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Future of Internet at Stake if FCC Abandons Net Neutrality

December 2017 Corporate

*This article was written before the ruling to lift regulation passed.

Shrouded by the daily news feed from the White House and State Department is another huge controversy brewing in Washington.

By the time you read this article, the Federal Communications Commission (FCC) will have voted on a FCC proposal to revoke “net neutrality” and stop regulating Internet service providers (ISPs), like landline phone companies such as AT&T and Verizon.   Because it has a Republican majority, the FCC is expected to revoke net neutrality. But the upcoming decision is only the first step in what is expected to erupt a storm of legal challenges.

Also called open Internet, net neutrality, according to the USA TODAY, is the principle that all legal content on the Internet is treated equally. “That is meant to foster creativity and innovation without the fear of Internet service providers throttling some content. As part of its NBC Universal acquisition in 2011, Comcast has agreed to comply with net neutrality and open Internet rules by not favoring NBC content over that of other video providers, such as YouTube.”

According to National Public Radio (NPR), “The Internet is often described as a highway. But for this debate, it might be best to compare the Internet to the railways of the 20th century. The federal government may provide the right of way, but like railroads, large chunks of the Internet are owned by private companies.”

Knowledge @Wharton, in its December 5, 2017, edition reports, “few issues in the technology world elicit such passionate – and at times angry – reactions set network neutrality, or the idea that Internet traffic must be treated reasonably equally.” Net neutrality also has major implications for e-commerce merchants as well as private and public organizations that market and communicate over the Internet.

Fast Lanes

The bottom line of what is at stake is that last January the U.S. Court of Appeals for the District of Columbia overturned much of the FCC‘s current body of rules. Many companies such as Google, Facebook and Twitter have raised the possibility that the FCC would let the ISPs charge “tolls” for “fast lanes.”  Such actions would allow the ISPs to discriminate against content from e-commerce businesses as well as other public and private firms that use their Websites to communicate and market to customers.  “If these reports are correct, this represents a threat to the Internet,” according to a letter written by more than 100 companies including Amazon and Microsoft

On the other side of the conflict are the ISPs who fear the FCC might write rules that would discriminate against companies who depend on the Internet for their marketing and sales.  Netflix, for example, has announced an agreement to pay Comcast to improve the quality and speed of its streaming of content to subscribers and therefore forming a “fast lane.”  The deep-pocketed video provider also has reportedly signed a similar deal with Verizon.  

Internet as a Public Utility?

As a result of its January ruling, the court said the FCC could regulate ISPs “common carriers.”   That would make them private companies that sell their services to all consumers without discrimination, like utilities, rather than tailoring their rates for different types of consumers.

When it crafted the open Internet rules in 2010, the FCC chose not to invoke this option — calling broadband “telecommunications services” under Title II of The Telecommunications Act — because it wanted to refrain from overly regulating the Internet. Chairman Tom Wheeler has said “I won’t hesitate to use Title II,” but says that another shot at rule making would be faster and avoid litigation.

PROs and CONs

According to Knowledge @ Wharton, supporters often link net neutrality to free speech and equal access to the internet. They also want stricter rules to curb the conduct of ISPs. “Removal of the net neutrality rules could entirely take down the internet as a free and open source of information,” said Jennifer Golbeck, a professor at the University of Maryland. “It’s going to be more corporate control over the content we see … potentially not just favoring things that benefit [ISPs] financially but favoring them politically.”

Critics, however, say that too much regulation dampens innovation.  It also jeopardizes significant investments in the Internet largely because of net neutrality rules.   

What complicates the net neutrality debate is lack of understanding around the issue. One big misconception by the public is that “the 2015 [Obama-era] rules were some kind of government regulation of the internet … that the internet wasn’t regulated and suddenly in 2015, the government imposed these regulations,” says Wharton Prof. of legal studies and business Ken Werbach. “The nuance gets lost. It is not [about whether] the Internet is neutral or not. Companies manage networks all the time, but there’s a cleaner difference between managing networks for legitimate purposes and deliberately discriminating in an excessive way.”

The major victims of changes in net neutrality will be the smaller users – Websites from public and private organization and e-commerce companies – who will fall victim to preferential treatment given to big Internet players who will pay extra for being prioritized.



About the author

James T. Berger, Managing Editor of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

James T. Berger
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