Chapter 7 Telecommunications, the Internet, and Wireless Technology 291
INTERACTIVE SESSION: ORGANIZATIONS
The Global Battle over Net
Neutrality
What kind of Internet user are you? Do you primarily
use the Net to do a little e-mail 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. Could hundreds of millions of people
like you start to slow the Internet down?
Video streaming on Netflix has accounted for 32
percent of all bandwidth use in the United States
and Google’s YouTube for 19 percent of web traffic
at peak hours. If user demand overwhelms network
capacity, the Internet might not come to a screeching
halt, but users could face sluggish download speeds and
video transmission. Heavy use of iPhones in urban
areas such as New York and San Francisco has
degraded service on the AT&T wireless network.
AT&T had reported that 3 percent of its subscriber
base accounted for 40 percent of its data traffic.
Internet service providers (ISPs) assert that
network congestion is a serious problem and 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 widely accepted because 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. Presently, the Internet is neutral; all
Internet traffic is treated equally on a first-come,
first-served basis by Internet backbone owners. How-
ever, this arrangement prevents telecommunications
and cable companies from charging differentiated
prices based on the amount of bandwidth consumed
by the content being delivered over the Internet.
The strange alliance of net neutrality advocates
includes MoveOn.org; the Electronic Frontier
Foundation; the Christian Coalition; the American
Library Association; data-intensive web businesses
such as Netflix, Amazon, and Google; major consumer
groups; and a host of bloggers and small businesses.
Net neutrality advocates argue that differentiated
2016 the Body of European Regulators for Electronic
pricing would impose heavy costs on heavy
bandwidth users such as YouTube, Skype, and other
innovative services, preventing high-bandwidth start-
up 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.
Network owners believe regulation to enforce net
neutrality will impede competitiveness by
discouraging capital expenditure for new networks and
curbing their networks’ ability to cope with the
exploding demand for Internet and wireless traffic.
U.S. Inter- net service lags behind many other nations
in overall speed, cost, and quality of service, adding
credibility to this argument. Moreover, with enough
options for Internet access, dissatisfied consumers
could simply switch to providers who enforce net
neutrality and allow unlimited Internet use.
In the United States the Internet has recently
been declared a public utility, and therefore subject
to regulation of the Federal Communications
Commission (FCC), which regulates the land
telephone system. Public utilities are required to
provide service on an equal footing to all users.
The new rules are intended to ensure that no
content is blocked and that the Internet cannot be
divided into pay-to-play fast lanes for Internet and
media companies that can afford them and slow
lanes for everyone else. Outright blocking of con-
tent, slowing of transmissions, and the creation of
so-called fast lanes were prohibited. The FCC stated
that it favors a light touch rather than the heavy-
handed regulations to which the old regulated tele-
phone companies were subjected. One provision
requiring “just and reasonable” conduct allows the
FCC to decide what is acceptable on a case-by-case
basis. The new rules apply to mobile data service
for smartphones and tablets in addition to wired
lines. The order also includes provisions to protect
consumer privacy and ensure that Internet service is
available to people with disabilities and in remote
areas.
In Europe, telecommunications carriers are subject
to the European Parliament, which in 2015 adopted net
neutrality legislation that required Internet service
providers to treat all web traffic equally. In
Communications (BEREC) issued regulations that prohibited
ISPs from blocking or slowing down of Internet
traffic, except where necessary for maintenance and
security.
In 2015, United States Telecom Association, an
industry trade group, filed a lawsuit to overturn
the government’s net neutrality rules. AT&T, the
National Cable & Telecommunications Association,
and CTIA, which represents wireless carriers, filed
similar legal challenges. Pro-net neutrality forces
have asked the FCC to look at “zero-rating” practices,
in which certain services, like Spotify and Netflix,
are exempt from data caps in a customer’s data plan.
The battle over net neutrality is not yet over
In Europe, telecommunications carriers are
subject to the European Parliament, which in 2015
adopted net neutrality legislation that required inter-
net service providers to treat all web traffic equally. In
2016, the Body of European Regulators for Electronic
Communications (BEREC) issued regulations that
prohibited ISPs from blocking or slowing down
CASE STUDY QUESTIONS
1. What is net neutrality? Why has the Internet
operated under net neutrality up to this point?
2. Who’s in favor of net neutrality? Who’s opposed?
Why?
3. What would be the impact on individual users,
businesses, and government if Internet providers
switched to a tiered service model for transmission
over landlines as well as wireless?
of Internet traffic except where necessary for
maintenance and security.
In Europe, major ISPs including Deutsche Telekom,
Nokia, Vodafone, and BT promise to launch 5G
networks in every country in the European Union by
2020 if authorities hold off on implementing the new
rules. Otherwise, 5G networks will take a much longer
time, they argue.
Sources: Amar Toor, “Europe’s Net Neutrality Guidelines Seen as a
Victory for the Open Web,” The Verge, August 30, 2016; BEREC, “All You
Need to Know About Net Neutrality Rules in the EU,” berec. europa.eu,
2016; David Meyer, “Here’s Why Europe’s Net Neutral- ity Advocates
Are Celebrating,” Fortune, August 30, 2016; John D. McKinnon and
Brett Kendall, “FCC’s Net-Neutrality Rules Upheld by Appeals Court,”
Wall Street Journal, June 14, 2016; Darren Orf, “The Next Battle for
Net Neutrality Is Getting Bloody,” Gizmodo, May
25, 2016; Stephanie Milot, “GOP Moves to Gut Net Neutrality, FCC
Budget,” PC Magazine, February 26, 2016; Rebecca Ruiz, “FCC Sets
Net Neutrality Rules,” New York Times, March 12, 2015; Rebecca
Ruiz and Steve Lohr, “F.C.C. Approves Net Neutrality Rules,
Classifying Broadband Internet Service as a Utility,” New York Times,
February. 26, 2015; Robert M. McDowell, “The Turning Point for
Internet Freedom,” Wall Street Journal, January 19, 2015; Ryan
Knutson, “AT&T Sues to Overturn FCC’s Net Neutrality Rules,” Wall
Street Journal, April 14, 2015.
4. It has been said that net neutrality is the most
important issue facing the Internet since the advent
of the Internet. Discuss the implications of this
statement.
5. Are you in favor of legislation enforcing network
neutrality? Why or why not?