Net neutrality 101

President Barack Obama took a stand this week by calling for the Federal Communications Commission to preserve net neutrality by regulating broadband service like a utility.

In essence, preserving net neutrality would ensure that all consumers and businesses will have universal levels of access to a fast Internet, not just some preferred customers who would pay for “faster lanes” on the Internet.

“We cannot allow Internet service providers to restrict the best access or to pick winners and losers in the online marketplace for services and ideas,” Obama said in a statement released by the White House. “I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.”

However, industry groups that represent ISPs criticized Obama’s plan. “Such a move would set the industry back decades, and threaten the private sector investment that is critically needed to ensure that the network can meet surging demand,” the Telecommunications Industry Association said in in a statement.

Political opponents such as Sen. Ted Cruz (R- Texas) criticized the concept of preserving net neutrality. Cruz compared the plan to “Obamacare on Twitter,” saying, “The Internet should not operate at the speed of government.”

BizTimes reached out to our legal resources to help readers understand the concept. Attorney Michael Overly of Foley & Lardner LLP’s Los Angeles office answered the following questions about net neutrality.

BizTimes: Please explain the concept of net neutrality.

Overly: “Net neutrality simply means not preferring one type of content to another online. For example, not preferring the speech of a large corporation to that of an individual. Some say this is the entire basis for the Internet: allowing everyone an equal voice. Put another way, an Internet provider shouldn’t be able to stifle speech simply because it doesn’t agree with that speech (provided it is legal speech, e.g., not profane, defamatory, etc.) or to provide greater access and speed to speech for which it receives a higher fee. Consider: large businesses pay to have their content delivered at high speed, while individuals, who cannot pay higher fees, have their content throttled and delivered more slowly. This isn’t about how fast of an Internet connection one can buy, but rather decisions the Internet provider makes to prefer one type of content to another. A further example, many people have subscriptions to Netflix. Some internet providers decided to limit how fast movies from Netflix can be delivered to consumers unless Netflix paid additional fees to the Internet providers. As many proponents of net neutrality say, internet providers are attempting to put a toll booth on the information superhighway. Taken to an extreme, without net neutrality, an Internet provider could essentially determine who will be popular/successful online, rather than letting the public make that decision.

“Consider your telephone service. If you one day could not make or receive calls from a certain family member or business because your telephone company decided to limit their access or in the middle of a call you were interrupted to pay more money because you decided to discuss a particular topic, you would be extremely concerned. Some analogize the need for net neutrality to that situation. A phone company should not be able to limit who you can call or limit the content of what you might say in those calls. The same argument might be used in the context of the Internet. Currently, the law and regulations prevent these types of limits on telephone calls, but not the internet. What Obama is seeking is essentially a law that provides that protection in the content of the Internet.”

BizTimes: Why is President Obama in favor of preserving net neutrality?

Overly: “Net neutrality is tied to free speech and freedom of expression. President Obama wants to ensure the Internet is not used to discriminate against content. To accomplish that, he wants the Internet regulated to ensure internet providers cannot discriminate against one type of content over another.”

BizTimes: What are the arguments to be made against net neutrality?

Overly: “The primary argument is that the Internet providers (namely telecom companies and cable companies) should have the right to charge fees they believe appropriate to use their telecommunications facilities. That is, if they paid to create the network, they should not be limited in making decisions about how it will be used, more particularly, about the fees it may charge depending on the type of content offered. They could prefer content offered by businesses capable of paying higher fees and limit access to content by businesses that are unable to pay those fees.”

BizTimes: What/whom are in favor of preserving net neutrality?

Overly: “Most consumers and most large content providers (e.g., Google, Facebook, Netflix, Amazon).”

BizTimes: What/whom are opposed to preserving net neutrality?

Overly: “Telecom providers and cable companies.”

BizTimes: What is at stake for businesses and consumers?

Overly: “For content providers, like Amazon and Google, it means, potentially, having to pay additional fees to get their content to consumers. For consumers, it may mean increased fees to access preferred content and the loss of access to content for which the provider cannot afford heightened fees. For startups and other small businesses, it may mean loss of broad access to Internet users. For Internet providers, it means limitations on their ability to charge users based on their content and usage (e.g., charge more to Netflix because of the bandwidth it uses). While there are arguments on both sides, what, I believe, both sides can agree on is that more review is needed by the FCC to determine the best path forward. This is not a new issue. Net Neutrality has been a concern for many years. Now, however, as consumers and businesses become completely reliant on Internet access, the issue is coming to a head. Rushing into regulation is not in either side’s best interest, but delaying unduly in addressing the issue would be problematic. There are strong lobbies on both sides. That may prevent action for years to come.”

Steve Jagler is executive editor of BizTimes.

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