Net Neutrality. Two years ago, even most of last year, I could not get many people in our industry interested in the topic– despite its huge importance. It was just too technical and too esoteric. But really, it was like trying to engage rapidly swimming dolphins in a conversation about water, from the deck of a speeding boat. The Internet had come to be taken for granted– and that’s an understatement. No one questioned its underlying structure, or the economic or political dimensions going forward. Everyone was too busy swimming in it, daily, hourly, minute by minute.
Happy New Year. While you were away, the Net Neutrality issue came back. And if you bring up Net Neutrality at your dinner table at home or at a trade show (like CES next week) maybe you won’t get everyone you’re conversing with checking their watches.
Specifically, while you were distracted finishing up your 2017 projects, the FCC voted (on December 14th) to reverse the agency’s 2015 decision to have stronger oversight over broadband providers– when the FCC said that those broadband providers fell under Title II, i.e. they were “common carriers”. The “net neutrality” rules implemented in 2015 ostensibly prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. Essentially, the recent December 14 vote was the FCC saying that they will no longer regulate high-speed internet delivery as if it were a utility. In other words, the 2015 FCC-granted common carrier/Title II status (think utilities, like a phone company) of the broadband providers was removed.
There’s no point in reiterating here the many arguments– from our industry and others– about the need for an unfettered, level playing field, democratic access to the web for all. All of the arguments decry the demise of “net neutrality” and predict dire outcomes if we don’t get it back. Critics say that consumers will have less access to content online and that start-ups will face more pay-to-play. Valid concerns, all.
I said it four years ago, when I first started covering net neutrality: it’s complicated. No one would argue in favor (I did not then and I do not now) of blocking or hindering equal access to the wonders of the web, for all. But government policy in any area is complex. Government policy regarding technology– and involving this country’s giant tech companies– has many many layers of sticky complications, contradictions, and nuances.
I won’t lay out here, a complete argument in favor of a particular course of action, post December 14 FCC vote, to follow. I will lay out some food for thought, to get you thinking about the nuances of this complex landscape, as we prepare for CES. (It was disappointing to learn today, that Ajit Pai, chair of the FCC, is pulling out of his scheduled appearance at CES in Las Vegas next week. Pai was slated to appear alongside CTA president Gary Shapiro and Maureen Ohlhausen, the acting chairman of the Federal Trade Commission, in a session on tech policy on Monday. Pai could have explained his case to many skeptics.)
Regardless of where you stand on the issue, you need to consider:
• If you hate the Dec. 14 2017 “repeal” of the 2015 net neutrality rules, note that nothing is set in stone. The FCC still has power from Congress to institute regulation pertaining to the Internet or broadband providers, “to preserve and facilitate the ‘virtuous circle’ of innovation that has driven the explosive growth of the Internet– is reasonable and supported by substantial evidence.” And, Congress has power to write laws pertaining to the same.
• The ball is now in the court of congress. Will they act? Can they sacrifice Title II, and preserve the “3 rules” of net neutrality? (Established in 2015 by the FCC, the three rules of NN, for broadband providers mainly: no URL blocking, no bandwidth throttling, no paid prioritization to advance some traffic faster).
• It was never very logical to think the wild-west era of the Net, could survive, legally. Net Neutrality was a great idea. But the infrastructure for the bandwidth to the home and office and university was not put in by the government, and it was not paid for and put in by the FANG’s (Facebook, Amazon, Netflix, Google). It was paid for and put in by giant telcos and cable companies– yes, those big ISP’s many like to bash. Was it ever reasonable to think that they would (because they're "nice guys"?) continue to provide unlimited access to their bandwidth, including to their competitors, without pricing it dynamically (charging for more bandwidth/slowing down the pipe– same thing)? Dynamic pricing is one of the strongest trends in the U.S. economy. It’s OK for Uber, but not for ISP’s? Maybe, but you’ll need some industrial strength lawyers to prove that in court.
• The Walled Garden effect. It’s the term that people on both sides of the argument bring up. If you fear a danger of monopoly-inspired moves by the broadband providers that will now be unleashed by the 12-14-17 ruling, how do you feel about the FANGs, today, enjoying virtual monopoly status in important markets. The system as we’ve seen it in the past five years allows huge entities to dominate markets utterly. The system saw a shift of power and resources unprecedented in history– away from content producers (not just musicians and journalists and others we love but content producers of all kinds including college professors and corporate innovators) and toward the platform providers. Net Neutrality never addressed this conundrum– in fact it exacerbated it. The FANGs created near perfect walled gardens– that were going to be legally challenged, and challenged in regulatory bodies, eventually. I can’t predict who– the FANGs or the ISPs– will be more clever at building their walled gardens (both, while claiming they’re promoting an “open internet”)– we all need to be vigilant to what is going on behind the superficial issues.
• Municipal broadband (city-owned): many states recently passed laws to prevent cities from doing broadband (i.e. laying down fiber). Former FCC chairman Tom Wheeler tried to promote it, but states started undermining it, and it was never going to go anywhere under the 2015 rules anyway. The new FCC chairman claims that he wants to study how to restart it, and help solve the digital divide. And the new FCC wants more incentive for more development of products, bandwidth– easier to innovate, with less regulation.
• If Net Neutrality is not a part of FCC policy, this could happen: Google, Facebook, Amazon, and Netflix, because they have so much cash on hand to work with, could offer to pay their consumers' broadband fees. For example, what if you're a consumer, and you vaguely think that net neutrality is a good thing. But then you get an offer from Google and Netflix that Google and Netflix will pay your ISP for your broadband service. So your cable bill goes from about $100/month, to zero $/month, if you agree, say, to stay with Comcast, or ATT. Would you still be opposed to "Net Neutrality"? If you're reading this, the answer is probably yes. But for many people in the consumer world the answer might be different.
• Hollywood has always been skeptical of Net Neutrality rules, given that egregious content copyright violators have sought legal shelter in its shadows and its common carrier cover. Strong trade associations such as the NAB have known this and have opposed net neutrality– at least the FCC’s 2015 version.
• Step back for a minute, and stop thinking about “access to content” under net neutrality just in terms of the obvious things like watching Netflix or your own company’s or school’s web sites and web activity. Do you really expect, or want to live in, a world where all content on the web is treated equally, period? Is that realistic? Do you not think that heart rate monitoring has priority over streaming entertainment content? Do you think porn and terrorism trolling needs the same bandwidth love from civic bodies and regulators as does higher education curricula and Smart Cities infrastructure? As we move to autonomous vehicles, how much bandwidth is needed to make it work, and will the net portions of that have priority on networks? Will Ford, GM, BMW, Mercedes, Toyota, and Harman and Samsung, have the ability to make deals individually or correctively with bandwidth providers to make autonomous vehicles on highways work? Consider: even if much of the on-the-street communication for autonomous vehicle networks is done with wireless 5G, the massive amounts of data transmission, storage, and analysis needed to make it all work will necessitate the offloading of a lot of what is actually going up through the wireless networks. Much machine to machine communication will not take place up through the local access points or base stations but rather at the edge of networks. This is called network slicing– and by no means is all the real estate in question being allocated in any coherent way today, in either the IP or wireless landscape. (And autonomous vehicles is just one area where these dynamics complicate the open internet issues as we’ve defined them to date . Medicine and cyber security also involve complex tradeoffs and allocation issues.)
• OTT. You must know what that means. When TV goes to over-the-top (OTT, i.e. IP delivery of content) then the politics changes. TV is the last holdout from being radically disrupted by the internet. It won’t hold out much longer. When you get most TV, OTT, then a new battle between Hollywood, the ISP’s, and the FANG’s starts up. Hold onto your hats.
• Keep your eye on the “digital divide”: if there continues to be a big digital divide, or lack of infrastructure outside the big cities, then the debate will skew away from the Netflix effect– i.e. boutique concerns of city dwellers who can choose from competing broadband providers, and toward political concerns around equal access geographically and socio-demographically.
• Finally: 5G. As we head to CES 2018 Las Vegas, pay attention. 5G wireless may make a good deal (not all) of these issues take turns in different directions. Because the FCC has been treating wireless, and wired, differently. Not with any particular strategy, but because giving the big wireless providers some great perks was a way to alleviate some of the restrictions of net neutrality that they didn’t like. (Under the old FCC, Tom Wheeler was trying to give wireless companies something, so vertically integrated zero rating was born.) That era is ending. Look for a new dynamic as 5G starts to change many high bandwidth markets. 5G really is a game-changer.
Read more about net neutrality on AV Network:
ProAV CEOs Respond to the Net Neutrality Repeal
Net Neutrality and U
Reversal of Fortune: The Wide-Ranging Impacts of the Net Neutrality Reversal