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Network Neutrality Explained

Finally! Someone came up with a simple explanation of why network neutrality is important (even vital). David Auerbach, in Slate, makes an excellent analogy:

In the late 1990s, the deregulation of the California utilities—which forced them to sell off their power supplies to independent electricity wholesalers—proved to be a disaster. The magic hand of the market was supposed to bring down energy fees for all. What happened instead was that “efficient markets” turned out to be nothing of the sort. In 2000, market manipulation, artificial scarcity created by shutting down power plants to reduce supply, and deliberately inferior service resulted in blackouts and brownouts, an 800 percent rise in energy prices, and lucrative profiteering by Enron. Southern California Edison and Pacific Gas and Electric went bankrupt, and the whole crisis cost somewhere upward of $40 billion.

Electricity wholesalers such as Enron are akin to Internet service providers such as Time Warner and Comcast in important ways. The electricity wholesalers had incentives to starve the energy market in order to extract greater fees from utilities and consumers. ISPs have similar incentives to manipulate their bandwidth in order to extract fees from websites (such as Netflix and YouTube), as well as not build out any infrastructure that would make bandwidth cheaper or make your Internet faster.

This is, in fact, what is already happening.

Auerbach goes on to give concrete examples of this. Large ISPs are deliberately creating “bandwidth brownouts” until they get paid off, sort of like a data protection racket. “You’ve got a nice internet there. Shame if anything should happen to it.”

Over at Vox, Matthew Yglesias provides even more proof that broadband carriers are deliberately creating scarcity, and then lying about it. The industry claims that broadband investment is going up, but in reality it is going down. Way down.

Meanwhile, ISPs are launching a PR campaign to shamelessly scare you away from supporting net neutrality. As Brad Reed on BGR puts it, the ISPs had a good thing going — including former cable lobbyist as head of the FCC — but they couldn’t help themselves and got greedy. Now they are facing a backlash.

Who will win? It is hard to say, but it is clear that the only thing that will keep our internet free is continued pressure from us. Because the big ISPs like Comcast and Time Warner sure don’t care about their customers.

UPDATE: The EFF has created a website that makes it easy to tell the FCC how you feel about net neutrality.

UPDATE 2: The FCC has approved a plan that will end net neutrality, by allowing telecoms to charge content providers extra for faster service.



  1. Tim Crosby wrote:

    Like many of the invisible self-employed, I’ve constructed a career from the opportunities that an unfettered Internet provides. While the financial interests of the big boys are well represented in this discussion, some thought should be given to the impact this trend would have on the the “invisible economy.” In terms of consumer spending, this portion of the economy is playing a vital role in any kind of recovery. Loss of access or dramatically increased cost of access will have a significant effect on anyone not in the the investor class. This is about a lot more than streaming movies, folks!

    Thursday, May 15, 2014 at 8:27 am | Permalink
  2. ThatGuy wrote:

    Been watching a lot of this guy’s channel lately, and this video sums things up pretty nicely. Also colorful tubes.

    Thursday, May 15, 2014 at 9:20 am | Permalink
  3. Jon wrote:

    Infrastructure costs money, and we Americans seem to be more interested in keeping our own tax rates low while hoping that we can outlast what we KNOW will inevitably collapse, than to pay for preventive maintenance.

    Preventive maintenance is a cost that cannot be justified until something fails. AFTER it fails, the cost can be calculated.

    Thursday, May 15, 2014 at 1:32 pm | Permalink
  4. Iron Knee wrote:

    Jon, I totally agree with you in general, but in this case we already gave a TON of money to the telecoms to upgrade their broadband and they stiffed us. See$320_billion_broadband_rip-off

    Here are two quotes from that article:

    The scam was simple. Starting in 1991, Verizon, Qwest and what became AT&T offered each state — in true “Godfather” style — a deal they couldn’t refuse: Deregulate us and we’ll give you Al Gore’s future. They argued that if state Public Utility Commission (PUCs) awarded them higher rates and stopped examining their books, they would upgrade the then-current telecommunications infrastructure, the analog Public Switched Telephone Network (PSTN) of aging copper wiring, into high-speed and two-way digital optical fiber networks.

    The broadband con has been played out across the country. In California, Pacific Bell (now part of AT&T) claimed it would spend $16 billion and have 5.5 million homes wired by 2000. Instead, after a merger with SBC in 1997 (renamed AT&T in 2005), it secured state deregulation and simply stopped building out the fiber-based broadband infrastructure. On the East Coast, things were pretty much the same. Bell Atlantic, which covered New Jersey to Virginia and is now part of Verizon, claimed it would spend $11 billion and have 8.7 million homes wires by 2000. And in Connecticut, SNET (now also part of AT&T) promised to spend $4.5 billion and have the entire state rewired by 2007. In the mid-West, the story was similar. Ameritech (now part of AT&T and which controlled five states, including Illinois and Ohio) claimed they would have 6 million homes wired by 2000. For Ohio, Ameritech claimed it would rewire every school, library and hospital with fiber by 2000. None of these promises have been realized.

    Thursday, May 15, 2014 at 5:16 pm | Permalink