Net Neutrality Issue (Again): Pros and Cons

June 11, 2018, marked the end of net neutrality, a Federal Communications Commission (FCC) policy that required internet service providers to allow for equal access to all content on the web. The policy change was decided by a vote on Dec. 14, 2018, after FCC chairman Ajit Pai pushed for significant changes to loosen government oversight of internet providers. Now that it's gone, it's important to understand what net neutrality is, how we got here, and what could be next.

The Obama administration advocated for net neutrality, and the FCC had rules in place since 2010 that required companies like Verizon Communications Inc. (VZ) and Comcast Corp. (CMCSA) to handle all similar content on their networks in an equal fashion, regardless of whether it was a video on a personal blog, a streaming service like Spotify or a government website. More specifically, net neutrality rules prevented:

• blocking of website, services or content online
• throttling or slowing down of websites or online services
• preferential treatment or better service from service providers to certain companies or consumers who pay higher premiums

In January 2015, under then-chairman Tom Wheeler, the FCC proposed new rules for internet traffic that would allow broadband providers to charge companies like Netflix Inc. (NFLX) and Google Inc. (GOOG) a higher rate to deliver content via the speediest lanes. Wheeler was a former lobbyist for the cable television industry, which some believed would benefit greatly if new rules were created to allow internet service providers to treat data differently.

Before the initial policy decision on Feb. 26, 2015, HBO’s John Oliver took it upon himself to be the unofficial pro-net neutrality spokesman and goosed Wheeler over the issue on more than one occasion. The end of net neutrality will spawn the beginning of net inequality, naysayers like Oliver cried. It meant that broadband providers, which often also offer cable TV, would be able to charge premiums for an indispensable service for businesses — fast internet service. The providers would be able to selectively pick which companies should get access to high-speed internet and how much they should pay, which could be devastating for the streaming industry.

Oliver's rants indeed drew the public’s attention to a difficult-to-understand legal fight. During the first round of debates in 2015, the public filed more than 120,000 comments on the issue of “Protecting and Promoting the Open Internet,” a staggering number and almost ten times the next most-commented issue at the time. The FCC site actually crashed after the John Oliver episode aired.

Many of the comments expressed outrage that the FCC would oversee a new era of tiered internet service. Consumers and businesses feared that the internet would become a segregated landscape, where some content would be delivered at full speed while other websites would work more slowly because their owners couldn't pay premiums for the bandwidth.

Many social media users noted that in countries without net neutrality, people have to pay packages for different types of internet, meaning that if you want to stream video, you have to pay for a package that's entirely separate from packages that allow you to play games online or just visit websites.

The issue was seemingly put to rest in 2015 when the regulations that restricted broadband providers from blocking content, slowing down specific services or applications, and receiving payments for favorable treatment stayed in place. Then, in November 2016, Donald Trump was elected President, and he installed Pai as the new head of the FCC. 

Pai had warned against net neutrality in 2015, arguing in a speech, "It’s basic economics. The more heavily you regulate something, the less of it you’re likely to get." He said that the purpose of the roll-back of policy is to "restore internet freedom," according to the accompanying press release.

After becoming the new FCC head in January 2017, Pai continued to argue that high-speed internet service should not be treated as a public utility and that the industry should police itself instead of being regulated by the government. With that, the same conflict that was put to rest in 2015 began once again.

More than 70,000 websites and organizations – including companies such as Google, Facebook, IAC and, surprisingly, AT&T– joined the "Day of Action" on July 12, 2017. On that day, websites published alerts encouraging users to send letters to the FCC urging it to keep net neutrality. On December 12, 2017, many web-based companies, such as Reddit, Etsy and Kickstarter, posted protests to the FCC's imminent vote on their websites. Still, the FCC voted to repeal net neutrality during its Dec. 14, 2018 vote, a measure that took effect on June 11, 2018.

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It's too early to measure the impact of the repeal of net neutrality in the U.S., but many predict that it will help cable companies and hurt streaming providers, and eventually, the consumer will foot the bill. However, the FCC's decision might not be the final say, because the fight for net neutrality continues. 

In May 2018, the Senate voted to overturn the repeal of net neutrality, but the resolution is now stalled in the House. Meanwhile, more than 29 states are making moves of their own to enforce net neutrality; Washington, Oregon, California, New York are among them. This could lead to more legal battles since the FCC has said that states cannot pass laws inconsistent with federal net neutrality rules, and only the FCC has the authority to write these types of regulations.