Pete Huang

Diving slightly deeper into net neutrality

Let’s start with this pro-net neutrality argument:

Using the Internet is like when you turn on the faucet at home. The water utility, whoever it is, doesn’t really care about how you use that water, mostly because they can’t (water is heavily regulated). Use it to wash dishes, cook, or take a shower: it all costs the same.

And the Internet should be the same way. ISPs should take data from one side of the world and spit it out to the other side, without any regard for what that data actually is. You, as a consumer, should be able to fully choose how you use the Internet. Use it to watch videos, send email, read content: it all should cost the same.

Fundamentally, net neutrality improves competition by ensuring that consumers can vote with their data like they vote with their money. Better applications get more time, attention, and data, while worse applications get less.

It sounds really nice. As someone with limited proper reading into the situation, I read some version of this online and called it an evening. I probably thought something along the lines, “Yup, that seems sensible enough that the counterargument is highly likely to be less convincing.”

As the net neutrality battle wages on, I find it important to bring out one of my general rules of thumb: If it’s an active debate, and I think there’s a right answer, then I’m missing a whole lot of detail. Things are never as simple as they seem.

Therefore, I feel obligated to explore the topic further to fill in the gaps.

Today’s understanding of net neutrality

One obvious gap that I found in my understanding of the situation is what we’re actually talking about when we mean net neutrality. My sense is that the average Internet user understands the argument for net neutrality to essentially mean, “The Internet should be free and open”, which appears to me as both misleading and vague, though likely deliberately so in order to be used as a marketing slogan for the masses.

From all my re-reading, it boils down to this: net neutrality means that ISPs (the Comcasts and AT&Ts of the world) should treat all data the same. It means that they can’t charge you more because you downloaded 10MB of video versus 10MB of a static webpage, like this one.

It also means that they can’t slow down your access because you’re using Netflix, which, if you look at it the other way, amounts to speeding up your access for non-Netflix use (fast lanes).

It also means that they can’t build packages where data from one particular service doesn’t count towards your usage limits (zero rating). This sounds like an amazing deal, but keep in mind that in a world where AT&T zero rates for Gmail, they’re explicitly favoring Gmail over other free email providers.

There’s another concept we should keep in mind: reclassification. In the net neutrality debate, it refers to reclassifying ISPs from Title II to Title I providers or the other way around, depending on where things stand at the time.

Title I is “information services”, which covers a lot of stuff under the definition “capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications”. For example, web hosting, email, and Snapchat are all Title I services. The FCC has little control over these providers.

Title II is “common carrier services”. Common carriers are services that carry things for other parties. Postal services and phone service providers are both Title II providers. The FCC has authority over Title II telecom providers to prevent “unjust or unreasonable” practices.

Enforcing net neutrality is often tied to reclassifying ISPs as Title II providers.

Tim Wu’s 2003 paper

If we’re really going to understand net neutrality, it’s probably a good ideas to include the originating source of the term, which is Tim Wu’s 2003 paper titled “Network Neutrality, Broadband Discrimination”, even as mere acknowledgement of respect to the history of the argument.

I’ll let you read the entire paper - as an aside, I definitely miss a good chunk of the underlying context when I read things like this, including technical blog posts, and I don’t feel content with myself as a result.

I did want to point out that the author takes careful note to address preservation of a corporation’s ability to make profit as a legitimate argument, namely when addressing price discrimination (“It is true that mainstream antitrust analysis has come to see price discrimination as generally uncontentious, or at least ambiguous.”) and exploring potential objections to his proposed model (“First, does the neutrality principle restriction overly impinge on the ability of broadband carriers to earn a return from their infrastructure investments?”).

This is in contrast to current public sentiment, where responses to “ISPs are businesses, and they should be able to make money.” are met with something along the lines of “The ISPs can go to hell.”

The against argument

I did my best to uncover the best arguments against net neutrality, and spent most of my time reading for this post on this side, if only because it was the primary impetus for even putting this together. Here’s a summary of the arguments I saw:

  • Net neutrality will stifle innovation by ISPs - Regulation itself or even threat of regulation would drive companies to stop investing in new infrastructure since they have no visibility into whether or how much profit they will make. Degrading infrastructure quality nets out to be a net-negative for everyone.
  • Net neutrality actually reduces consumer choice - Let’s say that we actually do want ISPs to treat data differently. Taking an example that Tim Wu used in his 2003 paper, when it comes to getting data delivered as quickly as possible, I don’t care as much about email as I do video. To ensure that I get my video with the best service possible, I’m willing to tell my ISP to prioritize video over my email. I should be able to express my choices instead of being forced onto the same service levels as everyone else.
  • Regulation cannot predict or pre-empt unseen cases or consequences - Government regulation is weaker than free market focuses when it comes to driving particular outcomes because the landscape will change in 5 years and regulation won’t keep up. Competition will keep individual players accountable and preserve an open Internet more effectively.
  • Regulation means more rules that cost money, which could be too expensive for small players - Time is money, and regulation requires time to follow and report on. Only the incumbents have the scale to deploy resources for regulation, and smaller players.

The arguments against net neutrality are really kinda against regulation overall. The real question seems to be, “Is government stronger or weaker than market forces at spurring growth while protecting us from bad corporate practice?”

This is, of course, a fair question that isn’t limited to net neutrality. It’s too big of a question, though.

The hard part is that there’s not much of a counterfactual to go off of right now. It would be great to have 8 years of net neutrality, followed by 8 years without, to see how ISPs change their behavior, how the growth in Internet penetration changes, etc.

But we don’t. So all arguments claiming, “We’ve gotten to today because regulation has existed all this time” or “We’ve gotten to today because market forces have succeeded despite regulation” are quite useless to debate.

Protecting downsides over greater upsides

I find it important to place free (as in speech) access to information first and foremost in the discussion, in the same spirit of freedom of the press. I think it’s crucial, in fact, that we spend double the attention and intention in protecting these principles that aren’t easily expressed through monetary action.

Accordingly, I find it concerning that, without net neutrality, the incumbents would be able to implement something like zero rating. I could see a world where one ISP silently tests zero rating, they find that it can boost short-term profits, they implement it, and the rest of the industry follows. Who knows!

We need government and net neutrality to step in when protecting something this fundamental, even if doing so risks potential upside. I trust the market to find the most optimal solution. I would rather not discover that optimal solution to be one that sacrifices free access to information.