Roosevelt Institute | Cornell University

Net Neutrality: An Issue of Economic Access

By Victor ZhaoPublished April 24, 2014

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Net neutrality is an issue of economic fairness. Only by preserving open, equal access for all its users can the Internet's democratic potential be fully realized. Despite the federal court decision striking down its proposed rules, the FCC must continue to advocate for, and work towards, the goal of keeping the Internet open for all.
By Victor Zhao, 4/24/14


January's federal appeals court ruling striking down the Federal Communications Commission's rules on network neutrality is notable in two respects. The headliner, of course, is Verizon's victory in the case and the corresponding loss for advocates of net neutrality regulation. The second, subtler point, however, is that the ruling was very narrow in its decision and did not refute the FCC's ability to enforce "common carriage" laws — those restricting discriminatory or preferential treatment to some over others — in other telecommunication mediums nor its ability to regulate other aspects of Internet use. Given the important role access to the Internet plays in today's information economy, it is critical that the FCC continues to develop new rules to ensure economic fairness even as it deals with the need to comply with the recent court decision.

The critical bottleneck with current technology is the local access network connecting individual customers with long-distance networks. The high costs of establishing and maintaining that physical network have concentrated power in the hands of a few large telecommunication companies. Given free reign and absence of regulation, these companies have the potential to dictate how the Internet runs and operates. Not surprisingly, Internet Service Providers (ISP) claim that in order to have an economic incentive to invest in upgrading their networks, they should have control over traffic through their networks. In particular, they argue for the ability to charge a premium for faster access speeds. This could fundamentally alter the way that the Internet operates, discouraging innovation and experimentation as network owners tailor Internet access to their ideas and preferences. The openness core to the Internet's explosive growth would be lost.

That potential problem has led to calls for rules establishing net neutrality, which would prevent ISPs from favoring or blocking access to any content. Without these rules, telecom companies can charge companies for faster speeds, with these costs eventually being borne by end-users. Net neutrality, in fact, is fundamentally an issue of economic access. Part of the Internet's promise is its democratization of information access, but its dependence on the physical infrastructure provided by an oligopoly of network providers means that it is subject to the same market forces and elite control that causes other forms of economic disparity. Those who cannot afford to pay for faster service would be relegated to the back of the information exchange, perpetuating the structural disadvantages that allow economic inequality to persist.

Moreover, a world without network neutrality also threatens to stifle innovation. Many startup businesses today exist because the power of the Internet allows them to reach dispersed customers in ways that were not possible before the advent of online commerce. Tech successes like Facebook and Snapchat grow by leveraging the power of online connectivity to amass millions of users long before they finally become profitable. Would Facebook have become the dominant social media platform of today if, in its infant years when it had no revenue, it had to compete against faster, better delivery of service from the much larger Myspace? If Snapchat has to pay more for delivery of images (which consume much more data than text) how does that cash flow out affect its growth and its ability to redefine how people message each other?

Ultimately, net neutrality is an issue of economic fairness. Only by preserving open, equal access for all its users can the Internet's democratic potential be fully realized. Despite the federal court decision striking down its proposed rules, the FCC must continue to advocate for, and work towards, the goal of keeping the Internet open for all.