What are the consequences of the loss of net neutrality for consumers and startups?

So what is net neutrality?

The topic of net neutrality has dominated the internet for weeks. Many people have been speculating the implications of net neutrality in both the news and on social media. Will we have to pay more to access our favorite websites? Are startups and small businesses doomed? Is the internet as we know it gone forever? While net neutrality is a valid cause for concern, I wouldn’t start mourning the death of the internet just yet.

In 2015, the Federal Communications Commission established net neutrality regulations. High-speed internet was reclassified from an information to a telecommunications service. Information services are subjected to less regulation than telecommunications services, which can be regulated under Title II of the Communications Act. These rules were established to protect the open Internet, prohibiting Internet service providers (ISPs) from promoting some content over other content unfairly.

What may happen?

Without net neutrality regulations, this could occur in several ways, including paid prioritization, in which a content owner pays an ISP to promote its content over other content or to install “fast lanes” to their website. An ISP could also prioritize their own content, or block certain websites, such as those of competitors.

How did net neutrality get repealed? 

On December 14, 2017, the FCC repealed these net neutrality regulations. The Federal Communications Commission’s chairman, Ajit Pai, and two other Republican commissioners voted against net neutrality, granting them the majority at 3-2. The supposed benefit of repealing net neutrality regulations is to promote competition among Internet providers. Supporters of the repeal of net neutrality regulations suggest that internet service providers will not reduce consumers’ internet capabilities, but promote innovation and reasonable prices. Major internet providers such as Comcast and AT&T claim that our internet experience will not change drastically and that they will not engage in most forms of paid prioritization. However, many of us remain skeptical.

History of net neutrality

Throughout the internet, a cause for concern was established due to the behavior of ISPs before the 2015 regulations were put into place. In 2005, CompTel, a trade association consisting of AT&T’s competitors, requested documents from the FCC regarding AT&T’s potential overcharging of the agency for a project. AT&T dissented on the grounds of “personal privacy” under the Freedom of Information Act (FOIA). In 2009,  a Third Circuit federal appeals court ruled in FCC v. AT&T Inc. that corporations are entitled to personal privacy because they are considered persons under other sections of FOIA. The case was appealed, and the Supreme Court overturned the lower court decision, stating that corporations do not have the personal privacy that could protect them from the release of public records obtained by a government agency.

Several years later, Comcast was found to have been slowing its customers’ access to BitTorrent, a “peer-to-peer” file-sharing service. BitTorrent is one of the most commonly used means of sharing large electronic files, including audio and video files. The FCC attempted to regulate this practice but in Comcast Corp. v. FCC (2010), a federal appeals court ruled that the FCC does not have the authority to regulate Internet providers by requiring them to treat all web traffic equally, citing the FCC’s failure to demonstrate its “ancillary authority” over Comcast’s practices. That same year, the FCC approved the Open Internet Order, which barred internet providers from preventing access to certain websites (such as competitor websites). In 2012, AT&T faced backlash after blocking the FaceTime app on the phones of customers with certain data plans. The FCC charged AT&T a fine and eventually users were able to continue using the app. The actions of ISPs throughout the years make it very uncertain that we will continue to be able to view content without restrictions.

Actual Consequences

Although it is true that the internet as we know it is not going to change overnight, over time, the repeal of net neutrality regulations could cause significant changes for both consumers and startups/small businesses. Service providers like Comcast or AT&T could decide to charge companies to deliver more web traffic from the websites’ servers. Such service providers could also create faster lanes of delivery for their own sites so that consumers will have more difficulty viewing competitors’ sites. Companies (e.g Amazon, Netflix) could decide to charge their customers extra money in order to compensate for their payments to internet service providers, potentially increasing our internet bills drastically.

It seems unlikely that the repeal of net neutrality regulations will lead to meaningful increased competition, considering that a handful of corporations dominate internet service. Even more unnerving is the possibility of strict limitations on the content that we can view and the websites that we can use. If paid prioritization takes effect, and it is much faster and easier to access larger, more prominent companies online that can afford to pay for faster service, there are several dangerous implications for both consumers and small businesses. Limiting consumers’ access to websites of startups, small businesses, and small, independent news sources strips them of their consumer choice and their ability to stay informed.

Impact on Startups and Small Businesses

Furthermore, the absence of net neutrality could be detrimental to startups, which rely heavily on the internet to promote their products and gain a following. It is unlikely that startups will be able to compete with larger, more well-known businesses if internet service providers decide to start charging websites for service. Contrary to its supposed intention, the elimination of net neutrality will hamper innovation and competition.

While the idea of paying more for internet service is unappealing to most people, the most concerning aspect of deregulating the internet is the absence of information and choice that will affect all of us. Thanks to the open internet, we have been able to view the information we want from a plethora of sources. Without the open internet, we will see whatever the largest few ISPs, such as Comcast and AT&T, want us to see. While other sources of information, such as newspapers, do exist and are important, they do not reach everyone to the extent that the Internet does.

The Internet allows us to both access and shares the most recent information in seconds. It provides a connection among peers and between citizens and government. Without the open Internet, a restriction of freedom exists. However, there is still hope for net neutrality. Democratic Senator Chuck Schumer (New York) has suggested that he will force a Congressional vote on net neutrality by using the Congressional Review Act (CRA). It is likely that there will also be multiple lawsuits against the FCC. Now, during these essential first moments, is the time to be proactive in order to preserve net neutrality.