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Essay: Understand Net Neutrality, Free Market Internet Economics and Impact on Consumers

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  • Reading time: 6 minutes
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  • Published: 1 April 2019*
  • Last Modified: 23 July 2024
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  • Words: 1,542 (approx)
  • Number of pages: 7 (approx)

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In 2015 the Open Internet Order was passed by the FCC, reclassifying internet access under Title II of the Communications Act, effectively putting net neutrality in place (Reardon). Net neutrality, simply put, is the act of providing equally fast internet to everyone. No matter what company a consumer uses to access the internet, that ISP, or internet service provider, cannot favor one website over another. With net neutrality in place, consumers are able to access any and every website they want, and internet service providers cannot block or limit access to a website that may compete with them or that has information that they disagree with. For consumers, this means that internet access is unaffected by corporations and their intentions, and an ISP cannot make a company pay to have their website unblocked or unrestricted, nor can the ISP make the customer pay more to have access to a specific website.

Another part of net neutrality is that internet service providers cannot create “fast lanes” for websites. A fast lane means that an ISP could make a company, maybe YouTube, pay the ISP money so that YouTube’s speed is increased on that ISP’s networks (Bray). Tempted to give users a better experience, YouTube may agree to pay this extra charge, which can lead to a cycle of price hikes and exaction. As John Oliver says, “for the first time for internet providers like Comcast and Verizon to charge tech companies to send content to consumers more quickly.” With net neutrality, fast lanes are not allowed, and an ISP company cannot extort money from a website to provide faster speeds for consumers.

The third main part of net neutrality is the blockage of throttling. Throttling is when an internet service provider intentionally slows down a website or service for consumers. Similar to fast lanes, throttling can be thought of as a slow lane. With throttling, an ISP, say Verizon, could make a competitor’s website much slower, without asking them to pay more to bring the speed back to normal. An example of this could be Verizon making Comcast’s website extremely slow, so current Verizon customers do not have an easy way to switch over to Comcast’s services. ISPs could also potentially throttle popular websites like Netflix and YouTube, and then demanding extra payment in order to restore the lost speed. This practice is essentially illegal as long as net neutrality is in place.

Therefore, there are many ways that net neutrality is beneficial for consumers.One main part of net neutrality is that consumers will have equal speeds for every website. As a customer of an internet service provider, a person pays for a subscription, usually monthly, for a desired speed of internet, and they then get that speed for every website. This is good for consumers because they get equal access to any website they wish to access, no matter what the topic of the website is. Along with paying a flat price for their internet speed, consumers also pay that flat price to gain access to the entire internet. With net neutrality in place, an ISP cannot discriminate against a specific website and not provide customers with access to said website. With this established, consumers are assured that the internet is fully open, as it has been for all of its existence.

Finally, with net neutrality, internet providers cannot create a fast lane for websites. If, for example, Verizon wanted to create a fast lane for Netflix, they could go to Netflix and ask for a large sum of money so Verizon users would get faster speeds on Netflix’s website. The issue of this is that Netflix might opt in to this fast lane, but then could increase their costs, resulting in more money out of the pockets of Netflix users, whether or not they even use Verizon for their internet. This can be extended further with ISPs potentially taking action against individuals. If a user is openly critical of a certain company, the company could possibly retaliate, restricting that user’s internet access or even restricting the speeds of the website that hosts that user’s opinions (Comcast throttling Twitter’s speeds for not blocking anti-Comcast users, for example).

We’re already starting to see ISPs take advantage of the possibility net neutrality repeal, however. From 2014 to April 26, 2017, Comcast’s net neutrality webpage specifically listed that “Comcast doesn’t prioritize Internet traffic or create paid fast lanes,” an ideology that Comcast was not afraid to assert in 2014, when then-President Obama outlined a plan for an open internet. However, this all changed when on April 26th, Federal Communications Commission Chairman Ajit Pai announced a plan to, as Cecilia Kang of The New York Times says, “loosen the government’s oversight of high-speed internet providers, a rebuke of a landmark policy approved two years ago to ensure that all online content is treated the same by the companies that deliver broadband service to Americans.” In short, the FCC chairman made public plans to repeal net neutrality. Following this announcement, on April 27th, Comcast changed their net neutrality webpage, specifically excluding one line, which happened to be their line about paid fast lanes and prioritization. Before the final decision has even been made, some ISPs are already scrambling to prepare for the possibilities that come with a potential repeal. However, with all the commotion that comes with any argument, it is important to consider both perspectives, and there are some reasons as to why the internet may be better without net neutrality.

In economics, a free market can be defined by a system in which goods and services are given value and exchanged among an open market and consumers, all without any intervention from government or other authorities. In recent years, the internet has become a topic of debate, mainly focused on whether it should be regulated as a public utility or left to regulate itself through the practices of ISPs and the consumers themselves. In the past, we have seen bipartisan support of an economy based on the idea of a free market, and as John Hudson of The Atlantic points out, the abolishing of net neutrality “continues Congress’… policy to keep the ‘competitive free market… Internet… unfettered by Federal… regulation.’” Without a repeal, we may never get to see the benefits of a free market ever apply to the internet.

With net neutrality in place, consumers pay one price for access to all of the internet, no matter what websites they use. If a consumer only uses the internet for email sites and news sites, they are still paying for access to streaming sites, social media sites, and more categories of websites. Without net neutrality, a consumer can build a plan so that they only pay for the categories of websites that they use, which may reduce their subscription costs.

In addition to customizable website service plans, ISPs can create internet plans that give different speeds on different sites. Currently, customers pay for a flat speed across every website. Without net neutrality, ISPs could create plans that give high speed to websites that need high speed, like Netflix and YouTube, while providing lower speeds to sites that do not need fast speeds, like a local store or community website. With the current laws in place, ISPs must provide the same speed on every website to consumers, potentially saving resources.

Another reason that net neutrality should be abolished is so the government and consumers can see how the internet will work without it. Nobody knows how internet service providers will deal with the removal of the current regulations, so as Julian Sanchez of The New York Post says, one option is to remove the legislation and see how it plays out. If the internet gets too out of hand and makes it bad for consumers, then the public can urge the government to create new laws that protect consumers. Although this approach could potentially backfire and lead to other problems, it would be a learning experience for ISPs as well as consumers.

As of today, net neutrality is being heavily debated. On December 14, 2017, the FCC will vote on the Restoring Internet Freedom Order, which would effectively roll back net neutrality regulations put in place in 2015. There are many people against this roll back, and almost 20 million people signed petitions and sent open letters to Ajit Pai, the FCC chairman who introduced this roll back, asking him to keep net neutrality in place. In reality, even if December 14th comes and net neutrality is abolished, the internet will not change immediately. Internet service providers may be weary to quickly change their plans, and many consumer advocate groups may go to court over the repeals. It may not be likely that there will be major changes in the next year after net neutrality is finished. The big internet giants like Verizon, Comcast, and AT&T are largely in favor or removing net neutrality, as they see it as a way to increase their profits, by charging customers more for the same access they have now. Whichever way the FCC votes, the future of the internet lies in their hands, and its effects will be felt for months to come.  

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