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Say Goodbye to the Internet As We Know It

The FCC is handing control to corporate America

Few topics of government policy spur outrage, but don't mess with my Internet is one. The Republican-controlled Federal Communications Commission (FCC) has upended yet another popular Obama administration policy by turning control of the Internet over to the corporations that provide access, allowing them to do with it as they please.

In just the week after the plan was announced by FCC
chairman Ajit Pai, the FCC received more than 200,000 phone calls in protest. Over 500,000 comments were left on the agency's website, adding to the 20 million that have come in since outlines of the agency's intentions became apparent earlier this year. (Obama's Clean Power Plan drew 4.3 million comments over six months).

A lunatic fringe shamelessly took its anger too far. The changes stirred threats of violence and ethnic slurs — Pai's parents immigrated from India — and daily protests in front of his house as far back as May, inexcusably frightening his wife and children ages 3 and 5.

Nevertheless, chairman Pai is resolute in defying public opposition despite there being no groundswell of support for the government ceding the Internet to corporations.

The FCC under Obama appointee Tom Wheeler established in 2015 the rule that required equal treatment by Internet service providers (ISPs) of all content, from e-mail to movies, delivering all to customers without preference given to any source, without slowing the one to speed the other. This simple rule was tagged "net neutrality". Mr. Pai calls it "micromanaging the Internet".

Under his plan, ISPs will be unrestrained, free to deliver the Internet to customers according to whatever preferential plans they devise. Internet providers need only be "transparent" about what they are doing. And the FCC would only monitor the companies to determine they are doing what they say they are. Proponents call this "restoring Internet freedom".

The legal right for the Obama administration to set the neutrality rule for ISPs was to declare broadband an essential public utility much like telephones and electricity. The White House, on the side of the communications companies, wanted the FCC to "roll back burdensome, monopoly-era regulations". In fact, the monopolies could become local. Many areas of the country have limited choices of Internet providers serving a given locale. The 2015 regulation at least imposed a standardized service, whereas the administration's changes gives those providers a monopolistic power to set their own rules in areas that have no recourse.

The Obama administration's tucking the Internet under the Communications Act of 1934 gave Mr. Pai an opening to regularly mock neutrality regulation as a Depression-era throwback — "Ma Bell" for a 21st Century industry. The Wall Street Journal said the Obama administration "regulates the web like an 1890s railroad". A vice-president at AT&T calls it "lumbering government intervention", unmindful perhaps that it was the government that was instrumental in the creation of the Internet.

The government and various universities such as MIT conceived of a "galactic network" of computers that could talk to one another which became a web that spans the world, an astounding creation that has thoroughly transformed how we obtain information and communicate with each other. Business was a beneficiary of this achievement; the government charged nothing for its use. Tim Berners-Lee, a computer programmer in Switzerland, created the World Wide Web and earned no royalties, whereas it was an opportunity eagerly adopted by businesses for developing profitable services. Yet in the attitudes we quoted, we see that corporations now somehow think the Internet should belong to them.

There is some irony in their name-calling, considering that the FCC itself was created by the 1934 Act. The statute and what it structured served the country unchanged for 62 years. It is still in force.

Ajit Pai claims the abuse Obama's neutrality rule was meant to curb was only chimerical. Yet the changes he is putting in place, allowing ISPs to do as they choose with the only requirement that they must report their policies, and most likely obscured in the fine print of their contracts, is what opens the door to abuse. If a company owner holds a certain political view, nothing would prevent blocking content or political commercials, actions not even apparent to customers. Comcast says, “We do not and will not block, throttle, or discriminate against lawful content — and we will be transparent with our customers about these policies”, but that's voluntary and nothing blocks profit temptation or management turnover from seeing that change.

Comcast, Verizon, AT&T, Charter and the others making up the dozen major providers argue that without the ability to introduce tiers of service at different rates, they have no incentive to innovate, to boost speeds, to build out their systems. “We need massive investment in networks going forward”, says Pai. “The infrastructure of the internet isn’t like slow-moving utilities. It’s not a water company."

Consumers in the millions have made it plain that they like the Internet the way it is. Yet in the face of protest Ajit Pai, knowing what's best for us, has said he is ending net neutrality "so that consumers can buy the service plan that's best for them". We will be seeing different plans at different rates emerge from the carriers. A basic plan that blocks favorites such as Facebook and Instagram will cost the least. A social media package will cost somewhat more. You say you stream movies? For that you need to buy the platinum plan. The Internet is destined to follow the cable television model as corporations seek ways to make more money.

Content companies such as Netflix will be told they need to pay extra to guarantee uninterrupted delivery of their streaming fare. Proof is that it's already happened. In early 2014, before the Obama administration stepped in, Comcast slowed Netflix downloads to a crawl. They extracted payment from Netflix and speed returned. Comcast has already indicated that it will resume that practice, charging content companies for fast downloading of their data once the Trump administration reverses the rules.

Mr. Pai showed an ideological mindset when he bypassed the 2014 Comcast incident, telling the Journal:

“The entire predicate of government regulation should be that there is, or is highly likely to be, a fundamental market failure that warrants pre-emptive regulation. That’s a sine qua non. But there was no evidence of that in 2015. The hypothetical harms that were discussed were exactly that: hypothetical.”

Major content creators and sources — Netflix, Google, Amazon, etc. — know this will be the outcome. They have been lobbying hard to halt the changes, foreseeing the ISPs becoming gatekeepers charging tolls to content providers and charging more to consumers at the other end. Conservatives consider this a standard free marketplace outcome — just how capitalism is supposed to work — and trust that it will self-correct through competition if any pricing structure gets out of hand.

Innovative start-ups and small companies don't see it that way. They will be disadvantaged, goes their argument, because they will be left in the slow lane for not having money enough to pay for the preferential treatment that the Internet giants can easily afford.

Five sit on the commission, three Republicans and two Democrats. The Republicans vote as one, so the changes are assured, no matter the public outrage. In a Journal profile last May (titled, "Why ‘Net Neutrality’ Drives the Left Crazy"), Mr. Pai was asked if the protests and public comments might deter him. His answer: "At the end of the day, I’m not going to be intimidated. No one is going to sway me away from the course that I truly believe is the right one for the American people".

4 Comments for “Say Goodbye to the Internet As We Know It”

  1. David Barnett, Ph.D.

    What does “Net Neutrality” mean? Do the current regulations with that label achieve it?

    When most of us, as consumers, think of net neutrality, our first thought is we don’t want our ISPs deliberately throttling certain kinds of traffic on its way to us. We don’t want any kind of deep inspection of the packets.

    On the other hand, there are certain applications where we would love to have absolutely minimal network latency (video chat, for example), and we also want the lowest price for our connections. One way of squaring the two is to prioritise packets of low latency applications, even at peak times. That reduces the need to build a lot of extra capacity.

    The other end of the equation is ISP services to commercial websites. This is where the existing FCC regulations may, paradoxically, harm real net neutrality.

    If you are a big enterprise, like Google or Amazon, you can afford to be your own commercial ISP connecting to the internet backbone. Google and Amazon don’t need to buy connections from anyone else and can priorities their traffic as they please without reference to the FCC – it is not a public utility.

    Small enterprises must buy connections via an ISP. If they have an application that requires low latency, the current regulations give them a stark choice – become their own ISP (like Google) or forget it. They cannot buy low latency from their ISP because the regulations won’t allow it.

    This is the general paradox of micro-managing regulation. The rhetoric supporting the regime pretends that it is “levelling the playing field” when, in reality, it is tilting the field in favour of the big guy.

    • From Editors

      Dr. Barnett is correct. Google, Facebook and the big hitters don’t go through the ISPs. They’ve used their muscle to bypass the ISPs and connect directly to the next level, the Internet Exchange Points or IXPs, whereby they can control their own traffic preferentially. We thought the issue would be getting too much into the weeds and left it out of the article, but he bested us by making it quite clear.

      We differ, though, in thinking this is a defect in the Obama scheme which could have been outlawed, and not micro-managing. We don’t see any remedy in the FCC hand-off; rather, it seems to consecrate an anti-competitive market where the big rule to the detriment of all others.

      Editors

      • David Barnett, Ph.D.

        One issue that needs to be looked at seriously is the domestic ISP franchise monopolies sanctioned by many local governments. This is a government caused anti-competitive practice.

        In general, government regulation should promote a competitive marketplace. There is a case for requiring performance information to be declared accurately and accessibly. For example expected peak time data-rates should be displayed in addition to the best time rates. Number of subscribers sharing a node should be noted. Whether the ISP uses throttling, latency optimisation etc. What premiums would be charged for enhanced performance of various kinds.

        This is also an area where organisations like Consumer Reports can spotlight shoddy and deceptive practices.

      • David Barnett, Ph.D.

        There is no remedy for the really big players being able to build their way round regulations. That is why regulations must be very carefully crafted so they don’t cement economies of scale.

        Smaller entities must be able to buy from service providers near equality with the big boys. Service providers, by aggregating the demands of many smaller entities can build this near equality.

        The overhead of complying with regulations must be small so that small businesses and small ISPs are not put at a relative disadvantage. That means simplicity.

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