Net Neutrality Returns
Net neutrality is back in the news. But not in a good way: an appellate court has ruled that the FCC has no authority to force cable companies to treat everyone's web traffic equally:
The decision, by the United States Court of Appeals for the District of Columbia Circuit, specifically concerned the efforts of Comcast, the nation’s largest cable provider, to slow down customers’ access to a service called BitTorrent, which is used to exchange large video files, most often pirated copies of movies.
After Comcast’s blocking was exposed, the F.C.C. told Comcast to stop discriminating against BitTorrent traffic and in 2008 issued broader rules for the industry regarding “net neutrality,” the principle that all Internet content should be treated equally by network providers. Comcast challenged the F.C.C.’s authority to issue such rules and argued that its throttling of BitTorrent was necessary to ensure that a few customers did not unfairly hog the capacity of the network, slowing down Internet access for all of its customers.
The BitTorrent issue is probably not the best way to understand the real problem here. After all, Comcast has a legitimate interest in making sure that traffic runs smoothly on its network, and throttling bandwidth hogs might be a reasonable way to do that. Rather, the problem is that once you lose the general principle, the next likely step is a lot less benign. Matt Steinglass of the Economist explains:
The writers at this blog don't really care about today's appeals court ruling, which concluded that the FCC lacks authority to regulate net neutrality. Why should we? The paper will pay whatever Comcast or any other connectivity provider charges to make sure our bytes get out to the masses at a reasonably high speed. At least, we think it will. Unless the Financial Times or Forbes offers more. Then the magazine will have to ante up, or face discriminatory second-class service. Perhaps Comcast will start demanding "ultra business elite" fares on our packets if we expect them to reach that last mile just as fast as those from the FT. Then, of course, they might offer the FT the Sapphire Express rate on their packets, with an absolute guarantee that packets will arrive faster than the competition.
As much as such services are worth to us, they'd obviously be worth vastly more to Bloomberg or Dow Jones. A guarantee that time-sensitive financial information will arrive milliseconds ahead of the competition can be worth billions when you're trying to move markets. How could a last-mile connectivity provider possibly explain to its shareholders a decision not to take advantage of this opportunity, to offer "priority packet service" to time-sensitive information companies and induce them to engage in a bidding war?
I've long thought that broadband suppliers have at least half a case to make against pure net neutrality. There really are certain services, such as on-demand video streaming, that require lots of bandwidth and extremely reliable delivery. Charging extra for that is pretty defensible.
But where do you draw the line? Historically, when common carriers are allowed to discriminate, the result is pretty disastrous for everyone except the folks who currently dominate their market. So if you have a startup search company that outperforms Google, but only if it's as fast as Google, well, what are the odds that Google won't pay to make sure that its service is always faster than yours? Sure, their motto is "Don't be evil," but who knows if they'll still consider that kind of thing evil when the crunch comes?
Not me. All I know is that a free and open internet has worked pretty well, and we abandon it at our peril. With any luck, then, today's court ruling will actually be good news because it will spur Congress to do something legislatively instead of simply relying on FCC rulemaking. Internet providers ought to have a procedure they can go through to petition for tiered service for specific applications, but equal access should always be the default. They should be allowed to diverge from that only occasionally, only under specific conditions, and only after plenty of public comment. Markey-Eshoo is probably a pretty good place to start.