Net neutrality is the concept that all Internet traffic is created equal. In other words, an Internet provider like Verizon or Time Warner Cable cannot charge their customer based on what they browse. They cannot make using Google cost more than using Netflix. Until now, the only enforcement of this rule was done by the FCC, who set up directives forcing companies to follow net neutrality. But a US Court of Appeals just overruled the FCC, effectively killing net neutrality. Now Internet providers, including mobile phone data plans, can have different pricing plans based on what websites you want to visit. Unless Congress takes action to fix this, it is predicted to have massive consequences on the Internet’s economy, especially toward startups and small businesses. And of course, the consumers have the most to lose.
Net neutrality has been enforced by the FCC since 2010. Even back then, it was barely approved with a 3-2 vote by the heads of the FCC. The main argument for net neutrality is that it provides an equal playing field for the Internet’s competitors: websites. In other words, if a website wants to perform e-commerce, it does not have to make deals with Internet providers just so customers can access their site. Without net neutrality, providers could charge exorbitant fees, making fast Internet access only possible for large companies. Jennifer Fritzsche, an analyst at Wells Fargo in Chicago, said on the subject, “There’s definitely a risk that Netflix customers will have to pay more, though it will probably take at least a year for it to take effect.” [1]
Of course, every argument has two sides, and net neutrality is no exception. Internet providers have been arguing fiercely against net neutrality for a while. The idea is the laissez-faire model. Internet providers are running a business; why should the government be telling them how to run their own networks? “The ruling stands up for consumers and providers alike by keeping the government’s hands off the Internet,” said in an email statement from Republican representatives Fred Upton and Greg Walden. [2] Of course, the counter-argument to this is that most consumers are locked in to a single Internet provider. Companies like Verizon have a monopoly on Internet service in areas they are available. Only in select regions are consumers lucky enough to have the choice of two or three different providers. When a company has such a domination of the market, it is necessary for the government to step in and protect consumers.
In the court ruling, judges Laurence Silberman and Judith Rogers ruled that the FCC used pure speculation when determining the consequences of net neutrality. In the end, net neutrality was overturned because the court ruled the FCC simply did not have the power to make such a decision. It is yet to be seen whether the FCC will appeal the decision to the Supreme Court. Given the current state of the law, it is unlikely such an appeal will be heard. The only option is for Congress to step in and make new laws regarding the FCC’s powers and net neutrality. Only then will consumers be able to receive equal Internet service regardless of browsing habits.
[1] http://www.bloomberg.com/news/2014-01-14/verizon-victory-on-net-neutrality-rules-seen-as-loss-for-netflix.html
[2] http://www.bloomberg.com/news/2014-01-14/verizon-wins-net-neutrality-court-ruling-against-fcc.html
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