February 6, 2016 | by Wayne Smith

Net Neutrality in a Nutshell: Part II

Net neutrality advocates are typically comprised of Internet consumers, Internet software companies and service companies like Google and Microsoft and related industry associations. Opponents mainly consist of free market evangelists, large Internet infrastructure companies like Comcast Cable and the wireless carriers and their industry associations. That leaves the FCC trying to carve out a position as the referee.

Advocates of net neutrality have raised concerns about broadband providers’ ability to use their infrastructure to block Internet applications and content, websites, services, and protocols and even to block out competitors. Some proponents claim that telecom companies are trying to impose a multi-tier service model that will control the traffic and thereby remove competition, create managed scarcity, and force subscribers to buy their higher-priced services. Some argue the only way to guarantee against these abuses would be to regulate the ISPs as common carriers similar to the old wire line phone companies.

Opponents argue they need to be able to offer different services, service levels and be able to discriminate by price to meet market demands in order to generate the revenues and profits necessary to build and maintain innovative and technologically advanced network infrastructure. They continue to argue that free unregulated markets are the best way to create and maintain an innovative infrastructure utilizing the latest technologies available. In addition, they argue the Internet marketplace can be self-regulating and meet real customer demands, and that FCC regulation would only reduce market efficiencies, slow innovation, profitability and future infrastructure investment.

The debate between the advocates for and opponents against net neutrality boil down to two basic questions. Can the broadband and ISP players in the market be trusted to self-regulate themselves with the consumers’ best interest in mind? If not, can FCC regulation provide the consumer necessary protections and meet his needs while not stifling future investment and innovation in technology and infrastructure?

Where are we now?

As mentioned earlier, in 2005 the FCC issued its net neutrality principles. In 2010, it passed an order prohibiting ISPs from blocking traffic, but allowed “commercially reasonable” discrimination of traffic. Then in January 2014, U.S. District Court of Appeals ruled against the FCC in a case brought by Verizon, effectively striking down the agency’s net neutrality regulations. However, the court stated the FCC has legal authority to regulate broadband access but it failed to demonstrate its mandate to impose anti-discrimination rules. This left the door open for the FCC to make its current move to reclassify broadband and ISP services under Title II of the Communications Act of 1934.

It appears there will be several more years of legal, administrative and legislative positioning in store. This basically means the Internet will continue moving along about like it is today. But when that final decision arrives, it will be addressing that same old set of questions. In the end, it will have to make a choice between industry self-regulation or FCC regulation, or some combination of both. This will depend upon which way the wind is blowing on that future day.