“Net Neutrality” wasn’t all it was cracked up to be.

Last week the internet went insane when the FCC announced it would likely repeal the Obama-era “Open Internet Act” which enshrined  “net neutrality” into law.

Ajit Pai, who was appointed to the FCC by then President Obama, entered a dissenting opinion when the rule was enacted. He was later made FCC chair by Trump.

From Pai’s dissenting opinion statement in the 2015 decision (downloadable here):

“For twenty years, there’s been a bipartisan consensus in favor of a free and open Internet. A Republican Congress and a Democratic President enshrined in the Telecommunications Act of 1996 the principle that the Internet should be a “vibrant and competitive free market . . . unfettered by Federal or State regulation.”

But today, the FCC abandons those policies. It reclassifies broadband Internet access service as a Title II telecommunications service. It seizes unilateral authority to regulate Internet conduct, to direct where Internet service providers put their investments, and to determine what service plans will be available to the American public. This is not only a radical departure from the bipartisan, market-oriented policies that have served us so well for the last two decades.

The Commission’s decision to adopt President Obama’s plan marks a monumental shift toward government control of the Internet. It gives the FCC the power to micromanage virtually every aspect of how the Internet works. It’s an overreach that will let a Washington bureaucracy, and not the American people, decide the future of the online world.

Pai’s dissenting opinion is 79 pages long. When you read it, you get the sense that the law would perversely protect large size incumbents and heavily penalize smaller upstarts. One example he cited was that the activists promoting the rule didn’t target AT&T nor Verizon with their first net neutrality complaint, but rather MetroPCS – a tiny challenger with single digit percent market share, who’s alleged crime was offering unlimited Youtube.

 

What’s troubling about the original act

The original act contains “The General Conduct Rule”, a broad, overly vague declaration that empowers the government to step in and literally control the internet for reasons that can be widely interpreted to mean pretty well anything.

In then FCC Chairman’s Tom Wheeler’s words:

The Order also includes a general conduct rule that can be used to stop new and novel threats to the Internet. That means there will be basic ground rules and a referee on the field to enforce them. If an action hurts consumers, competition, or innovation, the FCC will have the authority to throw the flag.

What did that mean exactly? Even the Electronic Frontier Foundation  and Techdirt (enormous respect to both, and both proponents of net neutrality) have concerns that the general conduct rule is too vague and could be abused.  Given Obama’s later ruminations below, and events of the last year – the General Conduct Rule provides a legal justification for outright censorship:

“We are going to have to rebuild within this wild-wild-west-of-information flow some sort of curating function that people agree to… There has to be, I think, some sort of way in which we can sort through information that passes some basic truthiness tests and those that we have to discard, because they just don’t have any basis in anything that’s actually happening in the world…That is hard to do, but I think it’s going to be necessary, it’s going to be possible,”

— Barack Obama in speech at Frontiers Conference, Pittsburgh, PA, Oct 13, 2016 (emphasis added)

So, you’re really worried about “net neutrality”?

If  all you care about when you think “net neutrality” is binge watching Stranger Things over your iPhone’s LTE while you drive to work, you may not be seeing the big picture. Also, don’t worry – even after the repeal your ability to do so will continue unfettered (see below).

The gigantic social apps like Facebook and Twitter are known to have themselves run programs and agendas to shape opinion, control what people see or don’t see, and I would argue that these initiatives pose greater threats to a free and open internet than competitive issues around the raw connectivity one uses to connect to it.

Google CEO Eric Schmidt recently announced that the search engine giant will “de-rank” RT.com and Sputnik news.[1] Nobody cares, because the mainstream media has been diligently cranking the shriek-o-meter over alleged Russian election interference for a year now (nevermind that the US has a long history of routinely interfering in foreign elections and is doing so right now, in Hungary’s election). But if you think Google’s announcement is anything other than a “trial balloon” for future search engine shaping then I have an ICO for you!

Let them eat throttle

If somebody wants to throttle Facetime traffic, or VPNs, or bittorrent I say let them. That way other ISPs will compete on the basis that they don’t. Companies such as Canada’s own Tucows/Ting, who is in the broadband access business south of the border has always been and will always be a supporter of net neutrality in their own conduct. They won’t throttle, that’s one of the many things that makes them attractive to prospective customers (disclosure: former shareholder, customer).

When ISPs started blocking port 25 to prevent customers from setting up mailservers on their home connections, companies like ours offered SMTP port forwarding to work around it.

In the future, the more companies throttle (but they won’t, see below), the more innovation will spring up from the private sector to thwart the throttling and win the customer over in the process of doing so, this is the way it’s supposed to work.

Even my concerns around Google, Facebook, Twitter shaping traffic, influencing what is seen and not seen let them. That’s their choice and people are already reacting to it. People are switching off Twitter to Gab. If not Gab today, then something else tomorrow.

I switched off of Google to DuckDuckGo a few months ago (enjoying the massive decrease in being stalked across the internet by retargeted ads), and we removed Google analytics from easyDNS years ago. Next generation search engines, decentralized, blockchain enabled like Presearch.io are already in the pipeline. Alternative browsers like Brave are already here.

In the very near future even the connectivity providers will face emergent competition from decentralized mesh networks.

That’s what happens. Because in the end, people are smart enough to know what they want and if the current incumbents are part of the problem then the people are smart enough to build and find the alternatives.

What the repeal really means

At the end of the day, repealing the act simply reverts the regulatory climate back to pre-2015 landscape, more-or-less. I don’t recall the internet grinding to a halt because of rampant ISP throttling. Sure, there were cases but they were largely answered via competitive entrants head-on. When some ISPs throttled Apple Facetime, for example, others sprang up advertising the specific fact that they did not.[2]

Further, FCC chair Ajit Prai is against throttling. The new regulations would require ISPs to be transparent about these practices, and would move enforcement and punishment to the FTC in what he called after-the-fact regulation. Some people are jumping on this “after the fact” bit, but think about it: what is our legal system predicated on? It’s all supposed to be after-the-fact.

Less Government Please

As those who follow this space may know, we’re usually in favour of anything that reduces regulation and government interference, especially when it comes to the internet.

We generally don’t like people or companies being told what they can or cannot do with their own property and businesses.

I believe consumers respond to unfair treatment with their wallets. When businesses overreach I smell opportunity and disruption. When governments overreach it feels repressive and authoritarian.

It all comes down to choice, do we have that? As businesses, as people? Or does the government do it all for us?

 

Further Reading

Footnotes

[1] Say what you want about RT and Sputnik, they frequently cover stories which the western mainstream media will simply not touch, such as the US involvement and support for Saudi Arabia in their near-genocidal war against Yemen. Sputnik was also instrumental in the takedown of Washington Post and New York Time’s near criminally libellous and nonsensical “Propornot” story. Wapo  had to later walk back their stories as being unsubstantiated. In that event, Charles Hugh Smith, an author and socio-political commentator was labeled by Propornot as a “Russian Disinfo” agent. I have a small audiobook business that publishes audio versions two of Charles Hugh Smith’s books.

[2] Net Neutrality is not a Good Thing, It’s Not an Evil Thing, Either

 

23 thoughts on ““Net Neutrality” wasn’t all it was cracked up to be.”

  1. Halfdan Ingvarsson says:

    The problem here is that the “solution” relies on competition. There is no effective competition for broadband in the US. Ironically, that’s mostly thanks to early government subsidies and monopoly status granted to the large incumbents. Later on, that’s also been helped by the large telcos and cable companies crafting “no municipal broadband” statutes that have been made state laws in 21 of 50 states.

    If you think the incumbents won’t go straight back to throttling the larger non-owned content entities in order to extract money from them on the ingress side — like Verizon did with Netflix back in 2015 —
    then I have a bridge to sell you.

    A la carte internet will follow soon. Not in every region, but absolutely where there is either duopoly or monopoly status. Pretty sure Roger, Bell and Telus are all itching to nickel and dime Canadians the same way.

  2. Mike says:

    On paper, a free market sounds great and opens the doors to competition against the megalithic telcom companies. In reality, it’s an entirely different story.

    Your article seems to omit the fact that Verizon’s lawyers have specifically stated they will gouge consumers to the fullest extent of the law if allowed (which they would be in a free market.)

    It also omits violations of the 2008 spectrum auction (again, in a free market/pre-Net Neutrality days.)

    It also omits the 2010 Open Internet Order that Verizon had sued and won against that directly led to classifying telcoms as “common carriers” under Title II.

    In short, innovation and growth (and their profits) continued during the Net Neutrality days, and we have already seen what the telcom companies will do when they are given free reign.

  3. Ben says:

    “If somebody wants to throttle Facetime traffic, or VPNs, or bittorrent I say let them. That way other ISPs will compete on the basis that they don’t. ”
    — you don’t seem to point out here that in a lot of US markets, ISPs have a monopoly (or near monopoly) where they offer services. You are given a choice between Cable or Fiber in some locations (not often), but that’s about it.

    So there is NO competition, and therefore no incentive for an ISP to not throttle… that is, I would say, the main complaint.

  4. Marc Rea says:

    Your arguments might make sense if there were alternatives to the big providers but their unceasing anti-competitive practices mean that most of us just have one or two choices. Seems unlikely that you don’t know this so I am guessing you have a dog in this fight.

  5. markjr says:

    Thanks to all who have replied so far. It is true that sitting up here in Canada I may not be aware of all the facts (one reason I recommend Techdirt to really be on top of it).

    Regarding throttling: As was pointed out here and elsewhere, the new regimen will still preclude throttling, referring it to the FTC for after-the-fact violations, which makes sense to me and would still protect consumers.

  6. David Barnett says:

    Someone once said, “the only beneficial government programmes are those which counteract the malign effects of other government programmes”.

    In a lot of U.S. locations the connectivity competition is limited by government granted franchise monopolies. Those should be outlawed as government overreach.

  7. Bill Tomlinson says:

    I think the fundamental flaw in your argument is the assumption that other companies will be able to enter the US wired broadband market* in any substantial way if the big incumbent ISPs treat their customers badly.

    The combination of up-front infrastructure costs and state and federal regulators largely in the pocket of the incumbent ISPs make it incredibly hard for new entrants. Even a company with as deep pockets as Google can’t seem to make a go of it. **

    If we could somehow conjure up real, robust competition, I’d also favor light-to-no regulation. But I think it’s fanciful to think that such conditions will arise in the majority of US markets if the big ISPs treat their customers badly.

    * No, wireless broadband isn’t really competitive at this point.

    ** Yes, I’m aware that there are a few smaller ISPs fighting the good fight (like Sonic, for example). But they’re all tiny by national standards and if they tried to grow the big ISPs would make it very hard.

  8. Ryan IRby says:

    Whether the Act is the solution or not, I would say your supposition that other ISPs will jump in to compete against the foretold bad practices is a little misled or naive.

    “other ISPs will compete on the basis that they don’t” – Which other ISPs? In the US, many consumers either don’t have a choice (only one ISP serves their area/neighborhood) or they have no other attractive choices. Satellite is costly and slow, cell networks are costly and slow, fiber is WAY costly if there’s not already a Fios or Google Fiber in your neighborhood.

    Some areas (like mine) do have a competitor, but it’s not an attractive candidate in terms of speed and price (CenturyLink vs COX). If COX decides to start charging extra for specific services/sites, especially those that compete with it’s own TV and VOD services like Netflix, Hulu, etc, I could go to CenturyLink to avoid that, supposing they don’t follow a similar tactic with their PrismTV.

    Innovative solutions to ISPs throttling have potential, if throttling becomes a ‘normal’ thing, but, ultimately, those ISPs own at least a significant portion of the path that data flows. Hiding what your traffic is, ie – using a VPN to avoid a Netflix throttle, can and likely will result in those solutions being throttled themselves.

    Let’s not forget that the regulations are intended to protect the consumers. Both consumers that have the technical know-how to circumvent restrictions, as well as consumers that simply want things to work without any fiddling or knowledge of how it actually works.

  9. Sean Jost says:

    Great article. Thanks for helping to bring awareness to this topic, most people make these days snap judgements, and net neutrality seems like a great thing until you understand what it really means.

  10. Tridus says:

    It’s certainly different up here in Canada, as competition is somewhat stronger. Here in the Maritimes, Bell and Rogers actually compete with each other on both price and features. There aren’t many other options (Xplornet for rural folks but isn’t competitive in urban markets), but that may change when third party ISPs get access to fiber the way they currently have access to cable/DSL.

    My best friend is American, and he has *one* ISP choice. It’s literally Comcast or nothing for home Internet. Part of that is due to Verizon not bothering to expand his way for some reason, and part of it is active efforts by government and corporate lobbyists to ban things like municipal broadband to keep other competitors out.

    In his case, he’s pretty much at the mercy of Comcast. That’s not a situation that most of us Canadians face, and its part of where this push comes from.

    I hadn’t heard that the FTC could still punish throttling, which is certainly an interesting point.

    (I also tend to think Bell would love to offer me an Internet package the way they do with their nonsense TV packages, and any politician who thinks that is a good idea is going to get an earful real fast. Course, if they just made it easy for people like Teksavvy to set up on the existing fiber line into my house and thus offer a competitive service, then that issue would go away since I could vote with my wallet.)

  11. Robert Fisher says:

    Here in many sections of Los Angeles, CA Spectrum (Time Warner Cable) is the only option. Because it is so expensive to upgrade the lines and equipment in neighborhoods that the first one to do it causes the others to not bother. In the distant past we had DSL internet over the phone lines, but TWC upgraded their network in our area and Verizon simply did nothing to the point they couldn’t/wouldn’t fix the technical problem in a local junction box, so we were forced to switch to TWC. The same happened in areas where AT&T came through with fiber to the house systems and they are no the only carrier in those areas. Now years later, there is no competition in LA if you want fast internet service. So far for us, Spectrum (TWC) has played nice and provides good service, and I suspect their contract with the City of Los Angeles has something to do with it as their lines run on the Power Company poles and the city owns the power company. Further, the City is working on a long term project to bring in all players to create an “internet for all” system for the city’s residents. The idea behind it is if everybody had fast internet, it would boost the economy.

  12. Steven Leach says:

    Here is a quote from the article that encapsulates the problem we have here in the U.S.A
    If somebody wants to throttle Facetime traffic, or VPNs, or bittorrent I say let them. That way other ISPs will compete on the basis that they don’t. Companies such as Canada’s own Tucows/Ting, who is in the broadband access business south of the border has always been and will always be a supporter of net neutrality in their own conduct. They won’t throttle, that’s one of the many things that makes them attractive to prospective customers (disclosure: former shareholder, customer).

    When ISPs started blocking port 25 to prevent customers from setting up mailservers on their home connections, companies like ours offered SMTP port forwarding to work around it.

    WE HAVE NO CHOICE IN ISP’s Therefore when the AT&T DSL at 768 Kbits per sec they call broadband here a 1 hr drive from Sacromento, CA is throttled I HAVE NO CHOICE. Companies complain when I use adblock, I HAVE NO CHOICE

  13. Bill Tomlinson says:

    And also, regarding Canada, the reason why most metro areas in Canada have more than two choices for an ISP is exactly because of very heavy handed regulation by the CRTC (the Canadian government’s communications regulator, for American readers).

    The CRTC forces local loop unbundling on the big ISPs that own the wires and forces them to sell access to the local loop at government regulated prices. A company like, say Teksavvy just wouldn’t even be able to exist without heavy government regulations. Without those regulations, the only ISPs in the GTA would probably be Bell and Rogers.

    So Canada doesn’t really support the “don’t regulate and competition will sort it out” mantra either.

    Of course though, some form of local loop unbundling seems to be a complete non-starter in the U.S. So, American’s are pretty much screwed.

  14. craig says:

    Changing net neutrality rules is changing the ground rules of a large, complex ecosystem. Potentially such a change should be tried in less risky, reversible, scalable way. This way it can turn out to be wrong but not a disaster. Of course that’s a lot more work and it won’t convince anyone eyeing the rest of the world as the bowl of cherries, or alternatively, as the blast zone.

  15. craig says:

    I’d also like to add that Internet access is an essential service. In this regard, like energy, more marketization has simply not brought the benefits of competition, low prices, product diversity etc. So either we’re headed for regulated Internet monopolies or wholly government provided Internet. We don’t want 9 garbage truck companies racing to collect the trash. If the product is not discretionary, and not differentiated we need effective regulation, or something a lot like it.

  16. Roger Loeb says:

    Mark — in reply to your additional comment, throttling actually can’t be handled by the FTC, one of the misleading assertions in Pai’s proposal. The FTC can enforce existing statutes, but they have no regulatory rule making authority. In order to prosecute throttling, Congress would have to create such a law. Very unlikely to happen in the current environment, and Pai is well aware of that. Also, it’s really critical that you understand what many other comments have already said — there is essentially no ISP competition in most of the U.S. If there is a choice, it’s between the incumbent telephone company (often their slow and problematic DSL service) or the cable provider, which is likely to be Comcast, the consistent winner of first prize for worst customer service.

    • markjr says:

      That is interesting, I was not aware of that (FTC thing). I wonder if the new legislation then would have some provision for this? I thought this part was fait accompli.

  17. Bill Tomlinson says:

    Yes, it’s my understanding as well that throttling will be allowed (at least, there’s nothing specific in the new rules to prevent it).
    I think the confusion arises because there is a new rule added requiring ISPs to notify their customers when they do throttle or prioritize or block traffic. So there is a rule against secretly throttling and that might be what people are miss-interpreting as a blanket ban.
    But as long as the ISPs put something in their fine print like “we reserve the right to slow down traffic from any video service to 2400 baud modem speed”, then throttling Netflix, for example, will be okay by the new rules.

    • markjr says:

      Ok so let’s talk Netflix. I’m a subscriber, it’s great. But on its own it uses something like 33% of all global bandwidth. When I look at that number it just boggles my mind, and it seems to me like Netflix is externalizing a HUGE cost of their operations onto broadband carriers. If it was their problem they’d never be able to offer the service at what, $10/month per subscriber? So when a carrier who has invested billions into their network infrastructure has to transit all that so Netflix can benefit – that seems problematic to me too.

  18. Bill Tomlinson says:

    You’re pulling a few different issues together here (as you did in your original post).
    If we want to talk about all content providers paying ISPs a flat per-bit rate or something that’s one thing and we could have a discussion about that (personally, I think the costs should land on the customer, I mean, they’re the ones asking for the content). But that’s not what Net Neutrality is about.
    Net Neutrality is simply the ISPs treating all traffic as equal regardless of source and destination. That is, not playing favorites with the bandwidth depending on who is willing to pay the ISP the most.

    • markjr says:

      Sorry about delay I thought I approved this already. (Weird your comments should be getting auto-approved anyway since you already have more than one approved.)

  19. Mark Matchen says:

    I’m really more interested in your technical contribution to this debate than your politics. You are a small player, and we all love your service, but you can see that the industry is dominated by big players. In most of Canada, there is an effective oligopoly of ISP services, whose offerings, pricing and policies are essentially in lockstep. It’s nice to say people can switch to an upstart that doesn’t throttle or whatever, but then you lose the bundle deals the majors offer and the convenience of a single provider. In reality, very few will switch, so if FakeNews.com pays some fee, they could end up with privileged bandwidth over, say, globeandmail.com. This is precisely the kind of thing ISPs will be doing.

    I’m not clear on why neutrality as most people understand it can’t be legislated without some of the more intrusive powers. I agree that after-the-fact is the better way to deal with most criminal and some regulatory infractions. Disallow throttling and all other steps that shape services. Leave the rest to the market. If the government wants uneconomical investments made in rural areas, then the government will have to fund it or legislate it transparently.

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