What’s going on? Net Neutrality explained simply

Been hearing the term “net neutrality” recently, but not entirely sure you know what is going on? Don’t worry, we explain this controversial subject clearly and simply.

Bear with us. We’ll make it as brief as we can, but there is plenty to take into consideration.

Quickly, what is an Internet Service Provider (ISP)?

Really quickly, let’s preface this with what an ISP is. Feel free to skip if you know already. It’s your gateway to the Internet. You need to connect to your ISP first to then connect to the Internet. Your ISP provides the hardware that allows you access to cyberspace. All data between you and the Internet goes via your ISP. As such, you pay your ISP a monthly or yearly cost for the privilege.

Popular ISP’s in the US include Verizon and Comcast. In the UK it can be BT, Sky or Virgin Media.

What is net neutrality?

Net neutrality is the principle that all websites and services on the Internet are treated as equal by your Internet Service Provider (ISP). That means your ISP cannot favour one website to another, either in terms of the speed in which you’re allowed to connect to the website, or the cost of visiting or using the website. (Of course the website itself can choose to charge you for its service, which is a different matter entirely and not related to net neutrality.)

For example, that means your ISP cannot charge you to visit the Netflix website, nor can they charge Netflix.

It also means that ISP’s cannot themselves choose to block certain websites or services.

So providing you pay your monthly or yearly Internet costs, every website you connect to is handled by your ISP in the exact same way.

In 2015, under President Obama’s term, a set regulations enforcing this principle were put into place, ensuring that ISP’s had to play by these rules.

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So what’s just happened?

The FCC, who are (or were) in charge of governing the US ISP’s has just voted to repeal those 2015 net neutrality regulations. The FCC – which is comprised of 5 members, 3 republicans and 2 democrats – voted 3-2 in favour of the repeal. The 3 republican members voted to repeal, while the 2 democrats voted to protect the regulations. This is what was expected, as the majority of republicans were in support of the repeal and the democrats were generally against the repeal. Basically, each member voted along party lines.

(Point of note: When the FCC delivered their verdict, the room was briefly evacuated over a “security concern”.)

Anything else?

The FCC didn’t just repeal the 2015 Obama-era regulations. They also effectively stood down from regulating ISP’s altogether. The statement from the FCC chairman Ajit Pai stated that the FTC would take control of governing the practises of ISPs in the US. However the FTC is seen as less proactive entity with less authority than the FCC. In fact there are currently legal cases that assert the FTC are not legally empowered to compel ISPs to do anything, meaning ISPs would effectively become unregulated.

So what does this mean?

That, ladies and gentleman, is the million dollar question. At this stage, there is no easy answer.

Theoretically, the worst case scenario for the general consumer is this; the repeal hands ISPs a lot more control over what they can do and how they do it. As such, ISPs can now theoretically treat different websites, well, differently. That means an ISP could now charge their customers extra to visit different websites, or at least prioritize speed to different websites so they load faster.

Think of it like a cable TV package. You can pay for a certain number of TV stations, and you can pay more to reach more TV stations like a sports package gets you extra sports stations. ISP’s could now do something similar, like charging for a “basic” Internet package, while providing an alternative and more expensive package to reach – for example – video services like YouTube or Netflix – for those customers willing to pay more. Those customers on the “basic” package would simply be blocked from visiting those video websites.

Alternatively, the ISP could instead charge the websites more instead. So instead of charging the customer more to reach Netflix, they could charge Netflix a fee to allow customers of the ISP to reach them. Or they could do both.

There are a lot of different business models the ISP can mull over. And if an ISP does decide to go down that route, one thing is for certain; they stand to make a lot more money, at the expense of the consumer, the websites or both.

Of course, the ISP’s may do nothing and change nothing. In which case, nothing changes!

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What are the arguments for and against net neutrality?

Support for net neutrality is widespread, with lots of support from the public, technology firms and even many republicans in Congress. Supporters of net neutrality argue that repealing the 2015 regulations will allow ISPs to exploit customers and websites in the way we mentioned above, by allowing them to charge customers extra to visit certain websites, or to completely block websites such as those competing with the ISPs services.

There is also an argument that if ISPs do charge websites to prioritize traffic to their services, then smaller websites or services will be put at an unfair disadvantage as they will not be able to pay those costs, while large corporations that can pay will see less competition as smaller competitors fold. This may result in an anti-competitive environment, which would lead to higher costs for services and less motivation to improve existing products. Essentially, the Internet would no longer be a level playing field, and would become further dominated by those who can afford to “pay to play”.

Additionally, if ISPs do go down the route of charging websites to prioritize their services, it is likely that the consumer will have to pay extra for those services to offset the additional cost put onto the website. So not only could a customer potentially wind up paying their ISP more to reach a website like Netflix, Netflix may be forced to raise their prices because of the additional levy put onto them. And this is one way this decision to repeal net neutrality regulations could affect people in other countries as well.

But what do opponents of the net neutrality regulations argue?

Firstly, the traditional argument against what is deemed as “excessive” regulation is that it forces companies to comply with strict rules that will ultimately prevent innovation, growth and subsequently investment. The argument here is that ISPs should have freedom to market their services without government oversight and intervention, and that government intervention could even have potentially harmful consequences on an industry that spread and flourished without the need for it.

The main argument, however, is that the 2015 net neutrality regulations are pointless. They were, after all, only implemented in 2015 and opponents of the regulations argue that the Internet was doing fine before them. This argument claims that prior to the regulations, consumers were not complaining that their Internet services were blocking or prioritising web services, but that there was not enough investment in ISPs that resulted in no access in certain (rural) areas or a lack of competition, which ties into the first argument. The FCC chairman said in a statement –

Not only was there no problem, this “solution” [2015 regulations] hasn’t worked. The main complaint consumers have about the Internet is not and has never been that their Internet service provider is blocking access to content. It’s that they don’t have access at all or enough competition.

Back to pro net neutrality arguments…

Again, however, supporters of net neutrality argue that even if ISPs did make more money with more “innovative” business models, with little or no regulation, there would be no guarantee that this extra money would be invested back into their services, instead going to shareholders or CEO salaries. As such, a degree of this argument boils down to trust. Or lack of it.

Additionally, pro net neutrality supporters argue that this is the first time in over a decade that the FCC (and indeed the White House) has opposed net neutrality, and that fact – combined with the less ‘authoritive’ FTC replacing the FCC as the regulator – may result in ISPs being spurred into testing the waters with a much more controlling and financially lucrative way of doing business.

But no one really knows

The bottom line is that no one really knows what is going to happen. ISPs may not venture down that route at all deeming it too risky, or somehow the FTC may be able to regulate them effectively. Or there’s still a chance the FCC repeal could be overturned. What we do know is that ISPs have just become a whole lot less regulated, and that makes the future for US Internet access a lot more unpredictable.