The Internet was jubilant when the Federal Communications Commission (FCC) officially issued its net neutrality rules in February.
And then, nothing happened.
Since net neutrality rules officially came into effect on June 12 Internet providers have not raced to speed up Internet speeds, and a single complaint has been filed with the Federal Communications Commission (FCC). Now that net neutrality has become a catch-all term for anything that people don’t like, it is important to distinguish what is happening here.
Net neutrality traditionally means treating all data equally regardless of the content; no speeding up or slowing down certain content on the last mile which is the lines connecting the ISP to the subscriber. In essence, Comcast can’t charge Netflix to speed up its service on the last mile, which is called “paid prioritization.” The argument is that only big players, such as Google and Amazon, can afford to pay the “tolls” for paid prioritization, and in turn smaller Internet services are unable to compete.
Except, that does not really happen.
The complaint facing the FCC deals with interconnection, which is the connection between a content provider and the ISP – not the last mile. ISPs charging to connect to their network is not prohibited under the new net neutrality rules per se, but the new rules allow the FCC to determine if these interconnection agreements are “just and reasonable.”
In some sense, interconnection agreements provide a loophole for net neutrality because some large content providers, such as Google, can build delivery infrastructure and pay to send their content directly to ISPs giving them de facto faster speeds.
So when Netflix complained last year that Comcast was violating network neutrality, it really wasn’t. Comcast was demanding that Netflix pay an interconnection fee to connect Netflix’s network to theirs because Netflix was an enormous bandwidth hog.
For the most part, instances of true net neutrality violations are rare and it is not always clear if they help or hurt consumers. For example, in 2008 Comcast did not count their Xfinity video service against Xbox 360 users’ data-caps. This may cause consumers to dump Netflix in favor of Xfinity, but it also saves Xfinity users in data fees.
These kinds of issues with interconnection agreements and paid prioritization could be solved with a dose of the free market.
To be continued…