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Network neutrality, explained

What is network neutrality?

Network neutrality is the idea that internet service providers (ISPs), including cable companies like Time Warner and wireless providers like Sprint, 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.

The term 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 nondiscrimination rule that would ensure a level playing field among Internet applications.

Ever since then, the term 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 Facebook, Dropbox, and Uber.

But critics warn that regulations could be counterproductive, discouraging investment in internet infrastructure and limiting the flexibility of ISPs themselves to innovate.

In February 2015, the FCC approved new, stronger network neutrality rules that regulate internet access like a public utility. Network neutrality supporters hailed the proposal. But Republicans in Congress say it will lead to excessive regulation of the internet. They're working on legislation that would partially reverse the rules.

The regulations also face challenges in the courts. Multiple telecom industry groups have sued to stop the new rules, arguing that they exceed the FCC's authority. It may take a couple of years for these legal issues to be settled.

What’s the argument for network neutrality?

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 the site 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 network neutrality is 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. Supporters say that freedom has allowed the creation of dozens of innovative online services such as Google, Twitter, Netflix, Amazon, Skype, and more.

They 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.

Network neutrality supporters are particularly worried about incumbent broadband providers deliberately hobbling new services that represent a competitive threat to those providers' own products. For example, telephone companies might be tempted to interfere with internet telephony services such as Skype that compete with traditional phone service. Cable companies might want to slow down services such as Netflix that compete with their paid television service.

What's the case against network neutrality regulations?

Critics 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 delivering data. Internet users might benefit if companies could pay a premium to ensure that their latency-sensitive applications are given priority. But strict network neutrality rules could bar ISPs from experimenting with this kind of service.

Another common concern is 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 — about 50 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.

Some network neutrality opponents worry 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.

Finally, some regulation skeptics argue that network neutrality regulations are unnecessary because ISPs have a natural incentive not to break the internet. After all, internet access becomes more valuable if there are more innovative services available online. Why would ISPs kill the goose that laid the golden egg?

How did the government promote open networks in the internet's early years?

The Federal Communications Commission has been trying to promote open networks since long before the term network neutrality was coined . In the 1970s and '80s, 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, a kind of broadband internet access that works through phone networks. 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, supporters of an open internet started lobbying for network neutrality regulations.

Is the internet a big truck? Or is it a series of tubes?

The internet is not a big truck. It's a series of tubes.

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(aldenjewell)

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.

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.

How has the FCC regulated network neutrality under President Obama?

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 (FCC). 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 they went beyond the powers Congress had granted to the FCC. 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. Wheeler initially proposed a set of network neutrality rules that many advocates saw as too weak. A grassroots online protest pressed Wheeler to adopt stronger rules. The idea gained momentum in November, when President Obama announced his support for the concept:

The pressure worked. Wheeler proposed new, stricter network neutrality regulations, and the FCC's Democratic majority approved them in February 2015.

What is reclassification, and why is it controversial?

The new regulations approved by the FCC in 2015 rely on reclassification, a legal tactic that gives the FCC broader authority to regulate broadband service. The move was cheered by network neutrality supporters, including President Obama, but is opposed by many Republicans.

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:

  • Telecommunications services are services such as a traditional phone line that are regulated as public utilities. The law imposes a wide variety of legal obligations on telecommunications services and gives the FCC broad discretion to regulate them.
  • Information services are services that allow people to store, process, and publish information online — like old-school AOL, or modern services like YouTube or Facebook. These services are exempt from most FCC regulations.

Since 1996, there's been a debate over how to classify broadband services offered by companies such as Comcast and Verizon. Many open-internet activists have argued that the law requires them to be treated as telecommunications services. But in 2005 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 in 2014 when the US Court of Appeals for the DC Circuit ruled that so long as the FCC classified internet access as a low-regulation "information service," it could not impose strong network neutrality regulations on it. So in February 2015, the FCC declared broadband internet access to be a telecommunications service.

Critics argue that the FCC has opened a legal Pandora's box. Declaring broadband to be a telecommunications service subjects it to a wide variety of legal requirements (including "rules about obscene phone calls, rate schedules, telephone operator services, and carrier reporting requirements") that advocates of reclassification concede are not a good fit for the internet age.

But FCC Chairman Tom Wheeler says that's not a problem, because the FCC can use a legal power called forbearance to avoid enforcing regulations that are too heavy-handed. Wheeler has described his regime as a "light touch" version of old-fashioned public utility regulation. Nevertheless, the rules the FCC approved in February 2015 go well beyond conventional network neutrality rules.

What will the FCC's new network neutrality rules do?

The network neutrality rules the FCC approved on February 26, 2015, did two big things.

First, they reclassified broadband internet service as a "telecommunications service," a legal category that means it will be regulated like a public utility. This doesn't directly protect network neutrality, but it provides a new, stronger legal foundation for network neutrality rules. At the same time, the FCC committed not to enforcing certain public-utility regulations, such as price regulations, that FCC Chairman Tom Wheeler thinks don't make sense for internet service.

Second, the FCC established strong network neutrality rules. These rules prohibited broadband providers from blocking legal content or applications online, or from giving some content better treatment than others. The rules applied both to residential broadband service and also to wireless internet access provided to smartphones.

But the rules the FCC adopted are actually considerably broader than conventional network neutrality rules. Reclassification doesn't just provide a legal foundation for network neutrality, it triggers a wide range of other legal requirements as well. One of the most important is a requirement that broadband providers behave in a "just and reasonable" fashion.

The agency has invited the public to submit complaints if a broadband provider's conduct is not "just and reasonable" — even if the conduct doesn't run afoul of network neutrality principles. So the meaning of "just and reasonable" will be determined on a case-by-case basis, leaving broadband providers with significant uncertainty about what they're allowed to do.

The FCC's rules applied to both wired networks and wireless ones. That's a significant departure from the FCC's 2010 rules, which had exempted wireless providers from many regulations due to concerns that excessive regulation would hamper innovation. Today, however, the agency believes that the wireless internet is mature enough that stronger regulations are needed.

Netflix has been forced to cut private deals with ISPs. Would this kind of dispute be covered by Wheeler's rules?

Yes, it would.

In early 2014, Netflix agreed to pay Comcast and Verizon to ensure that Netflix videos would play smoothly on their networks. 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."

In the past, many network neutrality proposals haven't applied in this kind of situation. 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 traditionally been negotiated in an unregulated market.

However, the network neutrality regulations the FCC approved in February 2015 do govern peering disputes. A company who feels a broadband provider is behaving unreasonably in the interconnection market will be able to complain to the FCC, which will intervene if the company's actions are not "just and reasonable."

What would the Republicans' competing network neutrality proposal do?

In January 2015, as it became clear that FCC chairman Tom Wheeler was going to adopt strong network neutrality rules based on reclassification, senior Republicans in Congress announced a network neutrality proposal of their own.

The move was widely seen as a strategic retreat. One of the bill's sponsors, Rep. Fred Upton (R-MI), had described network neutrality rules as a "solution in search of a problem" the year before. But Republicans hoped to strike a compromise that would provide some network neutrality protections without reclassifying broadband so it was regulated like a public utility.

On paper, the Republican proposal achieves most of the goals of network neutrality supporters. It would bar internet providers from blocking or throttling content. However, the proposal has gotten a chilly reception from network neutrality advocates, who prefer the stronger rules the FCC adopted in February.

For many network neutrality supporters, the big problem with the Republican bill is that it removes the Federal Communications Commission's authority to tweak the rules in changing circumstances. Many network neutrality advocates worry that without this rulemaking power, it will be too easy for broadband providers to find and exploit loopholes in the network neutrality rules. They also warn that stripping the FCC of rulemaking authority will also make it more difficult for the agency to update the rules to adjust to changing circumstances in the future.

In any event, Republican efforts to rein in the FCC have little chance of success as long as Barack Obama is in the White House. He was a strong proponent of the approach the FCC adopted in February 2015, and would almost certainly veto legislation that sought to overturn the new rules.

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