Brief-Net Neutrality

Background:

The basic concept of net neutrality originated in the age of the telegram around 1860. Telegrams were routed “equally” without attempting to discern their contents or adjusting for one application or another. These networks were called “end-to-end neutral”. Current U.S. law classifies telegrams and the phone network (public switched telephone network or PSTN) as common carriers. This means that they are treated as public utilities and are overseen by the Federal Communications Commission (FCC). These networks are specifically regulated to ensure fair pricing and access, and to prevent preferential treatment.

Past legal issues
Originally, the Internet was not legally available for commercial use. It became available in the late 1980s.
In the late 1990s and early 2000s, consumers and businesses began to attach new devices to their Internet connections, and use Internet services that were not in existence in the mid-1990s.
One reaction of many broadband operators was to impose various contractual limits on the activities of their subscribers. In the best known examples, Cox Cable disciplined users of virtual private networks (VPNs) and AT&T, as a cable operator, warned customers that using a Wi-Fi service for home-networking constituted "theft of service" and a federal crime.[56] Comcast blocked ports of VPNs, forcing the state of Washington, for example, to contract with telecommunications providers to ensure that its employees had access to unimpeded broadband for telecommuting applications.


Cable modem Internet access has always been categorized under U.S. law as an information service, and not a telecommunications service, and thus has not been subject to common carrier regulations, as upheld in National Cable & Telecommunications Association v. Brand X Internet Services. High-speed data links, which make up the Internet's core, are also not regulated by common carrier law. On the other hand, Internet access across the phone network, including DSL, was for a long time categorized as a telecommunications service, and subject to common carrier regulations. However, on August 5, 2005, the FCC reclassified DSL services as information services rather than telecommunications services, and replaced common carrier requirements on them with a set of four less-restrictive net neutrality principles.[7] These principles, however, are not FCC rules, and therefore not enforceable requirements.

1. Consumers are entitled to access the lawful Internet content of their choice;
2. Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;
3. Consumers are entitled to connect their choice of legal devices that do not harm the network; and
4. Consumers are entitled to competition among network providers, application and service providers, and content providers.

Actually implementing the principles requires either official FCC rule-making or federal legislation. As the principles do not impose specific regulations, they sparked a debate over whether or not Internet service providers should also be allowed to discriminate between different service providers by offering higher network priority to higher-paying companies and customers, allowing some services to operate faster or more predictably and ultimately become more acceptable to end users.

In a June 2007 report, the United States Federal Trade Commission (FTC) urged restraint with respect to the new regulations proposed by network neutrality advocates, noting the "broadband industry is a relatively young and evolving one," and given no "significant market failure or demonstrated consumer harm from conduct by broadband providers," such regulations "may well have adverse effects on consumer welfare, despite the good intentions of their proponents."[14]

On February 25, 2008, Kevin Martin, the Chairman of the Federal Communications Commission, said that he is "ready, willing and able," to prevent broadband Internet service providers from irrationally interfering with their subscribers' Internet access.[20]

In August 2008, the FCC ruled that Comcast broke the law when it throttled the bandwidth available to certain customers for video files in order to make sure that other customers had adequate bandwidth.[21][22] Comcast also planned to set a cap at 250 gigabytes for how much data users could download and upload each month, with a plan in mind to terminate accounts for a year if they went above the cap twice in a period of 6 months.

January 2008, Time Warner Cable first introduced their intention to move to a "consumption based billing" plan to continue profitable net neutrality. In 2009, information was released that packages would be 10GB, 20GB, 40GB, and 60GB, and featured overage charges of $1 per GB, capped at $75, and Time Warner launched the pricing system in several markets including Rochester, NY, Beaumont, TX and Austin, TX. There was a public outcry. Early April, they announced that they would offer larger packages. Public dissatisfaction did not recede. On April 16, they were forced to abandon the plan altogether.

In May 2010, after reports indicated the FCC would drop their effort to enforce net neutrality, they announced they would continue their fight. It was believed the FCC would not be able to enforce net neutrality after a Federal court's overthrow of the agency's Order against Comcast.[23]

The U.S. Court of Appeals for the District of Columbia ruled that the FCC lacks authority to require broadband providers to give equal treatment to all Internet traffic flowing over their networks. That was a big victory for Comcast Corp., the nation's largest cable company, which had challenged the FCC's authority to impose such "network neutrality" obligations on broadband providers.





Arguments For
Nondiscrimination is a foundation of the Internet
• Nondiscrimination is a basic obligation of all network operators under Title II of the Communications Act. Almost 40 years ago, the Federal Communications Commission was confronted with the question of how to handle the transmission of data over telecommunications networks.
• In a series of proceedings beginning in 1968 known as the Computer Inquiries, the FCC decided that the companies providing communications services would not be allowed to interfere with or discriminate against information services. When a federal court broke up Ma Bell in 1982, it required the Baby Bells to provide nondiscriminatory interconnection and access to their networks. These decisions to require the communications network to treat information service in a nondiscriminatory manner were the key building block of the Internet -- its First Amendment.
• Under these protections, the physical wires over which data and information flow were treated differently than the data and information themselves. When network owners can’t mess with the content, the content market remains free and vigorously competitive. This separation of the physical communications layer from the content and applications layers was a cornerstone of telecommunications law--putting control of the Internet in the hands of the users at the edges but in the summer of 2005 -- under intense pressure from phone and cable lobbyists -- the FCC removed this cornerstone.
• In the years since then, these network owners have openly declared that they intend to build business models based on discrimination, extorting money from online content and applications providers and favoring the Web sites and services that they own or with whom they strike special deals. This plan violates the fundamental principle of nondiscrimination that has been law for generations, and which gave us a free-flowing Internet that allows the best ideas to emerge on their own merits.
• Advocates of Net Neutrality are not promoting new regulations. We are attempting to restore tried and tested consumer protections and network operating principles that made the Internet a great engine for free speech and innovation. By passing Net Neutrality legislation we're restoring under law the open Internet's most fundamental principle.
A lack of net neutrality will allow companies to distort the market and undermine competition
• Without net neutrality, companies can give more priority to the sites that give them more money, and they can restrict speed to the customers that pay less for their internet. This is unfair to the consumer, and it not only gives companies too much power to abuse the consumer, it gives them power to keep competition out of the way. For example, if Facebook pays more money to an ISP than Myspace, then Facebook will probably come up first on search results and will run more quickly than Myspace. Companies should not be able to control the internet by their own whims.


Arguments Against
If companies attempt to place restrictions on consumers, there will be a consumer backlash along with many users finding ways around the restrictions. Net neutrality will stay alive without legislation
There are already laws to protect net neutrality
• The Communications Act of 1934 (Title 1) gives the federal government power to protect consumers from online discrimination. Amazon is one of the strong corporate supporters of Net neutrality regulation but even its spokesman has agreed that this gives the FCC power to take action if presented with unfair business tactics by broadband providers.
• In 2005, the U.S. Supreme Court explicitly recognized federal authority to protect consumers’ online rights.
• Other protections for Net users include multiple antitrust laws, laws against unfair competition and the FCC’s own “Four Principles” for an open Internet. The first principle is clear: “Consumers are entitled to access the lawful Internet content of their choice.”
High cost to consumers if legislation is enacted
• When Net neutrality emerged in Congress in 2006, a Forrester Research analysis predicted that if Congress passed it, “Legal costs will shoot through the roof – draining the pockets of everyone involved.”
• ISP’s are investing $24 billion in network upgrades this year to handle the oncoming crush of video streams, movie downloads and other online traffic. But given the surging growth of online data, even this by itself won’t be enough. We need smart networks capable of differentiating between a movie stream that needs prioritization and an email that can be delayed a few seconds.
• Net neutrality’s complex pricing regulations would create a legal loophole that pushes the huge cost for tomorrow’s Internet entirely onto the Net user. A net neutrality law would let Google, Amazon and other large online companies avoid paying anything toward the cost of deploying these networks.
Legislation will restrict competition
• Example: Interstate Commerce Commission
o In 1887, the ICC was created to regulate the railroads. The Interstate Commerce Act was very similar to today’s network neutrality proposals: it prohibited discrimination by railroads toward their customers and created the ICC to enforce the regulations. The first ICC chairman was a railroad ally, and the railroads quickly gained full control of the commission. It used its control of the commission to reduce competition from the trucking industry in 1930. The ICC was supposed to protect the consumer from the railroads, but it mostly protected railroads from competition.
o Any net neutrality regulation that Congress passes will be enforced by the FCC, and no one has more influence over the FCC than telecom companies. The FCC has repeatedly promoted the interests of large telecom companies, and it will most likely use the new legislation to promote whatever the big corporations want, which will significantly restrict competition. As an example of a precedent, AT&T used regulatory barriers in the 1960s to prevent another company, MCI, from entering the long-distance market for about a decade