The Truth About Net Neutrality

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The phrase “Network Neutrality” is, like most political parlance, ambiguous. To examine the concept comprehensively is beyond the scope of this article, so instead I’ll focus only on the recent mandate voted in by the Federal Communications Commission (FCC) that is associated with this term.

The most important sections of the mandate deal with the prohibition of blocking and “unreasonable” discrimination. The section against blocking, which is the clearest portion of the mandate, forbids broadband providers from charging “edge providers” for simply providing traffic to their website and degrading (read: slow down) certain content or devices.

Blocking, the more frightening menace of a neutrality-free net, has been a rallying point for proponents of net neutrality. Senator Al Franken warned in July 2010 that without state regulation of the Internet, it will not be long before “the Fox News website loads five times faster than Daily Kos.”
To look at this hypothetical issue at the granular level, I conducted a simple speed test for UCInet Mobile Access at speednet.net and received 14.61 Mb/s (not MB); to gauge the effectiveness of this speed, I drew up through Google Reader a recent blog post from Matt Yglesias’ blog at the Center for American Progress, a left-wing think tank and one of the putative victims of a web without neutrality, and checked the size of the page: 13.44 KB. The post hosted on the ThinkProgress website yielded 11.56KB. In a hypothetical coming-to-a-web-near-you dystopia where the broadband conglomerates defer to corporate interests and slow down the load speed of this blog by a factor of 100, it would still take me less than a second to load. Somehow Senator Franken’s warning doesn’t seem so threatening anymore. Five times slower? Five hundred times would barely be a hassle. The stark wasteland painted by NN proponents is more a political chimera than a realistic scenario.

Another apparent “possibility” is that marginal websites will not load altogether, but any decisions belonging to the blanket-censorship category would be so scandalous to the public that no profit-driven corporation would risk tarnishing their image for short-term squabbles: these worst-case scenarios are held back by free-market forces.

The other main plank of the mandate, the prohibition of “Unreasonable Discrimination,” includes three main points. Jeff Ely at Northwestern blogs: “There are three typical ways a provider would discriminate: differentially pricing various services (i.e. you pay differently whether you are accessing Facebook or YouTube), differentially pricing by quantity (i.e. the first MB costs more or less than the last), or differentially pricing by bandwidth (i.e. holding fixed the quantity you pay more if you want it sent to you faster, for example by watching HD video.)”

These were the exact directions in which AT&T and Verizon were planning to head a week before FCC vote; a PowerPoint Presentation sent to Wired.com revealed proposed changes in pricing structure to lower the discrepancy in web traffic (way up) and revenue (not so up). While these changes pertain to wireless Internet and thus do not fall under the new FCC regulations, no doubt wireline companies would have followed if the new model proved financially successful.

Barbara Van Schewick, head of the Stanford Center for Internet and Society, argues that such a model would be pernicious to consumers: “By imposing a higher price on the bandwidth needed for certain applications, the network providers effectively tax these applications, which may lead people to use them less than they normally would. This is bad for users because they cannot use the Internet in the way that is most valuable for them.”

A dissection of her language reveals empty truisms draped in a moralistic tone. Of course, charging users for the individual services they use — Skype, Facebook, Twitter, etc. — lessens their usage, but she gives a baseline or what constitutes “normal usage.” Perhaps these services are being overused.

Furthermore, if individual charges are a “tax,” then the price for every market good is a tax; that however, would be quite absurd. All other things equal, if expenditure is the same, a tax break somewhere else must follow a tax increase here. Users who don’t use Facebook or Twitter (yes, they exist) will find a lighter bill each month. The phrase “cannot use” is silly. Users only have to pay a small fee to access those services, and competition insures that those fees stay low. Under the current model, low-volume users subsidize high-volume ones, not exactly a fair distribution of costs. Like the decrying of Comcast’s decision to cap monthly bandwidth usage at 250 GB per month, a vocal minority (you won’t pass 250 GB unless you’re a hardcore gamer and torrent user) makes the change appear more agonizing than it really is.

What worries me more than a (highly improbable) corporate-controlled dystopia is the heady, anti-corporate rhetoric that can bring us closer to an actual dystopia. The recent gains in Net Neutrality followed not from an act of Congress, but from a 3-2 vote by FCC commissioners. History gives goods reasons to be suspicious of government expansion, with nothing more salient than our byzantine tax code that requires years of legal training for proficiency in just one area. In seeking quick solutions, perhaps the American people should develop a more long-term view and ponder what problems the solutions themselves beget.

Yichao Hao is a first-year economics major. He can be reached at haoy1@uci.edu.