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Has big business won; has net neutrality died in America?

Posted by on April 28, 2014.

Tom Wheeler – doesn't want net neutrality

Tom Wheeler – doesn’t want net neutrality

After being a long-term supporter of net neutrality, the American Federal Communication Commission (FCC) has taken an axe to it. The current chairman Tom Wheeler is proposing to allow broadband providers to charge larger providers larger fees. This mirrors the view of Digital Agenda commissioner Neelie Kroes in Europe. Both claim that it will not negate the principles of net neutrality; and both are attempting to pull the wool over our eyes.

The generally accepted definition of net neutrality was described by the European Data Protection Supervisor Peter Hustinx in October 2011:

The concept of net neutrality builds on the view that information on the Internet should be transmitted impartially, without regard to content, destination or source, and that users should be able to decide what applications, services and hardware they want to use. This means that ISPs cannot, at their own choice, prioritise or slow down access to certain applications or services such as Peer to Peer (‘P2P’), etc.
Net neutrality: an introduction and opinion from the European Data Protection Supervisor

Neelie Kroes

Neelie Kroes– does not want net neutrality

Wheeler and Kroes now both wish to allow providers to prioritise some traffic (on payment of a suitable fee, of course) for the larger content providers. Netflix has already agreed to pay Comcast more for a better service. But the simple math is that from a fixed pot, you cannot give more to one person without giving less to another. By prioritizing some traffic, the ISPs will necessarily penalise others.

In America the new proposals follow a court case in February that declared the old genuine net neutrality rules of the FCC to be illegal. The basic reason was that the ISPs do not fall within the FCC’s regulatory remit. The easy solution would have been for the FCC to redefine the providers as common carriers (which it could do) and bring them back under its regulatory remit. It chose not to do so. Like Kroes, Wheeler is now firmly under the sway of big business.

The effect will be twofold. Prices will rise and innovation will stall. Those providers who find it necessary to pay the broadband providers more to remain competitive will not pay out of their profit — they will increase their subscriptions so that users pay. That’s called capitalism: maximise profits and ignore the consumer.

Innovation will also stall. New fledgling companies with new services will never be able to compete with the big established companies. They will not able to afford the premium services and will be at a service disadvantage from the word go. By effectively buying up the available bandwidth, the big companies will starve the innovators.

This looks like the death of net neutrality in America under Wheeler. It’s clinging on in Europe despite Kroes. Her style of false neutrality was rejected earlier this month by the European Parliament. But that’s not the end of it. Parliament,s decision needs to be ratified by the national governments — which means that it has still got to get pass that friend of big business and scourge of the people, David Cameron.

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Submitted in: Expert Views, Kevin Townsend's opinions |