“Keep the Internet open”

An advocate for "net neutrality" responds to our Q&A with economist Everett Ehrlich.

Net neutrality advocates say the Internet needs fewer of these.
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Imagine you’re an entrepreneur who wants to launch a new website or service.  You know you’ll face the challenges of building a great site and attracting users.  But you also know that once you go live, your site or service becomes instantly available to Internet users everywhere.  New sites and services can catch fire fast, and your potential audience is huge.  It’s all up to Internet users – if they like what you’re offering, your future is bright.

Think how different this is from traditional media like, say, cable television.  If you want to launch a new cable TV channel, job number one is negotiating with cable companies to carry your channel.  They’re the ones you need to convince, and until they’re on board, you can’t appeal directly to users.  If their channel lineups are full, or if your idea is too “experimental” for them, tough luck.  There’s no such thing as instant access to cable subscribers everywhere – you must seek permission, company by company.

“The beneficiaries of [the Internet’s] openness are not just entrepreneurs, but Internet users everywhere. … Assuming the Internet’s open character continues, we’ll enjoy many innovations tomorrow that we can’t even imagine today.”
This difference is what makes the Internet uniquely open to innovation, competition, and speech. Entry barriers are low.  No one limits the number of “channels,” and no centralized operator or editor supervises the Internet’s content and services.  The beneficiaries of this openness are not just entrepreneurs, but Internet users everywhere.  Every day, we use and enjoy online services and content that have flourished as a result of this open environment.  Assuming the Internet’s open character continues, we’ll enjoy many innovations tomorrow that we can’t even imagine today.

But the future of the Internet’s open nature is not guaranteed.  Providers of Internet access services (Internet service providers or “ISPs”) aren’t always thrilled with the idea of offering an open platform for content or applications they don’t control. That’s why the Federal Communications Commission (FCC) concluded in 2010 that ISPs had an incentive to block or discriminate among Internet traffic.  To safeguard against this, the FCC adopted “Open Internet” rules, often referred to as “net neutrality” rules, requiring ISPs to transmit Internet traffic on a fundamentally evenhanded basis, rather than playing favorites.

This issue is back in play, however, thanks to a recent court decision that struck down the FCC’s rules despite also finding that the FCC had reasonably identified a risk to the Internet’s open character. The FCC Chairman now says he intends to reinstate some form of safeguards for Internet openness, while opponents of FCC action are pushing hard for the agency to just let the matter drop.

“[T]he entire point of an FCC rule on [net neutrality] would be to ensure that ISPs don’t … act… as de facto private regulators, picking winners and losers among online businesses and services.”
 Critics of open Internet rules like to paint with a broad brush, charging that any FCC action in this area amounts to “regulating the Internet.”  But Internet openness rules would apply only to companies that provide Internet access – that is, the providers of the Internet’s physical “on ramps.”  The vast universe of speech, commerce, and civic and social activity that rides on top of the Internet would remain just as unregulated as it has always been.  In fact, the entire point of an FCC rule on this topic would be to ensure that ISPs don’t constrain that activity by acting as de facto private regulators, picking winners and losers among online businesses and services.

Nor would open Internet rules need to interfere significantly with the conduct of ISPs.  Properly framed, rules would merely prevent ISPs from discarding open Internet access in favor of a more restricted, supervised offering – something that ISPs claim they have no intention of doing anyway and that federal policy has long discouraged.  Tellingly, after the FCC adopted its initial Open Internet rules in 2010, key ISPs such as AT&T and Comcast said they didn’t object.  The National Cable & Telecommunications Association (NCTA), said that the FCC action “largely codifies the broadband Internet access providers’ current conduct, which doesn’t change the economic status quo, whether in terms of investment or job creation.”

Opponents also charge that advocates of FCC action want to take broadband backwards by subjecting it to outdated telephone regulations.  But while the FCC might need to rely on some of the same legal provisions that traditionally governed telephone service, there’s no real prospect of imposing the full legacy telephone regime on ISPs.  A few basic concepts, such as nondiscrimination, are worth carrying forward.  Many others, such as price regulation, are not.  Protecting Internet openness does not require indiscriminate application of legacy telephone rules.

Finally, opponents often mischaracterize the debate as an effort by big websites to get their traffic carried on a subsidized basis.  In fact, there’s no free ride. Websites large and small pay for connectivity, with big sites paying more due to their higher capacity needs. No website gets to push traffic onto an ISP’s network unless that ISP’s paying customers have requested that website’s content.

“The real purpose of open Internet safeguards is to protect emerging innovators and competitors – so we all can enjoy the fruits of the profusion of innovation that results.”
If anything, Internet openness rules prevent subsidization, by ensuring that ISPs cannot demand to “take a cut” whenever some other company wants to do business with that ISP’s subscribers.  Allowing ISPs to run the equivalent of a protection racket, in which online businesses have to pay the ISP to avoid discriminatory traffic handling, would amount to forced subsidization of ISPs by the rest of the Internet economy.

But even more important, the real purpose of open Internet safeguards isn’t to protect large, established services like Google or Netflix.  If push came to shove, those companies have the leverage they need to strike deals with ISPs.  The real purpose of open Internet safeguards is to protect emerging innovators and competitors – so we all can enjoy the fruits of the profusion of innovation that results.

David Sohn is General Counsel of the Center for Democracy & Technology, based in Washington, D.C.

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