for web speed. Washington Post, D05.

Lasar, M. (January 11, 2010). Cost-benefit analysis: net neutrality makes economic sense. Retrieved from http://arstechnica.com/tech-policy/news/2010/01/new-study-no-net-neutrality-means-weaker-internet-economy.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss

Waldmeir, P. (March 23, 2006). The Net neutrality dogfight that is shaking up cyberspace. Financial Times, B12.

Preserving the Open Internet (essay)