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President Obama rattled the internet this week when he unloaded his opinion on net neutrality, the notion that all internet traffic should be treated equally. But to really understand what’s going on here, you should return to a moment earlier this year, when many American had trouble watching movies and TV shows on Netflix.
U.S. consumers were paying internet service providers like Comcast and Verizon for access to online applications like Netflix—which streams its movies and TV shows over the network—but the big ISPs weren’t letting that happen. Instead, they were allowing back-end connection points—the middle ground between Netflix’s video servers and their customers —to become overwhelmed with data. This meant that for many Verizon and Comcast customers, internet shows like “House of Cards” weren’t playing very well.
Netflix ended up paying the big internet service providers to solve its problem, but to those who believe in net neutrality, this was a worrying outcome. It seemed as though the big ISPs were inappropriately flexing their power—charging content providers extra to make sure their programs played properly on the Verizon and Comcast networks, and holding customers hostage to boot.
Are we happy with the state of America’s internet service providers and the way they conduct their business?
That dispute, coupled with a January court ruling that forced the FCC to rework its net neutrality rules, set the stage for what’s become an all-out policy brawl over how we plan to regulate the internet here in the U.S., a fight that hit its apogee this week when Obama called on the Federal Communications Commission to roll back more than a decade of policy, and treat the Verizons and Comcasts of the world as “telecommunications services” providers—the so-called Title II option, first laid out in the 1934 Telecommunications Act.
This idea freaks the ISPs out. Since the early 2000s, the FCC has given them a bit of a regulatory pass, treating them as more-lightly regulated “information services” companies. If they’re regulated under Title II, they’ll have less freedom to do what they want—and, they say, less incentive to continue expanding their networks. But many believe that Title II is the only way to ensure that they don’t start playing with internet traffic in unfair ways.
It’s easy to get lost in the weeds of the debate, but the question before the FCC can be boiled down to pretty simple terms: Are we happy with the state of America’s internet service providers and the way they conduct their business?
‘The Worst Company in America’
For consumers, that’s an easy question to answer. Nobody seems to like the internet service providers. That’s a big part of the reason why the FCC fielded about 4 million comments on net neutrality over the past six months.
Comcast was recently dubbed the “worst company in America,” by the Consumerist. AT&T is so uncompetitive that it can put the brakes on a 100-city fiber rollout, as it did this week, without feeling much pressure from business rivals.
A decade ago, the FCC said that less regulation would help deliver better consumer internet services, but that hasn’t panned out. Internet service here is slipping. Compared with countries such as Japan, South Korea and the Netherlands, we pay too much for not enough bandwidth.
Check out former LA Times Reporter Chris O’Brien’s eye-opening observations on life on the French internet fast lane if you want a taste of how bad things are here in the U.S.
Meanwhile, Inside the Internet…
But it all gets murkier when you look inside the internet’s data centers—home to the Netflix-Comcast dispute. There, things have evolved amazingly well without government regulation.
Moving bits over the internet or caching them in facilities nearer to consumers has become incredibly cheap and effective, and it has paved the way for fast-moving era of innovation that’s made America the envy of the world.
If the big ISPs are messing with this success by gouging Netfilx and Google, then that’s a problem. But conversely, if the FCC ends up fixing Netflix and Google’s problem with unwieldy regulations that hurt smaller companies, then Obama’s Title II option would backfire.
The Bigger Question
Either way, Title II is not going to be the panacea or Armageddon that advocates on both sides of the debate predict. It’s simply a weightier tool that the FCC can use to keep the carriers in line when they operate contrary to the public interest. As we’ve seen over the past decade, the only thing that seems to undo bad ISP business practices is internet outrage, public pressure, and the threat of FCC action.
Well, there is another way to change things: have more competition amongst ISPs. Sadly, the real problem on the U.S. internet is the total the lack of competition amongst service providers. But nobody is talking about how to fix that one.
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