Net neutrality it is. Most Americans have slow, expensive internet, telephone and TV subscriptions. It’s what we know, but it’s frustrating. Oh yeah, most people also get the aweful customer service that goes along with their slow expensive internet. My personal experience with Comcast has been painful; involving hours on the phone and getting handed off from one agent to another.
How did we get to this deplorable outcome? Corporations in an unregulated market arranged the system to be as it now is. And those few large internet service provider (ISP) companies are profiting hand over fist. They are not investing in innovation or any of the other things a “free-market” is supposed to produce. They have an iron fisted oligopoly in place and have donated plenty of money to political campaigns to keep their oligopoly alive and well.
So all of that sounds ugly, yet that is where we’re at. It is mostly the result of a new market that has evolved very quickly and corporations that were unencumbered by regulation. That unregulated market helped to get the internet up and running in the United States in a fast, reasonably efficient way. The ISPs were making big profit margins right out of the gate, which encouraged them to aggressively develop their market. It’s the way they developed the market that is now the problem.
As I write this, (February 26th, 2015) the FCC is voting on new rules to regulate the internet and it is widely believed the political makeup of the FCC voting committee is structured in such a way that they will approve a “net neutrality” approach to the internet. I’ll say a little more about what those rules are and what “net neutrality” is about later in this post, but for the moment let’s look at what the politics are all about.
Internet Politics Taking Form
There was a time (the 1990s) when the companies building out the internet were the biggest companies involved with the internet. Setting up that infrastructure was similar enough to telephone and cable television development that there were companies ready to move forward. Those early internet construction companies eventually became the ISPs. There is a little more to it than what I’m presenting and there are new types of routers and other equipment involved, but the activity of these companies was and is familiar – not to dissimilar to telephone companies. The familiar pattern allowed them to grow up quickly.
Their politics were the politics of the internet in the United States and as I mentioned above, the results are less than glorious – far less. One of the problems was the users of the intent infrastructure weren’t large enough, or coordinated enough to oppose any of the ISPs actions – there really wasn’t much push back.
In the last 10 years things have changed. There are now more than one or two large internet companies other than the ISPs – think Google, Facebook, Amazon and Ebay. There are also many many smaller internet companies who use internet tubes, which is slang for internet infrastructure: companies like Etsy, Tumbler, Netflix, Canva, Twitter, Digg, Pintrest, Reddit and BoingBoing.
The F.C.C. vote that is occurring today was prompted by events that happened a year ago and even longer back. By early 2014 the large ISP companies had worked with their lobbyist to encourage the F.C.C. to embrace a policy allowing internet service providers to differentiate their fee structure based upon how fast the internet broadband speeds they offered were wet at. In other words, you wold have to pay extra to gain access to the fastest internet usage infrastructure.
That differentiation of pricing is what the term “net neutrality” is all about. Once the ISPs are charging different prices to different customers based on the speed of internet use, the internet becomes a very unequal place. What if some people could buy the right to drive much faster on the highways? Would that make sense in society?
A collection of smaller internet companies joined forces and began to attack the F.C.C.’s pending program for rate differentiation. Mozilla/Firefox, Twitter, Etsy, Netflix and Tumbler are a few of the companies that joined together to strategize how best to stop the F.C.C. from moving forward in the direction they were headed and instead revise that plan. They started working together in April 2014 and by November there were almost four million public comments made by phone calls to the F.C.C.
By the end of November President Obama had taken note and entered the fray. The President began to publicly pressure the F.C.C. To rethink their proposed “fast lane” regulation posture and embrace a far more equal approach. That more equal set of rules is what is being voted on at the F.C.C. Today.
Not only is this an impressive political turn around for internet operation policy in the United States, it seems that it is also a first volley in the development of internet politics. Internet corporations are now willing to engage in a political dialog to shape internet policy. It’s not a gentlemanly dialog, it’s a mud fight played out with surrogate lobbying forces, but it’s the beginning of drawing up workable sides of opposition in a policy debate that effects almost everyone in the U.S.
The New Rules
The debate is over a lot more than the immediate “net neutrality” rules in front of the F.C.C. today, the debate is over the speed and cost of the average American’s internet service. As I mentioned in the opening paragraphs of this post, America has comparatively slow expensive internet service that is accompanied by generally awful customer service. That’s what is really at question here. The specifics of the new rules are about a battle in a larger war.
Having said that, here, in brief, are the specifics of the new rules – which, I just checked, are now a done deal, the F.C.C. Vote was 3 to 2 in favor of adopting them. The speed of high-speed broadband service in the U.S. was previously defined by the F.C.C. As download speed of 25 megabits per second or faster. Now that is not a particularly fast download speed: in Europe download speeds of 75 and 100 megabits per second are common, as are they in many Asian countries. The U.S. is slow – officially slow.
To speed this up requires better infrastructure and the ISPs are currently not constructing that better infrastructure. Conservatives who tend to support the current ISPs say the best way to get better infrastructure is to foster competition by using a free-market that encourages companies to compete. That has not worked out at all, and if you think about it, bigger companies result from free-market competition as the smaller companies are absorbed in mergers or forced out of the market altogether. Instead, free-market competition produces oligopoly and the one thing big companies avoid most aggressively is competition.
The F.C.C. Rules that were adopted today move the internet, at least for now, towards a utility-type regulation called Title II. The old telephone monopoly, before AT&T was broken up, was a Title II regulated utility. The government controlled rate setting and AT&T provided the technology improvements of the telephone infrastructure.
Eventually, AT&T was moribund. They were not willing to aggressively pursue new technology and build out new infrastructure. That’s what led to the breakup of the phone monopoly in 1982. Since then, a great deal of competition and innovation has occurred that was precipitated by the opening up of a free-market. It seems that the nature of utility services are they swing back and forth between abuse by monopolies and then abuse by over regulation, or outdated regulation that no longer applies to the advance of technology.
It looks as if we are on the cusp of a new swing in the regulation of a publicly available utility service. I’m pleased with the outcome for now. I don’t expect it to be satisfactory for everyone, so there is going to be a longer struggle over these very issues. Eventually, things are likely to swing back in the direction of deregulation, but for now let’s see if F.C.C. Regulation can’t stimulate lower rates and faster internet service for the American consumer. I hope it works.