Skip to content

“Net Neutrality” Isn’t So Neutral–Nor So Good

“Net Neutrality” Isn’t So Neutral–Nor So Good published on No Comments on “Net Neutrality” Isn’t So Neutral–Nor So Good

The Federal Communications Commission lit up social media by formally announcing plans to roll back regulations imposed by the Obama administration that treat internet service providers (ISPs)–companies such as Comcast, AT&T, Verizon, or my beloved-be-damned Mediacom–like traditional utilities. Part of this roll back includes rules about net neutrality, which forbid ISPs from treating packets of data differently depending on who sent them or what they contain.

If you believe critics of this decision (such as here and here), the Internet is about to fall apart and all the things you love, from cute cat videos to online shopping to the latest streaming series sensation, will no longer be delivered to your desktop or mobile device. Instead, ISPs would control everything you’re allowed to say, do and view on the Internet, and they would thwart all innovation and potential disruptive technologies.

Never mind that the Obama-era regulation wiped out consumer protections that the Federal Trade Commission had developed, leaving Internet consumers in a privacy protection wasteland. And never mind that the regulation traded a vague threat of control by private companies for a very tangible control by government. The reality is that “net neutrality” itself threatens innovation and the development of disruptive technologies.

The concept of net neutrality is nothing new and isn’t unique to the Internet. Consider your local road system. The roads are the “pipes” of the Internet. Packets of data (cars and trucks) use the pipes to go here and there. Different packets carry different kinds of data–semis full of food, semis full of hazardous materials, city buses, and lots of personal vehicles whether with single passengers or multiple. Some of these packets are very big, take up a lot of space, and tend to bog things down in traffic. And especially at peak times of day, when there are thousands of different ‘packets’trying to get here and there, the system gets very congested and everything slooowwsss dddoooowwwwnnnn. Don’t you just hate that?

In order to alleviate congestion, many transportation authorities (the ISPs of the highways) restrict use of certain lanes to certain kinds of vehicles: “No Trucks in the Left Lane”, high-occupancy vehicle (HOV) lanes, and even toll roads that charge different fees for different size vehicles reflecting the different costs they impose on the system.

Why do we allow transportation authorities to discriminate on who gets to drive where and how much they have to pay to use the road? Simple. We understand the congestion problem. We understand that having lots of individual cars with only one passenger contributes more to the congestion than a car (or bus) with many passengers, so we reward  HOVs by giving them a lane with less congestion so they can get to their destination more quickly. We understand that bigger vehicles impose higher costs on the system. We also know they value using the roads more than smaller, especially personal, vehicles, because they typically are carrying products to market that consumers value. Not surprisingly, trucking companies tend to dislike higher toll fees because it increases their cost of business. They’d much rather have other vehicles–and even people who don’t drive on the roads–pay for the infrastructure instead.

Proponents of net neutrality on the Internet–particularly streaming companies like Netflix, Hulu, or Sling–are basically like truck companies. These companies stream huge packets of data, taking up tons of bandwidth. If you have a cap on your data plan, you know how quickly you can reach your limit if you stream a lot of television through one of these services. Likewise, you know how frustrating it is when the pipes are so full of packets of all sorts that you get a lot of buffering or reduced image quality or the interminable little whirling circle that your download is still in progress.

With net neutrality, ISPs cannot charge more for “big trucks” and they can’t set up dedicated lanes for high-value traffic. They’re forced to make everyone stay on the same road, at the same speed, and deal with the congestion. Not only do they have less incentive to invest in the infrastructure since they can’t charge more for it, they also have fewer resources to do it since they can’t collect more money from the higher-value users.

As consumers of the Internet, the problems of net neutrality are less immediately obvious than our experiences with traffic on the highway. However, the nature of the problem is the same. We understand why ‘net neutrality’ on the highway is not the best policy. And the same applies to the Internet.

 

We're From The FCC and We're Here To Help

We're From The FCC and We're Here To Help published on

“We’re from the government, and we’re here to help.” Yeah, you know that punchline, right?

I saw a report from NPR that FCC Chairman Tom Wheeler had decided to do just that in the dispute between Dish Network and Sinclair Broadcasting. As reported in the Wall Street Journal yesterday, Dish blacked out some 150 local stations owned or operated by Sinclair as a result of their ongoing distribution contract renegotiation dispute. The blackout affects some 5 million consumers in 79 markets.

Enter Chairman Wheeler to the rescue. Per the NPR article,Wheeler stated “We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming.”

Just one problem: Consumers are not being denied access to local stations–particularly to local news, weather and information on their local NBC, ABC, CBS and Fox affiliates. These affiliates are required–by the FCC–to provide free digital broadcasts, meaning consumers are perfectly able to access these stations for relatively modest investments in a digital antenna for their television. Moreover, in most markets Dish is not the sole distributor of paid-access television, meaning consumers also have the option of switching to a different television service provider. Indeed, as reported by both NPR and the WSJ, Dish is already hemorrhaging subscribers in large part due to service interruptions that have come to characterize Dish’s negotiating tactics with local station owners. And no doubt Dish has taken that into account in their negotiation strategy with Sinclair.

Where the FCC should act is in clarifying its rules regarding negotiation rights and station ownership. Two weeks before the blackout, Dish filed a complaint with the FCC regarding Sinclair’s negotiating tactics–which revolve in part around whether Sinclair was the property rights to negotiate on behalf of several stations it operates, but does not own. The FCC issued a rule forbidding such negotiations, but Sinclair alleges their operating agreements were grandfathered in. If the FCC were more clear in its rules and interpretations, perhaps the contracting dispute would have resolved itself already without the need for Chairman Wheeler to mount his white horse and ride to the rescue.

Primary Sidebar