10 Net Neutrality Facts - WMNews Ep. 17

Script written by Angela Fafard With the latest ruling by the FCC regarding 'net neutrality', what does this ultimately mean for you?Welcome to WatchMojo News, the weekly series from WatchMojo.com that breaks down news stories that might be on your radar. In this instalment, we’re counting down 10 crucial facts you should know about net neutrality.

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Script written by Angela Fafard

10 Net Neutrality Facts - WMNews Ep. 17

#10: What Is Net Neutrality?
The Open Internet

The term “net neutrality” refers to the concept where, put into practice, Internet service providers would treat all data equally and would not discriminate against virtual activity like peer-to-peer communications or online gaming by providing less than perfect Internet speeds at potentially higher costs. Net neutrality is often associated with the idea of an “open internet;” which is a theoretical Internet that everyone in the world would easily be able to access. The debate on the merits of net neutrality can be summed up with the simple question: Is Internet access similar to access to electricity or cable TV? On February 26th, 2015, the United States Federal Communications Commission, or FCC, answered that question with a milestone ruling that categorized the Internet as a public utlity instead of a loosely-regulated “information service.”

#9: Why Is Net Neutrality Important?
The Economy

On a grand scale, the 2015 FCC ruling is extremely important to the growing e-commerce industry, as that business relies heavily on Internet access – and, more importantly, on page-loading times. According to a report by eMarketer, global retail e-commerce sales accounted for 5.9% of the total retail market in 2014, or nearly $1.316 trillion in sales. Studies have shown that page-loading times invariably affect sales; so, if service providers – or ISPs – were allowed to sell higher and lower speed access to the internet, this would invariably favor companies that are already larger and more financially stable, and would be a distinct disadvantage for smaller e-commerce businesses. Net neutrality aims to make sure that no website or online activity is treated as more important than another.

#8: Who Supports Net Neutrality?
The Consumer

The main proponents of net neutrality are consumers and large Internet companies like Amazon, eBay, Facebook, Google, Microsoft, Netflix, Twitter, Yahoo and more. The main claim is that, without net neutrality, ISPs would force a tiered service model, thereby leading to reduced competition in the industry and therefore to higher prices for consumers. On September 10th, 2014, supporters of net neutrality aimed to further their cause by staging an “Internet Slowdown” day. Businesses like Kickstarter, Netflix, Reddit, Tumblr, and Vimeo all placed a “Loading…” symbol on their websites to simulate the slowdowns that would be happen to the Internet if net neutrality were not enforced.

#7: Who Is Against Net Neutrality?
The ISPs

Opponents of net neutrality include cable companies, telephone companies, and conservative political advocacy organizations like ‘Americans for Prosperity.’ Their main claims are that net neutrality will limit the Internet’s usefulness, that it sets a precedent for more governmental regulation, and that it will severely limit investment and innovation in broadband network services. Even as far back as 2006, challengers of this concept – including telecommunications giant AT&T – created a now-defunct website called “Hands Off the Internet,” in order to promote arguments against Internet regulation.

#6: Have Other Countries Come Out in Favor of Net Neutrality?
The Outcome

A handful of countries like Chile, the Netherlands and Brazil have all adopted the net neutrality legislation. These nations have amended the concept to fit their telecom infrastructure and industry standards. For example, the Netherlands became the first European country to support net neutrality through a national law, which prevents ISPs from slowing or otherwise deterring access to any kind of content – with certain exceptions. However, this has led to raised rates. The entire European Union followed suit on April 3rd, 2014, when the European parliament adopted a net neutrality amendment to further consolidate member states’ telecommunications policies and protect net neutrality.

#5: Had There Been Previous Rulings on Net Neutrality?
The Legality

The first change to U.S. telecommunications law since the Communications Act of 1934 – which created the FCC – came in 1996, with the goal of making it easier for anyone to get into the comms biz. More importantly, it was the first time the Internet was included in such legal discussions.

#4: What Was the Official Ruling Regarding Net Neutrality?
The Vote

On February 26th, 2015, the U.S. Federal Communications Commission ruled in favor of net neutrality in a landmark vote of 3-2. This means that broadband Internet is now classified under Title II of the Communications Act of 1934, and legally treated as a public utility. This ruling bans ISPs from offering paid prioritization or fast and slow lanes, which means customers will never have to pay for faster connections for certain content. Furthermore, ISPs will no longer be able to block access to or throttle online activity that uses a lot of bandwidth and slows service down.

#3: What Does This Ruling Mean for You?
The Impact

There won’t be any big changes initially for the consumer, as different providers are expected to file legal challenges against the FCC ruling. However, the new classification under which the Internet now falls will prevent providers from charging extra in exchange for faster speeds. Providers will not be able to block or slow service down, regardless of what type of online activity you’re engaging in; meaning, streaming video or reading a blog will run on the same connection. The FCC has stated that there will be no additional taxes or fees under the new ruling, but providers anticipate that new taxes are inevitable, and warn that the cost of broadband might be more expensive in the future as a result.

#2: What Does This Mean for Internet Service Providers?
The Innovation

Internet Service Providers claim that this new law will require more regulation, which will lead to fewer incentives to invest and innovate in broadband. If true, this would be bad news as certain cities in the United States had some of the slowest and priciest broadband access in the world, according the October 2014 report by the Open Technology Institute. The new regulation should also ensure that dominant broadband suppliers will not be able to abuse their market power, providing space for new entrants into the segment in the form of municipal broadband providers for smaller cities.

#1: Is This the End of the Debate?
The Future

The debate about net neutrality is not over, as ISPs are expected to file a legal claim against the FCC and its decision. Republicans in the House and Senate have also proposed a new set of bills that would strip the FCC of its power, especially with regards to Internet regulation. This runs in direct opposition to the will of the White House, as President Barack Obama made clear in a written statement that “we cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas.”

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