I wrote this earlier today to explain to a friend in layman’s terms what net neutrality is and why it’s needed. I started with how the Internet works, described how it might operate without net neutrality and then touched on a few other counterarguments and points. I figured it might be useful to some other people, so I’m posting it on my blog.
As I’ll cover in a separate post tomorrow, the Internet community has done a good job of condensing this complex technical subject into simple terms and actions. That simplification is what has allowed so many people to voice their support for net neutrality. Those in opposition to net neutrality cry foul over this fact, but I don’t see that the reduction in technical language has in any way misrepresented the debate. However, it does mean that many people who support net neutrality may not fully understand the subject. Hopefully this explanation may help enlighten anyone interested.
The good news, of course, is that the FCC passed strong net neutrality rules earlier today. Reclassifying the Internet as a public utility will preserve the open Internet we’ve enjoyed for over 2 decades for the foreseeable future.
As a disclaimer, I wrote most of this based on what I’ve read and understood about net neutrality. I don’t have any particular academic or professional technical background in this, so there could be errors. That said, I have read extensively on the topic over the years and I’m fairly confident in my understanding of the material.
Right now, everyone pays for access to the Internet—a distributed network of infrastructure built by private companies. When you sign up with your local ISP, you expect to have a connection that allows you to access any websites, services or content on the Internet. Your subscription comes with a speed cap, but that cap applies universally—it doesn’t vary depending on what content or sites you’re visiting. It’s also worth noting that the cap applies to the wire going to your house. Somewhere your connection gets bundled with other neighborhood traffic at a junction box or central office on a network line with higher bandwidth.
The part that I don’t think gets discussed enough is that the sites you visit are also paying for access to the Internet at their end. And unlike your subscription, they also pay for the amount of bandwidth they’re using. For companies like Google, Amazon and Netflix bandwidth costs are astronomical and probably run into millions of dollars every month. Their payments mostly go to companies that develop and maintain the Backbone, which is the central infrastructure on the Internet. The Backbone is maintained by some companies, like AT&T, that also happen to offer direct-to-consumer Internet service. Other companies, like Level3 Communications, do not do business directly with consumers. These companies build network infrastructure and then charge the people whose traffic passes through. You’ve likely accessed content that traveled on Level3’s networks, but you’ve never paid Level3 directly. So content providers on the Internet are far from getting a free ride on the backs of ISPs.
Bandwidth is finite. The speed you pay your ISP for refers to the line going to your house. But to enjoy that speed when you watch Netflix, it must maintain that speed across the network all the way to Netflix’s server. If everyone in the neighborhood is streaming House of Cards after dinner, you may experience a slowdown just because the bandwidth isn’t available from your ISP. It doesn’t matter if you’re not using the full speed of your Internet connection. A Netflix video stream is about 3mbps, but you might experience buffering issues even if you’re paying your ISP for 15mbps service. This is completely natural.
A large part of why the Internet works this way is because up to now it’s been impossible for ISPs to monitor or identify specific traffic, much less discriminate. Your ISP couldn’t tell what the packets heading to your house contained or where they had come from. By now, tools and network appliances have been developed that allow identification of traffic based on the data type (ie. streaming audio/video vs. a data file) and origin (i.e. Netflix, Google, etc). Thus ISPs now have the tools to potentially target specific data streams based on content or origin and handle them differently. The model of granting unlimited Internet access for a flat fee each month didn’t develop because ISPs were feeling altruistic. It was the only way they could sell service to their consumers.
So without net neutrality, ISPs could now decide to prioritize some traffic over other traffic. For instance, Hulu is partly owned by NBCUniversal, which is owned by Comcast. Comcast might decide that all traffic from Hulu gets carried quickly over their network while other streaming video content gets slowed down. Now maybe when everyone is watching House of Cards after dinner and maxing out Comcast’s bandwidth, the one guy watching Hulu doesn’t experience a slowdown at all. Maybe even in the middle of the night when bandwidth is abundantly available Netflix still experiences slowdowns, but Hulu doesn’t. In this scenario, Comcast can go to Netflix and essentially extort them. They can point to all of Netflix’s customers who have Comcast Internet and charge Netflix to not be treated inferior to their own competing service, Hulu.
There’s evidence Comcast has already done this. This chart shows Netflix’s speeds on Comcast steadily declined until February 2014, when Netflix agreed to pay Comcast millions of dollars for preferred access. I’m guessing Comcast didn’t just happen to coincidentally add a ton of bandwidth to their network in February and March, immediately after they reached a deal. More likely they had appliances slowing down Netflix’s traffic, maybe even tightening the screws each month like a Mafia boss, until Netflix relented and agreed to a contract. Then with a flip of a switch, Netflix’s share of bandwidth could be restored.
One guy also discovered that Verizon was throttling his data from Netflix. When he streamed Netflix directly, it was slow and not the highest quality stream. When he turned on a VPN connection (which encrypts the data between him and the VPN server) Verizon could no longer identify that the data was streaming video from Netflix. Suddenly he was getting a high quality video stream without any buffering issues. This wasn’t a bandwidth issue. Clearly he had a fast enough Internet connection and Verizon’s network bandwidth was not maxed out. It pretty much proves Verizon had rules that discriminated against Netflix’s data, slowing it down. As soon as they couldn’t tell it was Netflix’s data, it moved across the network much faster.
So net neutrality will now make sure that ISPs can’t use tactics to discriminate against certain traffic. As a public utility, ISPs will have to meet minimum standards of service, so all traffic will have to move at a reasonable pace and if that’s not possible, they’ll have to build more infrastructure. This is fundamental to how innovation happens on the Internet. If the kind of throttling that’s possible today were available 20 years ago, Barnes and Noble could have paid ISPs to slow traffic from Amazon. Without innovating at all Barnes and Noble might have remained the highest volume book retailer in the world and Amazon might have gone out of business. We wouldn’t be able to enjoy the myriad of innovative products and services from Amazon we now take for granted. The risk today is that discriminatory practices on the Internet could stop the next Amazon from ever developing.
Some people argue that net neutrality is fundamentally unfair to ISPs. If the ISPs built the network, it’s private and if you’re streaming a lot of Netflix then your ISP should be able to charge Netflix for that data moving across their network. This begs the question about what exactly you’re paying for when you subscribe. As I mentioned, Netflix pays for their access to the Internet at their end. And you’re paying for your access at your end. So your ISP charging Netflix is like charging them twice: once to enter the Internet and again to exit at your house. And if you don’t have an alternative way to access Netflix through another ISP (most people only have one or two options for Internet access) then that’s a ripe opportunity for the ISP to extort content providers. Additionally, you have ISPs like Comcast who own content providers that they might want to prioritize over competitors.
There’s also evidence that ISPs are making plenty of money with the current model of simply charging consumers for access. Time Warner had to reveal that it’s profit margin as an ISP is 97% and it’s reasonable to assume other ISPs have similar margins. They can certainly afford to build more infrastructure and they don’t need to charge content providers to preserve their business.