The Future of Internet Regulation

By Arthur Chang  (PO ’20)

The internet is not typically thought of as highly regulated. Nevertheless, the Federal Communications Commission (FCC), which regulates the internet in addition to other aspects of interstate communications, is currently entangled in a heated debate over net neutrality and a free market for internet.

Net neutrality is the principle that internet service providers (ISPs) must treat all data and content the same. This means that ISPs are required to provide completely open networks and cannot block, differentiate, or discriminate against any content that they transmit. Net neutrality prevents ISPs from charging additional fees to those who are willing or able to pay for access to increased data transmission speeds. Allowing such price discrimination would effectively create separate fast and slow internet lanes. Furthermore, the policies of net neutrality prohibit ISPs from intentionally blocking or slowing down specific content. In the past, internet providers have blocked or slowed access to the data of their competitors as well as content that required a significant amount of bandwidth.

In 2007, it was discovered that Comcast, the largest cable company in the US, had been delaying and even blocking traffic to the peer-to-peer file-sharing application BitTorrent. The FCC ruled that Comcast had acted illegally in inhibiting equal internet access, attempting to set a precedent that ISPs must treat all content equally. However, this ruling was overturned by a court of appeals on the grounds that the FCC did not have the authority to regulate internet providers under Title One of the Communications Act of 1934. Eventually in 2015, broadband was reclassified as a common carrier, which granted the FCC authority to regulate the networks of internet service providers. Later that year, the FCC passed the Open Internet Order, which barred ISPs from “blocking, throttling, and paid prioritization”. Additionally, it ensured transparency for internet consumers of the services provided by ISPs.  The internet regulations passed under the Obama administration were upheld by the D.C. Circuit Court of Appeals in 2016 and are still currently in effect.

Supporters of the net neutrality rules argue that abandoning such internet regulation would be detrimental to both business and consumers. They contend that a lack of an open internet will allow network owners to unfairly block access to the internet content of their competitors, which has happened in the past. It will also hamper the success of smaller businesses and internet startups who lack the funds to pay additional charges for “fast lane” access. Furthermore, consumers may be forced to pay higher fees for the content they want. One industry of particular concern is the streaming business; without the FCC regulations, some streaming services may suffer slower download speeds, or be forced to charge higher prices as a result of competition with content created by ISPs.

Opponents of net neutrality assert that regulation discourages investment and stifles competition. They believe that these laws will dissuade internet service providers from building out their network and growing their infrastructure. They argue that a free market is most beneficial for the growth internet companies. Supporters of deregulation point to the lenient policies in effect under the Clinton administration, which they believe allowed corporations such as Amazon and Google to thrive.

Under new leadership, the current FCC is now attempting to dismantle the net neutrality rules that the committee had previously implemented. Recently appointed FCC Chairman Ajit Pai is leading the charge to decrease regulation of the internet and replace the policies enacted in the Open Internet Order. Although no complete plans have been made public, speculation suggests that Pai is considering lifting bans on blocking specific content and allowing people to pay more for fast lanes. Furthermore, the FCC may be contemplating whether or not to retain the ban barring ISPs from delaying the traffic for certain costumers and usages. However, it is believed that the FCC will continue its demand for transparency from ISPs, obliging them to notify their customers of their broadband access and the network decisions. Another possibility is that Pai will look to reverse the designation of broadband as a public good, which would cause the FCC to lose the authority to regulate the networks of ISPs. The FCC reportedly plans to vote on the matter in December of 2017, and it is likely that anything Pai proposes will be passed. However, as with the rule changes implemented in 2015, any new laws will be challenged in the courts. Regardless of what decisions the FCC makes, the ubiquity of the internet ensures that the effects of any change in regulation will be felt by consumers and businesses alike.

 

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