MIS | Case

[Chapter 7]

[Net Neutrality: The Battle Rages On]

[Management Information Systems]

[Section F]

[Fall 2020-21]

What kind of Internet user are you? Do you primarily use the Net to do a little email and online banking?
Or are you online all day, watching YouTube videos, downloading music files, or playing online games?
Do you use your iPhone to stream TV shows and movies on a regular basis? If you’re a power Internet or
smartphone user, you are consuming a great deal of bandwidth.

To manage all the data flowing over the Internet, it will be necessary to build new networks. Internet
service providers (ISPs) assert that expanding their networks would require passing on burdensome costs
to consumers. These companies believe differential pricing methods, which include data caps and
metered use—charging based on the amount of bandwidth consumed—are the fairest way to finance
necessary investments in their network infrastructures. However, metering Internet use is not universally
accepted be- cause of an ongoing debate about net neutrality.

Net neutrality is the idea that Internet service providers must allow customers equal access to content
and applications, regardless of the source or nature of the content. Until recently, the Internet has been
neutral, with all Internet traffic treated equally on a first-come, first-served basis by Internet backbone
owners. However, this arrangement prevents tele- communications and cable companies from charging
differentiated prices based on the amount of band- width consumed by the content being delivered
over the Internet.

Net neutrality advocates include the Electronic Frontier Foundation; data-intensive web businesses such
as Netflix, Amazon, and Google; major consumer groups; and a host of bloggers and small businesses.
They argue that differentiated pricing would impose heavy costs on heavy bandwidth users such as
YouTube, Skype, and other innovative services, preventing high-bandwidth startup companies from
gaining traction. Net neutrality supporters also argue that without net neutrality, ISPs that are also cable
companies, such as Comcast, might block online streaming video from Netflix or Hulu to force customers
to use the cable company’s on-demand movie rental services.

It was thought that the issue of net neutrality had been definitively settled by the 2015 ruling of the
Federal Communications Commission (FCC) under the Obama administration, which considered
broadband Internet services as a utility under Title II of the Communications Act. This ruling gave the
FCC broad power over Internet providers. Internet service providers could not discriminate against any
lawful content by blocking websites or apps, slow the transmission of data based on the nature of the
content as long as it was legal, or create an Internet fast lane for companies and consumers who pay
premiums and a slow lane for those who don’t.
All that changed under the Trump administration, which opposes net neutrality as part of its push for
government-wide deregulation. In December 2017, the FCC voted to repeal its net neutrality rules for
Internet providers. Trump’s FCC chair, Ajit Pai, has asserted that before net neutrality rules were put into
effect in 2015, service providers had not engaged in any of the practices the rules prohibit. Pai believes
that ending net neutrality could help lower prices for consumers, because Internet service providers
could offset their costs with the use of paid prioritization deals with websites for faster delivery of their
content.

Pro-net neutrality groups immediately countered, predicting that repealing net neutrality would lead to a
faster, pricier, and more confusing Internet. Deregulation could create a “two-tier” Internet, in which
Internet service providers will start charging fees to websites and apps, and slow down or block the sites
that don’t pay up. As a result, users will have unfettered access to only part of the Internet, with the rest
either inaccessible or slow.

Consumer advocates have further argued that if net neutrality rules are eliminated, broadband providers
will begin selling Internet services in bundles, similar to how cable television is sold today. For example, if
you wanted to access Facebook and Twitter under a bundling system, you might have to pay for a
premium social media package. Consumers could suffer from pay-to-play deals. A fast lane could be
occupied by big Internet and media companies and affluent households, while everyone else would be
relegated to a slow lane.

Some small businesses worry that repealing net neutrality would create an unfair playing field favoring
industry giants. Websites and services of e-commerce startups might run slower than those run by the
big Internet players such as Netflix or Facebook. Remote workers of all kinds, including freelancers and
franchisees could similarly face higher costs to do their jobs from home.

Opponents of net neutrality have countered that the biggest barrier to a company becoming the next
Google, Facebook, Netflix, or Amazon isn’t the end of net neutrality but Google, Facebook, Netflix, and
Amazon themselves. These companies are already spending vast sums of money to push their ever-
higher bandwidth content to consumers. Many lawsuits challenging the FCC’s new Internet policy have
been filed since the new FCC rules took effect. The battle for net neutrality is not over.

Sources: Cecelia Kang, “Flurry of Lawsuits Filed to Fight Repeal of Net Neutrality,” New York Times, January 16, 2018; Nick Piette, “Net Neutrality:
Why It’s Vital for Digital Transformation,” Information Week, February 9, 2018; Aaron Byrd and Natalia V. Osipova, “Why Net N eutrality Was
Repealed and How It Affects You,” New York Times, December 21, 2017; and “Christopher Mims, Get Ready for a Faster, Pricier, and More
Confusing Internet,” Wall Street Journal, December 18, 2017.

Case Study Questions: Find the question at the Microsoft Teams – Assignment

Submission Deadline: On and before 12 December 2020 – 23:59

No submission after deadline.