FACT SHEET

Modified December 16, 2011


Net Neutrality

As the Federal Communications Commission (FCC) recently put it, the Internet
 
“…has transformed our nation’s economy, culture, and democracy…[and] has been a launching pad for innumerable creative and entrepreneurial ventures; enabled businesses small and large, wherever located, to reach customers around the globe; allowed individuals in remote parts of America to access information and services previously unavailable to them; and made it possible for the voice of a single citizen—whether in the form of a blog post, online video, or tweet—to influence world events.”1  
 
Given the significance of the Internet, preserving its “openness” – an idea often referred to as “network neutrality” or “net neutrality” – has been a long-standing issue. The debate began in the late 1990s/early 2000s when consumers and online service providers began raising concerns about the ability of broadband network operators –wireline providers such as Comcast and Verizon, and wireless providers such as AT&T Wireless or Verizon Wireless  – to block or degrade content being provided over their networks. In the past few years, policymakers have been considering whether rules should be adopted to prohibit or restrict carriers from blocking or otherwise discriminating against services, applications and devices being used on their networks, and if so, what types of carrier actions those rules should prohibit.

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1Federal Communications Commission’s NPRM, GN Docket No. 09-191, October 22, 2009

Overview

These issues arise in discussions of net neutrality:
  • Whether the FCC has the authority to regulate net neutrality on the Internet.

  • Broadband network operators’ ability to interfere with online services that may compete with their own services.

  • Broadband network operators’ need to reasonably manage their networks; i.e., network operators cannot efficiently operate their networks if they cannot prioritize traffic and/or block harmful traffic.

  • Whether wireless mobile networks – given their mobile nature and spectrum bandwidth constraints -- should be subject to net neutrality rules.

  • Whether regulation would depress private industry’s incentive to invest in broadband infrastructure.

  • Whether some broadband services, referred to as “managed” or “specialized” services, should be exempt from net neutrality regulation.

  • Broadband carriers’ need to try new business models for managing congestion.

  • Whether there is enough broadband competition to make regulation unnecessary.
TAP Academics researching net neutrality include:

Jay Pil Choi of Michigan State University explores how net neutrality rules could affect the growth of broadband services.

Nicholas Economides teaches at NYU’s Stern School of Business. He writes about how consumers would be affected by changes in broadband prices.

Larry Lessig teaches at Harvard Law School. He has written comments to the FCC supporting net neutrality.
 

“As much as anything else, the economic success of the Internet comes from its architecture. The architecture, and the competitive forces it assures, is the only interesting thing at stake in this battle over ‘network neutrality.’” From his article “Another Deregulation Debacle,” The New York Times, 8/10/2010


Tim Wu, currently on leave from Columbia University while he serves as a senior advisor with the Federal Trade Commission in the Office of Policy Planning, testified in favor of net neutrality before the FCC and Congress, emphasizing how neutrality could encourage innovation.
 

Christopher Yoo of the University of Pennsylvania Law School writes about how net neutrality would affect networks.
 

“The vigor with which the FCC has pursued allegations of improper network management suggests that the regulatory structure may already be in place to ensure that consumers are both protected and able to enjoy the Internet’s tremendous promise in the future.” Quoted in CED Magazine, 7/31/2010


These sources are a good place to start in understanding net neutrality issues. This op-ed, “Public Must Fight to Maintain Net Neutrality” by Larry Lessig and Ben Scott, outlines the case for net neutrality. Economists Robert Hahn and Scott Wallsten argue in “The Economics of Net Neutrality” that proposed rules might be harmful, and propose alternatives focused on promoting competition and network deployment. Robert Atkinson and Phil Weiser propose a “Third Way” in their article, “A ‘Third Way’ on Net Neutrality,” calling for a compromise – one later included in the net neutrality rules proposal the FCC put forward in 2009. An article by Andrew Odlyzko traces the history of success and failure for similar rules. The last two papers offer contrasting views of how net neutrality could affect consumers and innovation. In “’Net Neutrality,’ Non-Discrimination and Digital Distribution Through the Internet," Nick Economides argues that letting broadband carriers charge more could hurt consumers. But Christopher Yoo takes the view that net neutrality rules could harm consumers in “Network Neutrality, Consumers, and Innovation.”

Recent Developments
In 2005, the Federal Communications Commission (FCC) issued a Broadband Policy Statement, listing four principles to support an open Internet. In 2009 the FCC proposed adopting specific net neutrality rules. But a decision of the DC Circuit Court called into question the FCC’s authority to regulate broadband networks, including its authority to set net neutrality rules.2 The FCC, the industry, and Capitol Hill tried to reach consensus on net neutrality rules,3 but failed. On December 21, 2010, the FCC announced its Open Internet Order, which Commissioners Baker and McDowell dissented. On November 20, 2011, the Order went into effect, including rules that require broadband internet providers to disclose information about network management, and restrict broadband internet providers from unreasonable discrimination or blocking access to legal content and applications. The rules also aim to limit “pay for priority” service. The rule requires mobile broadband carriers to follow transparency and basic no blocking rules. Verizon Communications is suing the FCC, claiming the agency does not have authority to issue the rules. Free Press, a nonprofit organization, as well as several other organizations, filed lawsuits against the FCC arguing that the rules do not go far enough in furthering the promise to preserve an open Internet. All of the various appeals filed around the country have now been consolidated in the United States Court of Appeals for the District of Columbia in Washington, D.C. It will be well into next year, after written briefs are filed and oral arguments are heard, before the D.C. Circuit issues an opinion on the various appeals.
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2 Cite U.S. Court of Appeals for the 9th District, Comcast v. FCC decision, April 2010.
3 See, e.g., CITE Verizon – Google Legislative Framework proposal, August 2010.
Upcoming Events
To view a calendar of events of relevance to TAP academic work, please see the TAP Events page.

Media Contact

For media inquiries on a range of TAP topics, or for assistance facilitating interviews between reporters and academics, contact TAP@techpolicy.com.

Key Legislation

In January 2011, S. 74 the Internet Freedom, Broadband Promotion, and Consumer Protection Act of 2011, which would establish net neutrality rules, was introduced by Senator Maria Cantwell.
 

In February 2011, Rep. Greg Walden introduced H.Amnd.80 to H.R.1, which would block the FCC from using funds to implement net neutrality.
 

In April 2011, Rep. Greg Walden introduced H.J. Res. 37 to repeal the FCC’s net neutrality rules.
 

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