Unless the Federal Communications Commission takes a stand, American consumers stand to lose their open access to the Internet, while providers will rake in even greater profits.
Despite our faith in the American dream, mounting costs for high-speed Internet threaten the remnants of equal opportunity we rely on. A widening gap separates Americans who can access education, health care information, or news at the click of a button from those who are barred by profit-obsessed Internet service providers (ISP). Yet the U.S. Court of Appeals in Washington, DC ruled against net neutrality rules last month, allowing ISPs to collect additional fees from companies that want faster and more efficient delivery of their content. Discrepancies in Internet access are set to worsen unless the Federal Communications Commission (FCC) gets its act together in time.
With ISP highways charging exorbitant tolls for content providers, anyone whose pockets are not deep enough may find their content relegated to slower pathways. Smaller providers of online content, such as nonprofit news organizations, could end up fighting to survive while large conglomerates like Google, Netflix, or Amazon bake additional expenses into their budgets. End-users are likely to find it slow and cumbersome to download or view anything not featured by large, wealthy companies who already dominate information media. As Craig Aaron, CEO of the consumer advocacy group Free Press, summed it up, “Verizon … will race to turn the open and vibrant web into something that looks like cable TV. They’ll establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else.”
This has huge implications for America’s painfully consolidated media industry. In 1983, 50 major companies controlled the information dished out to American audiences. This number has now fallen to – gulp – six. Or to put it differently, 232 media executives determine the information that reaches 277 million Americans. To make matters even worse, giants such as Time Warner, ruling the roost as both Internet providers and media producers, now have a huge advantage. They can favor their own media channels, simply by virtue of being more diversified and more sizeable than their rivals.
FCC Chairman Wheeler claims, “The FCC has the authority – and has the responsibility – to regulate the activities of broadband networks.” Thankfully, there is still time for him to act upon this ambition. He can still help prevent large Internet providers from exploiting end-users the way this recent court decision would allow them to.
Former FCC Chairman Michael Powell exempted high-speed Internet from common carriage regulations in 2002, regulations that would have imposed anti-discriminatory and anti-blocking rules on ISPs. He determined that the Internet was only an “information service,” second to common carriage facilities like telephone services as a medium of communication. The last 12 years saw the Internet become the global pinnacle of communications and economic growth, a necessity along the lines of electricity or telephone lines. But the FCC remained in denial, sticking to an obsolete stance that places the Internet on a lower rung than common carriage services. This meant that regulating ISPs for anti-discriminatory net neutrality laws required awkward legal gymnastics.
These legal loopholes have given way, and the fragile net neutrality laws have been dismantled. But Verizon’s triumph has given new life to the case for elevating the Internet to common carrier status. Such a change will force ISPs not to limit or block content, in accordance with the common carriage communications law that keeps telephone lines open to all users at the same cost. If the FCC takes this step, it will be easier for them to do the job they have promised to do!
As Susan Crawford, a Roosevelt Institute Fellow and former Special Assistant for Science, Technology, and Innovation Policy for the Obama administration, pointed out in a recent op-ed in The New York Times, without common carriage status, “we’ll end up with a digital replica of pay TV, rather than the Internet that has prompted such economic growth and innovation in America.”
Wheeler claims that competition is vital in the Internet industry, he claims. Yet he fails to mention that competition is also non-existent in America’s Internet providers. In neighborhoods across America, Internet users have no choice due to monopoly-style deals between local governments and ISPs.
Supporters of Verizon’s anti-net neutrality stance favor a more autonomous, less-regulated Internet industry. But for an average American Internet subscriber, this “two-sided” market may be little more than a euphemism for ISPs doubling their profits. Right now Verizon may promise no change in consumers’ ability to access and use the Internet. But by charging Netflix or Hulu extra fees to reach end-users, Verizon is likely to make these subscriptions more expensive for everyone. Consider a vast number of online media companies in the same position, and you’re looking at more than double-digit profit increases for ISPs, along with rising prices and declining choice for American Internet users.
Is this what competition looks like? In Verizon’s proposed two-sided marketplace, yes.
If the FCC is truly looking to “exercise its authority to make sure broadband providers operate their networks in the public interest,” the time is ripe to take the first step and confer common carriage status on ISPs. True, this change will require some tricky political maneuvers. But the alternative is to stand by and watch online media become more restrictive and less accessible in a country where high-speed Internet is already a scarce commodity.