http://www.latimes.com/business/la-fi-net-neutrality-washington-20180306-story.html\
Summary:
Last November, the FCC voted to repeal net neutrality, and there was a lot of anger over that vote. On February 22, the vote was made official in the Federal Register, and as of now, the repeal will be in affect by April 23rd.
Washington, however, has become the first state to take net neutrality issues into its own hands, enacting its own rules to protect net neutrality in their state. According to Jay Inslee, the decision only makes sense as "we know that when D.C. fails to act, Washington state has to do so." Washington's bill prevents internet provider from blocking content or interfering with traffic, which is essentially what net neutrality is. Oregon has passed similar legislation, although not with many of the requirements in Washington's bill. Several other states have also introduced legislation that has not passed, and in January, 20 states sued to try to prevent the net neutrality repeal. Governors in Hawaii, Montana, New Jersey, New York and Vermont have signed executive orders that to some degree protect net neutrality (or at least highly incentivize companies to follow it).
Big telecom companies have stressed that net neutrality rules "could undermine investment in broadband and introduce uncertainty about what are acceptable business practices," while net neutrality advocates say the FCC decision harms innovation in internet companies, may make that market less competitive, and pits consumer interest against big business.
Analysis/opinion/connection to econ:
This issue has a lot to do with what we have been covering in class -- the ideas of market structures and competition. Both arguments for and against net neutrality revolve around the health of the market, the ability for companies to compete and enter those markets, and the ability for innovation.
An argument for net neutrality is that it allows new businesses to grow unimpeded. They can compete on an equal playing field and help grow the economy. Without protection from net neutrality laws, those businesses could fall prey to a pay-to-play system -- because small businesses do not have the deep pockets of established ones, they cannot pay as much to have their websites and data prioritized over the Netflixes and YouTubes of the world. If smaller businesses cannot reach potential customers or viewers, it cannot succeed. This difficulty in entry would make internet content a very monopolized or "oligopolized" industry, where the biggest sites would win.
On the other hand, net neutrality hurts the industry of internet service providers. It outlaws competing business models, which are good for customers and the economy, and just limits what ISPs can do. If net neutrality would go away, neutral business models could still work, it just opens the door for more.
I personally do not think that the average consumer will be worse off without net neutrality. Perhaps the average user could experience lower rates that suits their particular usage, as removing net neutrality regulations can allow internet providers to experiment with different methods and business models that can better compete with each other for purchase. If everyone really wants neutral service, they can pay for neutral service, but perhaps if people want better prices, they can prioritize the large websites that they already use anyway. The main hostility towards the legislation is probably for internet content providers who would need to pay more to give their content a greater reach, and as users, we can be easily brainwashed by what we read on those sites. I personally don't see it as a bad thing for the internet, especially in the long run (I guess this also relates to high elasticizes of markets in the long run).
Questions:
1. I did not talk about this above, but I think the question about who has power to regulate online activity is important. Can states have their own internet regulation? Should they just follow federal guidelines? Will a commerce or supremacy clause argument override what Washington has done?
2. Why do you think net neutrality has become such a political issue?
3. What do you think about net neutrality and it's pending repeal?
6 comments:
I feel that with the pros and cons of net neutrality, it is hard to say which side is better in the long run. It is always to protect the "little guy" - at least in this situation - because it keeps the information we see more various and keeps us from following one site or one group of sites that feed us what we want. However, even with all the sources at our disposal, it's not like we really take advantage of it. I think that putting too much power into the hands of a few large companies might be dangerous, and back for the market, but at the same time, a free market seems to work out in the long run in most cases. Honestly, I don't really understand the situation well enough to have a definite opinion on it. I think it will be interesting to see how it plays out, and how the market reacts to the removal of such restrictions.
I want to mention that the issue with net neutrality isn't exactly that it is particularly bad in itself (of course it is, but it may or may not be as significant as people may say), but I've read from people who work in Comcast and stuff that it's actually the first step in completely taking control and possibly monopolizing the cable and internet markets, which I personally think is really scary. So I'm very supportive of the fact that states are taking initiative in upholding net neutrality, and hopefully this decision by Washington won't be blocked by the FCC or whatever.
Jason, when you mention the internet market, are you referring to the market for internet service (ISPs) or the market for internet content (websites, or whatever)? I think that without net neutrality regulations, it opens up the internet service market, which would make monopolization harder, although I do see how a content provider like google could just pay a lot and prioritize its content in front of everyone else's for consumers who receive non-neutral service. I do think neutral internet will probably remain an option as well, people will just be paying current prices as opposed to possible lower prices for non-neutral services.
The FCC's title II was passed in the 1930s. The chairman Tom Wheeler applied it to the internet around 2015. While title II protected net neutrality, it also classified ISPs as common carriers, meaning that the government could have complete control of ISPs, including the ability to price fix. While Wheeler promised he would not abuse this authority, service providers were scared of any chance of them becoming a public utility (at any time a new head could ignore that promise), so they lobbied hard against title II and a Republican FCC board introduced the Restoring Internet Freedom bill, making sure that title II didn’t apply to the internet anymore. The media and public perceived this as an attack on net neutrality, saying that the repeal of title II would allow ISPs to create ‘cable packages’ or allow them to receive money from big corporations to slow their competitors’ websites down.
To answer your last question, The reason this became so political was because of media hype and oversimplification. During the FCC repeal process, the media labeled this as “corporations vs people” giving everybody these incredibly black and white political cartoons and slogans to spread everywhere. This wasn’t even a matter of fake news, it was the real news not even giving us a basic story.
ISPs, in my opinion, have no real incentive to create ‘packages’. If a customer uses Netflix 99% of the time, why charge them just to only use Netflix when you could just charge them more to use Netflix + the rest of the internet that they don’t use. The only real concern about the repeal of Title II is throttling. Under Pai’s new plan all instances of ISP throttling have to be made transparent and need to be reviewed by the FTC to determine whether or not they are anticompetitive. In some cases, applications like BitTorrent might be slowing down the rest of the network down, justifying throttling. In others, say Comcast making NBC’s website faster to boost traffic to their own company’s website, it wouldn’t. Because of this, I feel like these new state laws are almost pointless - a solution looking for a problem. However, it seems completely constitutional as there is no federal law preventing any net neutrality state law.
I would like to start by stating that I am a strong advocate for internet privacy, and have commented on the importance of maintaining net neutrality to that purpose when the bill was in the news last year. However, it is important to see net neutrality as an anti-monopolistic tool too. If we do not support telecommunication companies, we may soon face a monopoly as Jason stated. We already see a sort of oligopoly in this industry, and strengthening the leading companies would not be beneficial for the economy. Instead of granting more power to these corporations, we should be restricting them and allowing for more competition.
While in the end, the power lies in the federal government due to the supremacy clause, states should work towards voicing their voicing their concerns. It is possible that Washington's decision may be overridden, but at least they are taking the first step.
I think net neutrality has become a political issue since pretty much everything is turning into a political issue. Especially since it deals with money and monopolies and the like, the government is sure to stick its hand into the fray.
I think, like almost all reasonable minded individuals, that net neutrality should be available to all. The resource of the internet is far too great to be limited by greedy companies. The idea of repealing net neutrality makes no sense except for those who benefit from ISPs generating more money. It is confusing to me as to why someone who would not make gains from the repeal of net neutrality would vote to repeal it. While I would say it is due to the lack of information and people only voting for their party, I don't want to make that assumption.
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