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Net Neutrality

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The idea of net neutrality has been around since the invention of the telegram and telephone system. This idea of neutrality led to the passage of the Communications Act of 1934 which regulates telecommunications by prohibiting preferential treatment and unfair consumer costs (The Communications Act of 1934). However, the term “net neutrality” as it pertains to the internet was first used by Tim Wu in 2003 in his article “Network Neutrality, Broadband Discrimination” (Wu, 2003).
In March of 2005, the concept became more well known when the internet service provider (ISP) Madison River Communications was caught blocking all of its subscribers from using a voice over internet protocol (VoIP) service called Vonage. The company blocked this service because their own telecommunications service was competing against Vonage’s lower prices, made possible by utilizing customers’ internet connections instead of telephone lines (Ante & Crockett, 2005). Vonage made a complaint to the FCC, and Madison River Communications had to pay a $15,000 fine (Regan, 2005).
Later in 2005, the FCC released an internet policy statement, which outlined support for an early version of net neutrality. This statement was meant to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet” by adopting the following principles:
• allowing consumers access to the lawful internet content of their choice,
• allowing consumers access to run applications and use services of their choice, subject to the needs of law enforcement.
• allowing consumers to connect their choice of legal devices that do not harm the network
• entitling consumers to competition among network providers, application and service providers, and content providers. (Federal Communications Commission, 2005) In 2006, the Senate considered a bill called the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006 which included protections for users’ free flow of information over the internet (Communications, Consumer's Choice, and Broadband Deployment Act of 2006). The bill was not passed. In February of 2007, Skype filed a request with the FCC to allow customers to attach any non-harmful device to wireless networks, just like they can with wired telephone networks (Reardon, 2007). The petition was denied by FCC chairman Kevin Martin in 2008 (Svensson, 2008). Later in 2007, Comcast began interfering with users’ abilities to utilize peer-to-peer (P2P) file sharing software called BitTorrent. BitTorrent is often used to illegally spread music, movies, and other copyrighted digital media over the internet. However, Comcast interfered with all P2P sharing in BitTorrent, including legal downloads of open-source software or works not covered by copyright, such as the Bible. Early allegations of P2P blocking were denied by the company (Svensson, 2007). Complaints were filed with the FCC, which sanctioned Comcast (Schatz 2008; Stone, 2008). Comcast appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit, which sided against the FCC in 2010 (Schatz, 2010).
In 2010, Google, a former proponent of net neutrality, considered an agreement with Verizon that would prioritize certain online activities for a fee. The agreement, which was opposed by the chairman of the FCC, was not adopted (Peralta, 2010; Scherer, 2010).
December of 2010 saw the FCC pass new net neutrality regulations prohibiting companies from interfering with internet usage, called the Open Internet Orders. However, the D.C. Court of Appeals had decided in the FCC’s case against Comcast that the FCC has no power to enforce these orders The rules were intended to take effect on November 20, 2011 (Melvin, 2011). Verizon fought the regulations throughout 2012 and 2013 and won the case in early 2014. The Court of Appeals found that the FCC had no authority to regulate the internet if the service was classified as information services- the FCC can only regulate telecommunication utilities (Zajac & Shields, 2014).
In the spring of 2014, the FCC abandoned the hopes of having all internet content treated equally, and began drafting new rules which supported the development of internet “fast lanes” where websites could pay to have their content prioritized, although internet content could not be blocked outright (Kang, 2014). On November 10, 2014, President Obama made a statement that the FCC should adopt the strictest rules possible to protect the internet as an open platform. He also stated that in order to allow the FCC to enforce those regulations protecting consumers, the internet should be considered a public utility like electricity and telephone service (Wyatt, 2014). The president’s statement and heavy lobbying altered the FCC’s original plan. The FCC will vote on their new plan, which may reclassify broadband as a public utility under Title II and thus under the FCC’s jurisdiction, on February 26, 2015 (Downes, 2015).

The FCC's Transition Regarding Net Neutrality and Status of the Latest Proposal .After several legal defeats during the early 2000's attempting to maintain total net neutrality, the FCC began drafting new rules in early 2014 which supported tiered internet plans. This may have been due to a change in leadership: Julius Genachowski, a strong proponent of net neutrality who was responsible for the failed Open Internet Order, was the chairman of the FCC from mid-2009 until November 2013 (Boliek, 2013). Genachowski was replaced by Tom Wheeler, who opted to allow companies freedom to create “fast lanes”, prioritize some internet traffic, and create tiered plans in early 2014 (Kang, 2014). The FCC's proposal was changed after President Obama made a statement on November 10, 2014, claiming that that the FCC should adopt the strictest rules protecting net neutrality. He also stated that the internet should be considered a public utility like electricity and telephone service and be held by common carriers (Wyatt, 2014). After this statement, the FCC revised its plan and decided to reclassify broadband under Title II and allow it to be regulated like a public utility, and prohibit ISPs from blocking, slowing, or speeding up any data preferentially. Because Wheeler changed his plan after the president's announcement, a House oversight committee has been established to investigate if the White House has improperly influenced the FCC (Nagesh & Hughes, 2015). This is possible as President Obama nominated Wheeler for the position, and Wheeler has made significant contributions to the Obama campaign (Gustin, 2013). The plan will go to a vote on February 26th, and it is not clear whether the proposal will succeed. Many large companies have come out in support of this legislation, but large tech companies are actively lobbying against it before it goes to a vote on February 26th (Aguilar, 2014; Brustein, 2014). Meanwhile, Rep. Greg Walden (R-Ore.) and John Thune (R-S.D) are drafting their own bill that would ban ISPs from paid prioritization, or charging content companies for an online fast lane. The bill will also include bans on blocking or throttling Web traffic and extending net neutrality protections to wireless networks. These protections are very similar to the FCC's Obama-backed proposal, however, this bill not reclassify the internet as a telecommunications service, thereby prohibiting the FCC from having any authority over it (Tummarello, 2015).

Issues in Net Neutrality: Pros and Cons
Pros:
• Allows small start-ups a fair chance to enter the market, encouraging innovation and entrepreneurship
• Protects free speech. Internet providers cannot block access to content they do not approve of, or that is in competition with their own products or services
Cons:
• May interfere with free market: broadband service providers should be able to manage their networks the way they want
• Bandwidth is a limited commodity and must be paid for by somebody- why not the people or companies who are using the most?
• Charging users who use the most bandwidth more frees up revenue for developing new innovations
• Chat services use pre-existing internet connections for free and take money away from telecommunication services (Pogue, 2014)

Companies' Positions on Net Neutrality Depends Primarily on Their Industry Companies’ positions on net neutrality are primarily based on how they use or are associated with internet use. Internet service providers (ISPs) do not want net neutrality protections, because they want to charge more for “fast lanes.” Additionally, net neutrality costs them money in many ways- other companies get to use their infrastructure for things like communicating and streaming media at no cost, while taking away revenue from companies associated with the ISPs. For example, Comcast owns NBC, and wants to slow traffic from NBC’s competitors (Pogue, 2014). Comcast and Verizon have both fought FCC sanctions and regulations in court successfully, and AT&T has also faced the FCC in court over blocking certain online services. Additionally, 60 large tech companies like Intel, Qualcomm, Cisco, and IBM oppose the reclassification of the internet as a public utility, possibly because they manufacture broadband infrastructure components and thus have a financial stake in the matter (Aguilar, 2014). On the other hand, most companies who operate over the internet are for net neutrality. Netflix, Skype, Amazon, and other companies who rely on the internet for their success are naturally for net neutrality: These companies do not want to have to pay Comcast or Verizon fees to get content to their users, or be slowed down so that customers move to competitors. Larger companies have more lobbying power for net neutrality, but small companies also tend to be on net neutrality's side, as they cannot compete against larger companies and ISP monopolies. Surprisingly, several non-tech companies have been lobbying for net neutrality as the Ad Hoc Telecommunications Users Committee. This committee is comprised of lawyers and representatives from companies such as Ford Motor, Visa, United Parcel Service, and Bank of America. These companies are for net neutrality because ““every retailer with an online catalogue, every manufacturer with online product specifications, every insurance company with online claims processing, every bank offering online account management, every company with a website–every business in America interacting with its customers online is dependent upon an open Internet” (Brustein, 2014). Google has been pro-net neutrality for most of its existence, which is understandable as it is one of the largest sources of online activity. However, the company changed its stance in 2014 and is now against net neutrality regulations. This change of heart puts it at odds with other companies which rely on the internet, however, it does coincide with Google developing its Fiber service and becoming a broadband provider itself (Barr, 2015). Net Neutrality in Politics Although Republicans in the House of Representatives are currently working on their own draft regarding internet regulation, net neutrality is a topic that tends to be favored by both liberals and conservatives (Tummarello, 2015). In fact, the bill being drafted in the House favors the same policies as the FCC's proposal, but without giving the FCC any enforceable authority over the internet. The outcry to the FCC's current proposal is not about the regulations themselves: the GOP does not want to give the FCC any more authority, and does not want to back a proposal supported by President Obama (Weigel, 2015). Although some Republican politicians have complained about the president's involvement in net neutrality as “radical”, “Obamacare for the internet”, and “a textbook example of the kind of Washington regulations that destroy innovation and entrepreneurship”, the vast majority of conservatives in the U.S. are in favor of net neutrality (Edwards, 2014). A poll conducted by the Internet Freedom Business Alliance found that 83% of voters who self-identified as “very conservative” were concerned about the possibility of internet service providers being able to “influence content” on the web, and 83% of self-identified conservatives believed that Congress should take action to ensure that cable companies do not “monopolize the Internet” or “reduce the inherent equality of the Internet” by charging content providers for faster access (Edwards, 2014). These beliefs align with the conservative ideals of free speech and the liberty to watch, read, and consume what one wishes. However, the concept of net neutrality also aligns with liberal beliefs that information, including internet activity, should not be censored , and that companies should be controlled by regulations protecting the consumer. This makes net neutrality one of the few topics that both Republicans and Democrats can agree on in principle, though they may differ in beliefs about how this end should be achieved.
References
Aguilar, M. (2014, December 10). A ton of tech companies just came out against net neutrality. Gizmodo.
Ante, S. E., & Crockett, R. O. (2005, November 6). Rewired and ready for combat. Bloomberg Business.
Barr, A. (2015, February 4). Google and net neutrality: It's complicated. The Wall Street Journal.
Brustein, J. (2014, November 14). Net neutrality: Ford, UPS, Visa, and BoA lobby FCC in secret. Bloomberg Business.
Boliek, B. (2013, March 21). Sources: Julius Genachowski to step down from top FCC post. Politico.
The Communications Act of 1934, United States Code § 49 (1934).
Communications, Consumer's Choice, and Broadband Deployment Act of 2006, S. 2686, 109th Cong. (2006).
Downes, L. (2015, February 12). How Wheeler's "net neutrality" became Obama's "public utility" Forbes.
Edwards, H. S. (2014, November 14). Conservatives overwhelmingly back net neutrality, poll finds. Time.
Federal Communications Commission. (2005, September 23). Policy Statement. Retrieved from https://apps.fcc.gov/edocs_public/attachmatch/FCC-05-151A1.pdf
Gustin, S. (2013, May 2). Tom Wheeler, former lobbyist and Obama fundraiser, tapped to lead FCC. Time.
Kang, C. (2014, May 15). FCC approves plan to consider paid priority on Internet. The Washington Post.
Melvin, J. (2011, September 23). U.S. Internet rules to take effect November 20. Reuters.
Nagesh, G., & Hughes, S. (2015, February 6). House to probe White House role in FCC's 'net neutrality' proposal. The Wall Street Journal.
Peralta, E., & Wright, B. (2010, August 5). Reports: Google and Verizon negotiate on paid, tiered access to web. NPR.
Pogue, D. (2014, March 18). The net neutrality debate in 2 minutes or less. Scientific American.
Reardon, M. (2007, February 22). Skype petitions FCC for open cellular access. CNET News.
Regan, K. (2005, March 04). FCC fines telecom that blocked Vonage VoIP calls. E-Commerce Times. Retrieved from http://www.ecommercetimes.com/story/41101.html
Schatz, A. (2008, September 5). Comcast to appeal FCC's decision on internet blocking. The Wall Street Journal.
Schatz, A. (2010, April 7). Court backs Comcast over FCC on 'net neutrality' The Wall Street Journal.
Scherer, M. (2010, August 10). Is the Google-Verizon plan a setback for net neutrality? Time.
Stone, B. (2008, March 28). Comcast adjusts way it manages internet traffic. The New York Times.
Svensson, P. (2007, October 19). Comcast blocks some internet traffic. The Washington Post.
Svensson, P. (2008, April 1). FCC Chairman Martin says Skype's petition unnecessary. USA Today.
Tummarello, K. (2015, January 15). GOP makes U-turn on net neutrality. Politico.
Weigel, D. (2015, February 14). Is net neutrality Obamacare for the internet? Or what? Bloomberg Politics.
Wu, T. (2003). Network neutrality, broadband discrimination. Journal of Telecommunications and High Technology Law, 2. http://dx.doi.org/10.2139/ssrn.388863
Wyatt, E. (2014, November 10). Obama asks F.C.C. to adopt tough net neutrality rules. The New York Times.
Zajac, A., & Shields, T. (2014, January 14). Verizon wins net neutrality court ruling against FCC. Bloomberg Business.

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