The repeal of net neutrality prompted an array of opposing opinions of where the internet is headed. Some believe that the repeal marks the beginning of an internet apocalypse and an imminent destruction of the world wide web, yet others predict that the repeal will have no tangible effect on internet service at all. Similar to most controversies such as this one, the truth lies in the middle of these extremes with clear winners and losers. But before we understand how a lack of net neutrality will affect the economy, we need to understand what exactly net neutrality is. Net neutrality is the principle that internet consumers should have equal access to all areas of the internet. It is enforced by a set of government regulations that ensures the equal access for the customers of internet service providers (ISP’s), such as AT&T and Comcast. The first “ancestors” of net neutrality emerged in the 1970’s when the  Federal Communications Commission (FCC) employed regulations onto the telephone industry (then entirely controlled by the monopoly AT&T) so that “over-the-top” service providers, which offered computer services above what AT&T provided, would be able to compete on an equal playing field with AT&T. These additional service providers were akin to what we consider our modern-day applications like Wikipedia, Google, and Youtube.

Once broadband internet took over from dial-up in the 1990’s, the FCC had to deal with another round of issues. The broadband ISP’s were directly competing with applications, such as Vonage or Skype, that worked only through the broadband cables, and as a result, the ISP’s could restrict service to those applications. The FCC led by Republican Michael Powell fixed this issue by fining ISP’s for restricting access to these applications. The most recent addition to the net neutrality principal happened in 2015 by FCC chair Tom Wheeler; he set net neutrality into stone through the use of Title II of the Telecommunications Act of 1934. This action was taken in response to ISP’s demands for high data using websites such as Netflix to pay extra fees for adequate service for customers to reach their sites. By doing this, the FCC in essence sets internet service equal to a utility such as phone and electric services. All these regulations combined created the idea of net neutrality as we know it today, granting equal access to all websites regardless of data usage or competitive risk to the ISP.

Now that the FCC, under the Trump administration’s chairman Ajit Pai, has decided to repeal these regulations, the internet has potential to undergo significant changes, chiefly in terms of cost and accessibility. The repeal allows ISP’s to now engage in a restrictive practice called throttling, which is an intentional slowing of internet service by an ISP. This new ability of throttling, along with the more outright practice of blocking, give the ISP’s much more control over what content the customer may be able to consume. This potential danger is one of the biggest fears of net neutrality supporters and activists. If the ISP’s decide that they want to engage in these practices, customers may need to end up paying more for complete service to all areas of the internet at high speeds. Depending on the price points, this plan may only be affordable to large corporations and affluent families to the detriment of lower-income families and more importantly small businesses, many of which may not be able to afford this increasing cost.

Another worry about the repeal is that the ISP’s will throttle websites that seem to be competing with them or do not have enough capital to pay for better service to their website. This is especially dangerous also to marketplace websites such as Amazon, Ebay, or Craigslist where free trade has potential to be restricted by the ISP’s. However, there is hope that these worries will not come to fruition because of the market incentives to keep the status quo. Charter Communications, a large ISP, told the FCC that they would continue to voluntarily adhere to net neutrality, and it is expected that many other ISP’s will follow suit. For this reason, many people believe that the only real effect of the repeal is an increased price of internet service for consumers.

Although it seems that the ISP’s will be profiting from the spoils of this victory, this is only profit in the short run. The repeal now makes it easier for market disruptors to infiltrate into the internet service industry, much like Uber disrupted the “neutral” taxi industry. It opens the door for other companies to enter into the industry because the barriers to entry into the industry would be much lower than before the repeal. Now new companies do not need the large network infrastructure to provide their customers access to the entire internet. Therefore, a new ISP could still be successful by only providing limited internet access to a few sites at a lower price than another ISP who charges more for more access. This means that in the long run, the ISP’s may be facing more competition than they would under net neutrality rules. In fact, this is one of the reasons Ajit Pai and other Republicans favored the repeal of net neutrality: so that this new market transparency would led to more competition among the virtual monopolies that control the internet service industry. The larger reason for the repeal is that it conforms to the common theme of deregulation in the Trump administration.

However, the voices of opposition are far louder than those of the supporters of the repeal. Most Democrats and even many Republicans oppose the FCC’s decision. Both Rep. Jeff Fortenbury (R-Neb.) and Rep. John Curtis (R-Utah) among others openly oppose the repeal and have produced statements that support the continuation of net neutrality.

Although the repeal of net neutrality poses threats to a free and open internet, the real consequences will not show up until the market has time to adjust to these new freedoms of the internet service providers. For now, things will not change all too much, but the danger is still present.

Sources

Blumenthal, Paul. “What Net Neutrality Really Means For You (And For Us).” Huffington Post, 25 Dec. 2017.

Lohr, Steve. “Net Neutrality Repeal: What Could Happen and How It Can Affect You.” New York Times, 21 Nov. 2017.

Roach, Christopher. “Against Net Neutrality.” American Greatness, 27 Nov. 2017, amgreatness.com/2017/11/27/against-net-neutrality/.

Wu, Tim. “HOW THE FCC'S NET NEUTRALITY PLAN BREAKS WITH 50 YEARS OF HISTORY.” Wired, 6 Dec. 2017, www.wired.com/story/how-the-fccs-net-neutrality-plan-breaks-with-50-years-of-history/.

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