Net Neutrality: What is it?

Net Neutrality has garnered quite a bit of attention in the press recently and we thought it might be a good idea to look into it more closely and share our own position. The first thing we have to get through is defining what Net Neutrality is. We have our own perspectives and, although reasoned, it only represents what it looks like from our own filters and sources so by all means, this should not be viewed as your definitive source of information of the subject but simply food for thought. Those reservations aside, we believe there are two very different definitions out there and proponents on both sides of the argument are purposely clouding the discussion to make their positions stronger.

The Technical Side
The first definition is a technical one and relates to the ISPs (Consumer Internet Service Providers) and backbone network providers and how these companies share connections to their networks with each other. For many years, and for the first few generations of the internet, these sharing agreements were quid pro quo deals where most agreed to provide access to each other’s traffic and little to no money was exchanged. As the networks, content and user demands have evolved, the need for massive increases in capacity have risen as well. This need for added capacity led to a “middle man” industry that provides caching of content and access at network hubs, closer to end-user networks, to allow for improved speed and delivery performance. These “middle men” would broker their own deals with ISPs for access to their network. As the industry has evolved, both the ISPs AND larger content providers have gotten into the “middle man” industry to either save costs or grow revenues. Publisher companies that stream movies and other data-heavy content require more bandwidth so users can access that content seamlessly. ISPs want to charge those providers for that extra bandwidth usage because they are using more bandwidth than the ISP will ever need back from them--imbalanced quid pro quo. The ISPs want to charge a premium from the content provider for a priority or larger traffic lane. On the other hand, the content providers counter that the demand is coming from the ISP’s own customers, who have paid for a large amount of capacity to get this type of content, so demands for the content from those customers makes it an even split and therefore net neutral.

The Freedom of Information Side

For many Net Neutral advocates, Net Neutrality is the belief that all traffic, no matter where it comes from, should be treated the same. An ISP should not be able to provide higher speed access to their preferred content providers because that could limit and throttle the access of end-users to content that happens to be outside of those special relationships the ISP has. In effect, the ISP could be acting as a filter and censor. They point to an example of Netflix where ISPs slowed access to that content, causing problems with end-users, to squeeze more money out of Netflix for bandwidth. i.e. Blackmail.

President Obama Weighs In
On Monday, November 10th 2014, President Barack Obama asked the FCC to adopt Net Neutrality rules and treat internet access more like a utility. Until this point, the White House and Congress were playing their cards very close to the chest. Many in Congress have received big campaign contributions from parties on both sides of the issue. Although Net Neutrality has been around for years, with the President’s comments, it is now on the front page.

Our Thoughts
The pipeline that built the internet was built on the backs of public utilities so any arguments of “government interference” and “socialist policies” need to pump the brakes and get some perspective. Public utilities are quasi-private organizations that generate revenue AND collect government payments for their services. The public decided that having electric, water, sewage treatment and telephone service available to the hard to reach rural areas was beneficial enough to our society that it was supplemented by the larger group. Because of that added expense, the utilities required government protections from interlopers who simply wanted to serve the concentrated masses without the burden of the physical infrastructure that the utilities had to serve. The government obliged by creating a barrier to entry via regulations and requirements, and provided capital funds (via taxes) to support the infrastructure burden. In exchange, the utilities typically had to petition the governments to increase costs for their services.

Simplifying the Issue
In our view, net neutrality has to do with ISPs charging end-users on the front-end for high speeds and bandwidth AND then turning around and charging content providers on the back-end for that same bandwidth to reach those same customers. Two bites from the same apple if you will. In essence, net neutrality ensures that as long as ISPs are getting paid by their end-users for speeds and access, they can't turn around and charge content providers for that same access. The main reason why this needs to be addresses with legislative support rather than via the free market is because of the limited options for end-users to receive broadband in most areas of the countries. Those barriers to entry for competitors were set up while the ISPs were taking advantage of the publicly funded utility infrastructure. We know it is much more complicated than that and involves wholesale backbone access that is typically shared amongst providers, but it's the end-user customers that are causing the traffic imbalance with their requests for that content. Those same customers are also paying a premium to the ISPs for broadband access so the ISP should be the ones to foot the bill.