My name is Matt Friedman, and I own SMB Logic. I am also a loud and prolific advocate for Net Neutrality, and there is an excellent reason for this. So many people don’t really understand what net neutrality is about and confuse net neutrality with broadband access speed trends. I wanted to take a moment to help better position what net neutrality is, why it is important to everyone, and how it goes far beyond just broadband speed access.
What is Net Neutrality?
Net Neutrality is about what ISP’s are allowed to do with your connection data and with your access to third-party services. It is the principle that all data traversing the web should be treated equally and without bias, specifically, bias from the internet service provider(s) involved in connecting point A to Point B on the web.
What has precipitated Net Neutrality to become an issue?
History has shown us time and again that ISPs and telecoms are willing to unethically manipulate connection data and block access to competing services when it serves a particular profitability interest for them. Regulatory enforcement measures such as net neutrality help to ensure that Comcast and the likes of are never again allowed to selectively throttle their own customer’s access to a competing service as they did in the 2013/14 Netflix net neutrality violation and extortion incident “Netflix, would be a shame if something unfortunate was to happen to your business… Pay us millions of dollars or else when your clients try to connect to your servers through our network, it’s not gonna work so good”, and countless other similar conflicts of interest net neutrality violations as well. It is intended to prevent telecom companies from attempting to stifle threats from new and better competing service offerings from innovating startups in pursuit of maintaining their own favorable status quo.
Monopolies and Oligopolies aren’t good stewards of consumer interest
For the most part, ISPs are Oligopolies. There is very little competitive choice even within major markets, and substantially fewer options in rural markets. Even in major markets, durable infrastructure ISPs have territorially segmented themselves apart from one another, further limiting practical choice and competition. These are all bad things for consumers. Beyond just the issue of monopolistic concern though, we also have to contend with the troubling fact that the major ISPs are also complex multifaceted national and international conglomerate companies. Many of them also derive revenue from ownership holdings in lucrative content production and content distribution lines of business in addition to the core service of providing internet connection infrastructure to the content and services you choose to use. You can and should be able to easily see where the adverse incentives arise against treating data equally, and why these conflicts of interest and historical instances of net neutrality violations have occurred, as well as how damaging this is to consumer choice and consumer interests.
Still a little unclear on this? How about an analogy?
In principle, you pay for a bandwidth pipe to connect you to the internet. Within reason and bandwidth limitation, you should be able to do whatever the hell you want with it… Let’s continue this with a plumbing analogy. Imagine the internet was your water connection. You could probably agree that it should be between you and the service utility to decide what size of pipe and flow volume of water you want to have to come into your premises. Maybe you only need enough water to shower and do laundry and cook for one person on a daily basis. Maybe you have a family of 6 and you need more water. Maybe you are running a laundromat business, and you need a much bigger pipe with significantly larger flow rates to accommodate your business’s usage demands. In each of these cases, you, as the consumer, get to go to the water provider of your choice and regional availability and select between the various service offerings they sell to choose the one that suits you most. Where it becomes problematic is when the utility you’ve chosen then tells you, “Yes, you are paying for this pipe and this flow rate with us, but because we also own Greatflow Valve Co. we have a preferred interest in seeing our customers use their products too. Since you have Awesomeflow Co. valves on your sink fixtures, we are going to install governors on every Awesomeflow valve you have. The governors will restrict the flow to a few drops per minute to all non-Greatflow Valves… unless you would like to upgrade to our premium water service, which includes full flow service to non-Sloan valves.” In an ideal world for this fictional utility, they would get to profit from you buying the service, and from you buying their merchandise from their subsidiary valve company and using their entire goods and services ecosystem. In reality, though, we all know that that’s not how the free market should work. You, as the consumer should be allowed to choose how much you need and through which appliances and infrastructure you use the services for. Their two lines of business don’t intersect. They shouldn’t be conflated by the utility to artificially inflate profitability and competitively hurt their competitors, Awesomeflow Co., the consumer, and their customer’s freedom to choose.
The Legislative Issues
Net neutrality regulations previously under title II of the communications act weren’t burdensome on telecom operations, nor did they have significant regulatory compliance requirements. They simply provided a legal framework for the FCC (the watchdog agency tasked with presiding over public communications interest and welfare) with a means to enforce against ISP malfeasance and to provide a standard code to telecoms through which to operate.
Without title II oversight or another relevant piece of legislation, there is no federal agency with any delegated authority to enforce and hold companies accountable to violations such as the one I detailed above. The FCC has unwritten its own authority to enforce on this aspect of public communication and public interest, and the FTC doesn’t have presiding capabilities to enforce against anything that has been included in an End-user License agreement or terms of service document. The obvious problem here being that end users don’t get to have any input on the giant legal document that everybody clicks agree on to be able to use whatever it is that they are trying to use. Also, and because of oligopoly, there aren’t really any meaningful choices between companies available to consumers. An ISP could draft a contract that stipulates whatever they would like to do and because there aren’t significant competitive market choices with our ISP territorial oligopoly structure, there is little consumers can do about it themselves, and because it is published as a Term of service, the FTC cannot enforce against it as well.
The Take Away
Net neutrality is about protecting our free market principals and ensuring that as future generations of positively disruptive technology and services emerge, they can’t be unfairly stamped out by the infrastructure providers that might have holdings in interests threatened by that innovation.
