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Basics of the Net Neutrality Debate

January 3, 2018

Updated June 12, 2018

For the last few months, the topic of net neutrality has appeared frequently in US newspapers, on cable TV news, in technology magazines, and around the internet itself. The focus of the discussion was the vote taken by the Federal Communications Commission on Dec. 14 to repeal certain regulations passed by that same body two years ago, when Democrats made up a majority of the commissioners.

The circumstances of the repeal irrevocably bound up the issue of net neutrality within today’s intense, mistrustful, emotional national political climate. As a result, public discussion of the issue became rife with speculation, personal attacks, and charges of bad faith, ignorance, or both.

Now that the FCC vote has occurred and the subject is, at least for the moment, settled, we at Net Friends are providing our customers with this short Explainer to help clear up any remaining misconceptions about the topic. The questions we wish to address are:

A short history of net neutrality regulation in the US

Between 2003 and 2010, a series of incidents became public in which an internet service provider (a category that includes cable internet providers, telephone/DSL providers, and wireless phone and broadband providers) blocked or slowed a particular kind of traffic on its network.

Sometimes the content blocked was that of a competitor; sometimes it was a type of traffic, such as streaming video, that the provider deemed undesirable for various reasons. Many people found these incidents troubling and asked the FCC to take enforcement action to prevent ISPs from engaging in this discrimination. The FCC did open enforcement actions against some of these providers.

However, some providers that the FCC had ruled against appealed to federal courts, arguing that the FCC did not have jurisdiction to prohibit these practices. In Verizon v. FCC in 2014, a court ruled that the FCC would not have such jurisdiction unless it reclassified these ISPs as “common carriers” under Title II of the Communications Act of 1934 (the act of Congress that created the FCC in the first place).

The following year, the FCC voted to reclassify ISPs as common carriers, and under this reclassification it banned two practices:

In 2017, following a change of presidential administrations and the appointment of new FCC commissioners, the FCC voted to reverse the Title II reclassification, and by implication to lift the prohibitions on blocking, throttling, and paid prioritization. However, it did rule that ISPs must disclose “to consumers, entrepreneurs, and the Commission,” whenever they implement such practices.

The repeal of net neutrality rules took effect on June 11, 2018, following an unsuccessful attempt to overturn the decision in Congress.

Arguments against repeal of the 2015 net neutrality rules

Nominally, the debate over net neutrality is about whether ISPs should be required by law to treat similar traffic (data, voice, video) similarly regardless of where it comes from or where it’s going. But there were three factors outside this narrow question that caused the debate to become a focus of public and media conversation in the weeks leading up to the Dec. 2017 FCC vote to repeal the 2015 net neutrality rules (titled the “Open Internet Order” or OIO):

Arguments in favor of repeal

However, opponents of the OIO raised concerns about the justifications for the ruling as stated above. In particular, they argue that:

The bottom line is that, in 2017, the net neutrality debate stood in for many other, less accessible debates in American politics – debates over ISP monopoly power, corporate control of media and speech, and whether open access to the internet is becoming a right due to all citizens. It was often difficult for advocates on each side to separate these questions, and many disagreed on whether they even ought to be separate.

What’s next for net neutrality?

North Carolina’s Attorney General, Josh Stein, is one of 18 state attorneys general who signed a letter, prior to the Dec. 14 decision, asking the FCC to reconsider repealing the regulations. Some of those states (including NC), have sued the FCC on the grounds that the repeal violates the Administrative Procedure Act, which prohibits agencies from issuing “arbitrary and capricious” rules. To succeed, the suit will have to overcome the so-called “Chevron deference” test, in which courts look to see “whether the agency’s answer is based on a permissible construction of the statute.”

On Dec. 19, 2017, Rep. Marsha Blackburn (R-TN) introduced a bill in Congress that would restore the ban on blocking and throttling, but prohibit the FCC from classifying ISPs as common carriers in the future. It would also pre-empt state-level net neutrality laws. The future of the bill is unclear.

In North Carolina, state Rep. Grier Martin, representing parts of Raleigh and Durham, has introduced HB 1016, which would require the state to procure internet services from ISPs who make commitments to principles of net neutrality. As of May 28, 2018, the bill has been referred to committee.

We’re not aware of any ISPs having issued any substantive policy changes in the immediate wake of the decision. Comcast, an ISP under close scrutiny in the net neutrality debate, is bound by a 2011 consent decree (related to its purchase of NBCUniversal) to observe rules similar to the 2015 regulations for at least another year anyway.

In a development related to the intersection of net neutrality and antitrust law, AT&T’s acquisition of Time Warner was opposed both on antitrust grounds and on grounds that AT&T may use the new regulatory environment to introduce restrictions or extra costs on consumers who wish to view Time Warner content through other service providers. On June 12, a federal judge ruled that the merger could proceed; analysts speculated that the deal would set off further vertical mergers between service and content providers (e.g., Comcast and Fox).

We will continue to monitor the situation and provide updates if there are any significant developments affecting our customers.

Click here to read Part 2 of our series on Net Neutrality

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