CURATED BY Timothy B. Lee
2014-11-11 08:59:58 -0500
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Consumers generally connect to the internet one of two ways. They can subscribe to a residential broadband service from a company such as Time Warner Cable. Or they can subscribe to wireless internet access from companies such as Sprint.
These companies have spent billions of dollars laying cables in the ground (in the case of residential internet access) or erecting cell phone towers (for wireless access) to ensure that customers have fast, reliable service.
Network neutrality is the idea that these companies should treat all internet traffic equally. It says your ISP shouldn’t be allowed to block or degrade access to certain websites or services, nor should it be allowed to set aside a "fast lane" that allows content favored by the ISP to load more quickly than the rest.
Since the term was coined more than a decade ago, it has been at the center of the debate over internet regulation. Congress, the Federal Communications Commission(FCC), and the courts have all debated whether and how to protect network neutrality.
Advocates argue that network neutrality lowers barriers to entry online, allowing entrepreneurs to create new companies like Google, Facebook, and Dropbox. But critics warn that regulating the broadband market could be counterproductive, discouraging investment in internet infrastructure and limiting the flexibility of ISPs themselves to innovate.
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The term network neutrality was coined in 2002 by Tim Wu, who is now a law professor at Columbia University. In a 2003 paper explaining the concept, Wu argued for a non-discrimination rule that would ensure a level playing field among Internet applications.
Wu began writing about network neutrality in the middle of a legal fight over Federal Communications Commission regulations to promote an open Internet by requiring incumbent broadband providers to share their lines with competitors. When a 2005 Supreme Court decision triggered the end of those regulations, Wu’s concept of net neutrality became a rallying cry for advocates of an open Internet. It has been at the center of Internet policy debates ever since.
While the term network neutrality is barely a decade old, it is closely related to the much older concept of common carriage. Since at least the 19th Century, the law has required companies that provide basic infrastructure — including railroads, telegraphs, telephones, and electric power — to operate as common carriers. That means they must offer service to everyone at standard prices. Network neutrality essentially applies the concept of common carriage to the Internet.
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When Mark Zuckerberg created Facebook in his Harvard dorm room, he didn’t need to ask Comcast, Verizon, or other internet service providers to add Facebook to their networks. He also didn’t have to pay these companies extra fees to ensure that Facebook would work as well as the websites of established companies. Instead, as soon as he created the Facebook website, it was automatically available from any internet-connected computer in the world.
That’s network neutrality.
Advocates say it’s a big reason there has been so much innovation on the internet over the last two decades. Network neutrality keeps the barriers to entry for new websites and internet applications low. That freedom has allowed the creation of dozens of innovative online services such as Google, Twitter, Netflix, Amazon.com, Skype, and more.
Advocates worry that without net neutrality, the internet would become less hospitable to new companies and innovative ideas. For example, if large ISPs began requiring video-streaming sites to pay extra to deliver video content to their customers, the expense and hassle of negotiating deals with dozens of network owners could make it difficult for the next YouTube to get traction.
There is an even greater — potentially debilitating — concern for some advocates: incumbent broadband providers could deliberately hobble new services that represent a competitive threat to incumbent services. For example, telephone companies might be tempted to interfere with internet telephony products such as Skype that compete with traditional phone service. Or cable companies might want to slow down services such as Netflix that compete with their paid television service.
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People disagree about whether or not regulation is needed.
Opponents of regulation argue that if network neutrality is really good for consumers, market forces will cause ISPs to protect it. It’s good for ISPs' bottom lines to make their services more valuable to consumers, since that lets them charge more. So if network neutrality promotes innovation, the argument goes, ISPs will keep their networks open to make sure their customers have access to the latest online content and services.
But many network neutrality advocates disagree. They note that most households have no more than two options for residential service, which leaves consumers with few alternatives if they're dissatisfied with their current provider. And many ISPs have conflicts of interest that could lead them to impose restrictions that are bad for their customers but good for the ISPs' own bottom lines.
For example, right now a majority of residential broadband connections are provided by cable industry incumbents such as Comcast and Time Warner Cable. These same providers are also major providers of paid television service. These firms might be tempted to block or degrade the quality of online video services such as Netflix or Hulu to prevent those sites from undercutting demand for their own paid television products. Indeed, Comcast and Netflix have repeatedly butted heads over the quality of Netflix service on Comcast’s network.
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Critics of network neutrality argue that requiring networks to treat all traffic the same could discourage beneficial innovation by network owners. For example, some applications (such as voice calling and online games) are particularly sensitive to delays in packet delivery. Internet users might benefit if they could pay a premium to ensure that these applications are given priority. But strict network neutrality rules could bar ISPs from experimenting with this kind of service.
Network neutrality opponents also worry that regulations could discourage investment in network infrastructure. In some parts of the country, companies such as Verizon and Google have built new fiber optic networks that allow speeds as high as 1 gigabit per second — 100 times faster than typical networks today. But these networks can cost billions of dollars to build, so many parts of the country haven't gotten them yet. If network neutrality rules make networks less profitable, that could slow the pace of investment.
Finally, network neutrality opponents believe that it will be too difficult to craft clear and effective network neutrality rules. The internet is complex and changes quickly. Skeptics worry that regulations could become obsolete almost as soon as they are established. That could create a lot of work for lawyers without actually preserving internet openness.
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The Federal Communications Commission has been trying to promote open networks since long before the term network neutrality was coined . In the 1970s and 1980s, the agency regulated incumbent phone companies to prevent them from undermining competition in the fledgling computer networking market. One key regulation guaranteed consumers the right to use modems on their phone lines, promoting the development of dial-up internet service.
After Congress overhauled telecommunications law in 1996, the Clinton-era FCC required incumbent phone companies to share their lines with competitors who wanted to provide DSL service. The agency hoped to foster a competitive market for high-speed internet access.
But a Supreme Court ruling allowed the Bush administration to abandon that approach in 2005. Needing a new strategy, many supporters of an open internet started lobbying for network neutrality regulations.
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No, the internet is not a big truck. It's a series of tubes.
At least that was the view of the late Sen. Ted Stevens (R-AK), who elaborated on the distinction during a pivotal 2006 Senate hearing on network neutrality.
"I just the other day got internet that was sent by my staff at 10 o'clock in the morning on Friday. I got it yesterday. Why? Because it got tangled up with all these things going on the internet commercially," Stevens said.
"The internet is not something that you just dump something on. It's not a big truck. It's a series of tubes. And if you don't understand those tubes can be filled and if they're filled, when you put your message in it gets in line, it's going to be delayed by anyone who puts into that tube enormous amounts of material."
Stevens mangled some of the technical details, but he was actually articulating a key argument of network neutrality opponents: that regulations could permit high-bandwidth applications like streaming video to overload the internet's infrastructure.
Yet the internet has turned out to be something like a "big truck" after all. Today, Netflix and YouTube send "enormous amounts of material" over the internet: they account for half of all traffic. And the network seems to be coping with this just fine.
In any event, Congress did not pass network neutrality legislation that year, despite the efforts of open internet activists.
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Barack Obama campaigned for president as a supporter of network neutrality in 2008. When he took office, he named Julius Genachowski chair of the Federal Communications Commission. In 2010, Genachowski announced regulations that prohibited ISPs from blocking online content, prohibited "unreasonable" discrimination, and required ISPs to be more transparent about their policies.
Verizon challenged these rules in court, arguing that the rules went beyond the powers Congress had granted to the agency. The DC Circuit Appeals Court agreed with Verizon in early 2014 and struck down the rules.
By this point, the FCC had a new chairman, Tom Wheeler. Like his predecessor, Wheeler wanted regulations that would protect network neutrality. But the DC Circuit's ruling for Verizon constrained his ability to do so. So in May, the FCC unveiled a new set of rules that allow ISPs to give some content priority over others if doing so is "commercially reasonable."
Since May, the FCC has been gathering public comments on the proposal. And those comments have been overwhelmingly negative. Most network neutrality supporters believe that allowing "commercially reasonable" discrimination will become a giant loophole that allows incumbent broadband providers to undermine the open internet.
Many network neutrality supporters are urging the FCC to use a legal maneuver called reclassification to claim broader powers to regulate broadband providers. We'll explain that in the next card.
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To understand the debate, we have to go back to 1996, the year Congress last overhauled telecommunications law. In that year, Congress established two legal categories:
Since 1996, there's been a debate over how to classify broadband services offered by incumbents such as Comcast and Verizon. Many open internet activists have argued that the law requires them to be treated as telecommunications services. But in a 2005 ruling, the Supreme Court ruled that the FCC could classify them as information services if they wanted to. That's what the FCC has done ever since.
That decision came back to haunt the agency earlier this year. The US Court of Appeals for the DC Circuit ruled that because the FCC had previously classified broadband as a low-regulation "information service," it could not impose strong network neutrality regulations on them.
The FCC could officially change its mind and declare broadband a telecommunications service. That would likely give the agency the power to enact strong network neutrality regulations.
The idea gained momentum in November, when President Obama announced his support for the concept:
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Generally speaking, network neutrality violations have been rare, but a few controversies have occurred over the last decade.
In 2005, a small North Carolina telephone company called Madison River Communications began blocking voice-over-IP services that competed with its own telephone service. The FCC investigated, leading to a $15,000 fine.
In 2007, Comcast interfered with users' peer-to-peer file sharing applications by sending fake reset packets that tricked each side of the connection into believing the other had hung up. When the FCC tried to punish Comcast for the infraction in 2008, the cable company sued, arguing that the FCC needed to go through a formal rule-making process before net neutrality rules could be legally binding. The court sided with Comcast in 2010.
Wireless carriers' efforts to conserve bandwidth have sparked net neutrality controversies. In 2009, Apple limited Skype calls to wifi networks to save bandwidth on cellular networks. In 2012, AT&T banned the use of FaceTime, Apple's bandwidth-hungry video chat service for the iPhone, on its wireless networks. Again, users were free to use the app on wifi networks. AT&T gradually relaxed the restriction. Because the FCC's then-current network neutrality rules largely exempted wireless networks, this did not trigger FCC scrutiny.
Some critics accused Comcast of violating net neutrality in 2012 when the cable company announced that traffic generated by its own video streaming app wouldn't count against customers' bandwidth caps. That could give consumers an incentive to sign up for Comcast's service rather than high-bandwidth competitors such as Netflix or Amazon Instant Video.
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In February, Netflix agreed to pay Comcast to ensure that its videos would play smoothly for Comcast customers. The company signed a similar deal with Verizon in April. Netflix signed these deals because its customers had been experiencing declining speeds for several months beforehand. Netflix realized it would be at a competitive disadvantage if it didn't pay for speedier service. After its payment to Comcast, Netflix's customers experienced a 67 percent improvement in their average connection speed.
Netflix has accused Comcast of deliberately provoking the crisis by refusing to upgrade its network to accommodate Netflix traffic, leaving Netflix with little choice but to pay a "toll." That might sound like a classic network neutrality violation. But surprisingly, leading network neutrality proposals wouldn't affect this kind of agreement at all.
That's because Comcast wasn't technically offering Netflix a "fast lane" on an existing connection. Instead, Netflix paid Comcast to accept a whole new connection. The terms of these agreements, known as "peering," have always been negotiated in an unregulated market, and conventional network neutrality regulations don't apply to them.
You could argue that Netflix's deal with Comcast doesn't violate network neutrality because everyone on this new pipe (e.g. only Netflix) is treated the same, just as everyone on the old, overloaded pipe gets equal treatment. But it's hard to see any practical difference between the kind of "fast lane" agreement network neutrality supporters have campaigned against and Netflix paying Comcast for a faster connection.
Tim Wu, the man who coined the term network neutrality, believes that the concept is broad enough to encompass issues like the Comcast-Netflix dispute. "Network neutrality is how the public has learned to talk about the conditions of competition over the wires," he told me in June. "I think it's useful to just have a general word that signifies this is the conditions by which companies on the internet are treated."
It's one thing to describe this kind of interconnection dispute in terms of network neutrality. But the harder challenge is to develop clear, enforceable rules to prevent broadband providers from abusing their power in the interconnection market.
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In principle, the concept of network neutrality applies equally to cellular networks and conventional wired networks. But network neutrality proposals often feature less regulation of wireless networks than wired networks.
That was true of the regulations the FCC adopted in 2010. Terrestrial networks were prohibited from blocking content or engaging in unreasonable discrimination, but wireless networks were only prohibited from outright blocking. The FCC signaled in May that it expected to take a similar approach with its new rules.
Why treat wireless networks differently? There are several arguments for doing so. First, the mobile internet is still fairly young. Policymakers are concerned that premature regulation could prevent valuable experimentation by wireless carriers.
Second, the shared nature of electromagnetic spectrum means that bandwidth is scarcer on wireless networks than on networks based on copper or glass cables. And because users carry their phones with them, bandwidth demands are less predictable and less uniform. So wireless companies argue they need more flexibility to manage their networks' scarce capacity.
Finally, the wireless market is significantly more competitive. Most Americans have at least four options for wireless Internet service, compared with two or fewer choices for residential broadband service. With more competitors, wireless networks have a stronger incentive not to manage their networks in ways that harm their customers.
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While network neutrality regulation has been the focus of Internet policy debates over the last decade, it is not the only way to promote an open Internet. Here are some alternative strategies.
Unbundle the last mile: The most expensive part of any broadband network is the "last mile" — the glass or copper cable that connects your house to the nearest ISP facility. This part of the network is expensive because it requires tearing up streets and lawns all over town. Because the process is so expensive, it's difficult to convince multiple companies to build cables to a customer's home.
Unbundling is a policy that forces companies that have already built cables in a neighborhood — usually your local phone or cable company — to lease this part of their network to competitors at regulated rates. That dramatically lowers the barrier for entry for new ISPs because they don't have to lay nearly as many new cables.
The United States tried unbundling during the Clinton Administration. The policy was controversial and it was abandoned during the George W. Bush Administration. But the approach is popular outside the United States and some observers argue the US shouldn't have given up on it.
Promote a "third pipe": Where unbundling tries to have many companies competing to provide service to a household over the same set of wires, another approach is to encourage companies to build completely separate networks. The poster child for this approach is Kansas City, where Google has built a brand new fiber optic network. City leaders enticed Google to Kansas City by cutting red tape and reducing fees.
Google is considering expanding its fiber network to almost a dozen other metropolitan areas. But building residential broadband networks is still extremely expensive. Few companies have the resources to undertake such projects on a large scale, and so far Google is the only major company to do it. That means that most cities won't have a competitor like Google shaking up their broadband markets any time soon.
Antitrust law: Instead of establishing general network neutrality rules, federal regulators could monitor the actions of major broadband providers and intervene if they engage in anticompetitive practices. That's the approach the government took in 1974 when it filed a lawsuit that led to the breakup of AT&T a decade later. Right now, the FCC is considering whether to approve the merger of the nation's two largest cable companies, Comcast and Time Warner Cable. Blocking that merger could promote a competitive internet.
Municipal broadband: If a city isn't satisfied with the local broadband choices, one option is for cities to build a new broadband network themselves. A few cities have tried this, including Chatannooga, TN, and Lafayette, LA. But finding the money to finance such a project is difficult, and municipal broadband efforts face strong opposition from incumbent telecommunications companies. They've convinced legislatures in 20 states to restrict municipal broadband networks.
FCC Chairman Tom Wheeler is considering regulations to overrule these state regulations, but his proposal faces opposition from Republicans in Congress.
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This is very much a work in progress. It will continue to be updated as events unfold, new research gets published, and fresh questions emerge.
So if you have additional questions or comments or quibbles or complaints, send a note to Timothy B. Lee: email@example.com.
(Background image for this card set by Pete)
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This is a running list of substantive updates, corrections, and additions to this card stack.
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