Under pressure: Is it now make or break for net neutrality?
Internet

Under pressure: Is it now make or break for net neutrality?

When Netflix CEO Reed Hastings called out US ISP Comcast for “taxing” the internet in 2014, few would have expected him to suggest it’s now someone else’s fight. Netflix’s stance on net neutrality has certainly cooled. Speaking with CNBC in May at the Code Conference in California, Hastings said net neutrality was “no longer a priority” and called for the current startup community to pick up the baton.

“We had to carry the water when we were growing up and we were small,” Hastings said, “and now other companies need to be on that leading edge,” reported Recode.

It’s understandable, to a certain extent but is it right? Surely the now all-powerful Netflix – it currently has around 98m global streaming subscribers, according to Statista – is needed more than ever to ensure an open internet? Think of the clout it can bring.

Last month the FCC in the US decided to overturn the 2015 regulation that protected net neutrality in the US. It was a vote along political lines with chairman Ajit Pai (a Republican appointed by President Trump in January) and commissioner Michael O’Reilly (also a Republican) voting to repeal the ruling. Democrat Mignon Clyburn voted against the repeal while it was revealed recently that thousands of stolen names were used to criticise net neutrality as part of the consultation process. It’s all got a little messy and we haven’t finished yet. The ruling could be challenged in the courts and even go to congress. Be prepared for this one to drag.

So what does it all mean, if anything? If it goes through, the ruling means that ISPs in the US are free, in theory, to create fast and slow online content lanes determined by who can and cannot pay for bandwidth. They can prioritise and even block content. What will this look like? We are not entirely sure yet although you could try the Removal of Net Neutrality Simulator (for Google Chrome) to get a taste.

 

Of course, this could just be a US thing. Will the rest of the world be affected?

Yes, is the general consensus, although not immediately.

“We’ll see more pressure on regulators to adopt the US measures, as operators and content providers lobby for less regulation,” says Martin Morgan, VP marketing at Openet. “Operators have paid huge sums of money for spectrum and invested in rolling out 4G networks. With data becoming commoditised they’ll be looking for more innovative ways to deliver content services.”

To do that they will of course have to keep a close eye on what’s going on in the US. Michael Hekimian, a legal director at law firm Ashfords says that the US will now become the “acid test” for new business models and in particular any alternate pricing models. If ISPs and content providers manage to improve services to consumers without raising prices and being anti-competitive then expect to see pressure on global regulators mount.

According to Ronan Kelly, CTO for EMEA and APAC at ADTRAN, this should be a positive move as it will not mean anything detrimental to existing services and performance.

“In essence, you can’t degrade the network but you can upgrade it,” says Kelly. “Specialised services can be prioritised to permit the offering of new service guarantees, and ultimately opening up new sources of network monetisation. This is all predicated on the understanding that there is sufficient network capacity to provide these new guaranteed services, and it doesn’t detrimentally affect other users’ quality of internet access.”

 

Will Brexit see the UK pursue its own regulation?

For the moment, at least, the EU’s rules on net neutrality (open internet) still bind the UK but as we know, Brexit will see the UK extricate itself from EU law, leaving it free to determine its own regulations. According to Hekimian, there are a lot of “headaches and hassles” waiting for regulators as a result of Brexit, including being out of the European Data Network.

“There will be ripples from businesses and ISPs that will start to push the UK away from the EU without a conscious effort to keep them together,” says Hekimian. “Expect to see more lobbying of government from companies with vested interests.”

Hekimian adds that mobile operators will play a role here as they are already some way down the road to implementing data policies to cover the European Data Network. Morgan at Openet agrees that Brexit “could get messy” but adds that as UK telcos are implementing EU legislation – e.g. roaming, “it will be very hard to overturn these moves even when the Brexit divorce papers come through”.

 

Is the idea of a two-tiered internet really so bad?

There is an argument that the removal of regulation allows for more choice and better services but is this true?

“The question is, better for whom?” says Nathan White, senior legislative manager at the Global Net Neutrality Coalition. “Without net neutrality rules, telecoms will have innovative ways to charge you more money. And they can ‘double bill’ by charging you for access to the internet, and also charging edge providers access to you the customer. And taken with the loss of broadband privacy rules, they can sell your private traffic information to advertisers. That’s all ‘better’ for big corporate profits, but it’s bad for consumers who will pay more money for worse service.”

For Morgan, he believes there will be more choice for consumers and that it could make the internet accessible to more people by offering “ad-funded or government-funded access” to countries or regions with costly services. We’ve already seen this to some extent with Facebook’s Internet.org in India and Wikipedia Zero in Africa but it’s hardly a core argument for cutting regulation. Rightly or wrongly Facebook and Wikipedia have taken a unilateral stance but Jimmy Wales, Wikipedia’s founder and CEO at least has said that as the African market grows more mature and ISPs become more developed, there will no longer be a need for Zero and a two-tier structure.

Kelly says that for ISPs, the removal of net neutrality “brings a total step change in how to monetise the network and prevent it from becoming a ‘dumb pipe’”. He adds that the telco industry could adopt a platform model, rather than the traditional pipeline model, to generate income from application providers and not just users.

That’s a tough sell to consumers. The idea of improved services is an intriguing one. Of course, we all want improved services but no one is surely naïve enough to think that it doesn’t come at an extra cost. If content providers are having to pay for more bandwidth to offer quality video streaming, for example, the cost will surely be passed onto consumers? Yes, ISPs get a new revenue stream but ultimately it will be the consumers that foot the bill, or at least the ones who can afford to pay for new premium services that will no doubt be offered. If you can afford to sit in the ‘first class carriage’ this may not be a problem but you do get the sense that this is all about profit and less about choice for the many.

“It’s bad for startups too,” says White, “who can’t afford to pay the ‘fast lane’ toll for access to potential customers. And it’s bad for the economy, because it rewards the entrenched players at the expense of newcomers, crushing the innovation that could give us whatever the next big thing will be.”  

That’s a good point. White adds that high speed connectivity and net neutrality also go hand-in-hand, so this is not about impacting 5G or any on-going telco innovation either. If anything, it does seem a potentially damaging backward step. Yes there are some arguments for changing the rules but as yet, there is nothing to instil trust in ISPs that they will be loyal and faithful guardians of the internet for all users.

So what does the inventor of the internet think? He should know.

“The FCC’s announcements suggest they want to step back and allow concentrated market players to pick winners and losers online,” wrote Sir Tim Berners-Lee in a statement. “Their talk is all about getting more people connected, but what is the point if your ISP only lets you watch the movies they choose, just like the old days of cable?”

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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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