House Republicans have managed to pull off a
high profile rejection of a key tech-related component of the Obama
administration's initiatives. In control of the House for the first time in four
years, Republicans have voted to overturn so-called
"net neutrality" rules proposed earlier this year by the Obama
The rules had previously been approved by the
Democratic House, but were stalled in the Senate as Republicans awaited the
prospect of regaining control of the House in the new year.
I. What's Net Neutrality and What Did
This Bill Mean?
In the early 1900s the American Telephone and
Telegraph Company (AT&T) basically
held a monopoly on phone service in the U.S. It owned all the
lines and it sought to crush or buy out any small competitors entering the
market. Its tactics are viewed in retrospect as
"anticompetitive", but at the time the government did little to act.
Today cable internet service providers don't enjoy
the same kind of monopoly, but they do enjoy a market in which there are only a
few players. Most people have access to only one to three cable internet
service providers. The rise of tethered
internet has helped the market become more competitive, somewhat,
adding a few wireless tethering options to the mix.
At best, though, most people enjoy four or five
3G/cable or better internet options.
Worse, the cable and wireless companies tend to
make decisions about pricing and services in mass. Take for example the trend
towards cutting "unlimited" data plans on cell phones -- AT&T and
Verizon both made the switch and now it looks like Sprint and T-Mobile may
follow. While there's laws against collusion (companies making joint
decisions in a loosely populated market), the government can only prosecute
companies if it proves they met and worked out the decision together.
That's typically too hard to prove, so they don't bother.
As a result cable providers typically underdeliver
on their promised speeds and overcharge customers, as they can work together
with their handful of competitors to keep rates high and service quality low.
Further, some companies are eyeing the potential
to gain further revenue by offering faster access to some sites like The
New York Times or Google Search -- who might be willing to pay to give
customers faster access. To get this faster access, independent sites
that didn't pay would
be relegated to slow connections.
And telecoms also wanted to "throttle"
the connections of users who
make full use of their data plans. These busiest users would see
their connections slowed to prevent them from using as much data.
In the face of all of this, the net neutrality
movement was born. Its aims were multifold:
All of these measures were seen as ways of
remedying the relatively uncompetitive internet market, and prevent those in
power from abusing their dominant positions.
The Obama administration's Federal Communications
Commission appointees proposed a series of net neutrality rules that covered
much of those points. It however, cut some deals with the communications
industry that frustrated net neutrality advocates. For example in only
prevented the throttling of "legal traffic" opening the door to
throttle P2P and torrent connections. It also exempted mobile operators
from certain rules and restrictions.
The bill was tacked on to a spending bill that was passed on
December 21, 2010 by the Democratic House. A copy of the FCC's
published rules is available online [PDF].
II. The Death of a Bill
On February 17, 2011 (Thursday), the new
Republican 112th Congress voted to overturn the spending bill before it could
reach a Senate vote. With the death of a bill comes the death of the
legislation to give the FCC power to regulate net neutrality.
Federal courts have already
ruled that current legislation does not give the FCC this
power, so essentially unless another bill passes; the effort to legislate net
neutrality is dead.
Republicans claim net neutrality restricts the
free market. States Republican Representative Steve Scalise,
"We think the FCC overstepped their boundaries. This is something that
should be done and solved in the halls of Congress."
Many Republicans, such as Senator John McCain
(R-Ariz.), argue that any legislation to regulate net neutrality is
an affront to capitalism. They argue for a laissez-faire approach to
Democrats are devastated at the loss of the net
neutrality bill. Democratic Representative Edward Markey says that
telecoms and cable providers are now free to squash small competitors and user
rights, much as they did during AT&T's monopoly era in the early 1900s.
He states, "Verizon's not going to invent anything new. What they
want to do is squeeze competitors."
(The statement appears to allude to the legal
challenge from Verizon in January against the bill, which was filed with
the U.S. Court of Appeals for the District of Columbia.)
III. What's Next for Net Neutrality and the
Republicans seem dead set against preventing
internet service providers from throttling traffic or slowing/speeding up
website access. They also tend to oppose on a state basis allowing local
communities to spend their government dollars to set up independent municipal
internet access -- even if the citizens in that community want the service and
are paying for it with their own tax dollars. They have championed
several efforts to stop
municipal internet projects.
Together these stances serve to cement the power
of a handful of telecoms and cable providers like Comcast, Time Warner, Verizon
Wireless, etc. And that means a fat payday for these players.
Republicans are being rewarded handsomely for
their loyalty. Various telecoms raised millions for John McCain's 2008
Presidential run and they provided free service to his personal ranch.
Many other Congressional Republicans enjoy similar perks, albeit on a
This mean that over time customers can expect to
see slower access to independent sites on the internet, though access to big
corporate sites may speed up slightly. And those who fileshare with
torrents, etc. or who use lots of bandwidth streaming Netflix, etc. will likely
see their connections slowed. Last, but not least, customers may find
themselves having to pay their cable company monthly
fees to access websites on a per-site basis.
Along with the push for metered internet plans,
all of this means that customers will be paying more, while getting less --
less website access, less speed, and less traffic types.
Of course cable providers aren't stupid.
They fought hard for this bill to be overturned. They will likely
try to slowly sneak in these changes to prevent public outcry.