Net neutrality regulations would mandate that essentially all data on the Internet be treated the same by Internet service providers (ISPs), with many supporters calling on the FCC to prohibit “Internet fast lanes.” But are there situations in which different treatment of broadband traffic is good? What role should the government play in ever-changing broadband markets?

1. Net Neutrality and the Future
of the Internet
Brent Skorup, Research Fellow in the
Technology Policy Program

2. Objectives
• Briefly explain how the Internet works.
• Show that “net neutrality” is a complex idea with no
fixed definition.
• Explain common and future exceptions to “neutral”
behavior.
• Describe what the FCC is pursuing regarding net
neutrality.
mercatus.org

3. Why It’s Important
• New common carrier
regulations?
• Continue to rely on antitrust and
consumer protection?
• A Third Way compromise?
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4. Congressional Policy
In 1996, Congress amended the 1934 Communications
Act:
It is the policy of the United States . . .
to preserve the vibrant and competitive
free market that presently exists for the
Internet and other interactive computer
services, unfettered by Federal or State
regulation.
47 U.S.C. § 230(b)
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5. The Internet
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6. Broadband carries many services
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7. Why Doesn’t My Netflix Work?
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8. Broadband Constraints
• Broadband transmission is constrained
and networks suffer from congestion at
peak times.
• Constraints are geographical and
technological.
• Overprovisioning is expensive. There
are tradeoffs between building more
capacity and network management.
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9. Broadband Congestion Responses
Neutral Response – “Best Efforts.” Drop
packets randomly.
Non-neutral Response – “Quality of
Service.” Make intelligent choices about
which packets to drop based on type of
application.
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10. What is Net Neutrality?
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11. What is Net Neutrality?
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12. What is Net Neutrality?
Wikipedia: “the principle that Internet
service providers . . . should treat all data
on the Internet equally . . . .”
GigaOm: “a long-time policy that prevents
[ISPs] from giving special treatment to
some websites at the expense of others.”
ACLU: “means applying well-established
‘common carrier rules’ to the Internet in
order to preserve its freedom and
openness.” mercatus.org

13. What is Net Neutrality?
“Part of the problem is that net neutrality is like
an inkblot into which people project their fears
and hopes. There are at least seven different
related but distinctive meanings in which the
term is used.”
Eli Noam, Columbia University
mercatus.org

14. What is Net Neutrality?
• “Neutrality, as a concept, is finicky.” – Tim Wu,
Columbia Law
• “The network is not neutral and never has
been,” therefore, “[y]ou’ve got to discriminate
between good blocking and bad blocking.” –
David Clark, MIT
• “The net neutrality debate isn’t black and
white. Participating in it fully means wading
into those shades of gray.” – Nancy Scola,
Washington Post tech journalist mercatus.org

15. What is Net Neutrality?
On the “last-mile” network:
• Transparency about network
management.
• No blocking the access of users to
websites.
• No fast lanes and no different
quality grades for service.
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16. Not Net Neutrality
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17. Also Not Net Neutrality
Professor Tim Wu at a House hearing
on net neutrality said FCC oversight
of the Internet should entail “not
merely competition policy, but also
media policy, social policy” and
“oversight of the political process.”
mercatus.org

18. Net Neutrality Enters the Public
Discourse
• Madison River (small ISP) blocks
Vonage (2004)
• FCC adopts open Internet “principles”
(2005)
• Comcast blocks BitTorrent (2007)
– Initial denial
– Agreement between Comcast and BitTorrent
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19. FCC Tries to Enforce Rules
• Comcast v. FCC (2010)
– FCC loses
• December 2010 rules
• Verizon v. FCC (2014)
– FCC (mostly) loses
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20. Why Net Neutrality?
• ISPs will “censor” political speech ISP executives and
advertisers dislike.
• “The Internet has always been neutral and ‘end-to-
end.’”
• Small websites and startups cannot afford fast lanes.
• ISPs will charge anticompetitive “tolls” to competing
services.
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21. Non-neutrality in Wireless
• “Voice Plus” – phone plans that provided
limited, basic access to online content
• Zero rating – data that does not subtract
from a monthly data limit
– T-Mobile Music Freedom
– MetroPCS and YouTube
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22. Beneficial Blocking and Fast Lanes?
“Former Obama Tech Czar: ‘Fast
Lanes’ Consistent with Net Neutrality”
– May 2014 TIME story by Zeke J. Miller and Haley
Edwards about Aneesh Chopra, former Obama
CTO
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23. Broadband carries many services
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24. Beneficial Blocking and Fast Lanes?
• Voice over Internet Protocol (VoIP)
• Video on Demand
• Gaming
• Telemedicine, teleconferencing, Skype
video
• Whitelists and blacklists
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25. 2013 Pew Study
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26. Net Neutrality at the FCC: Part III
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27. FCC Options: Title II
Reinterpret Title II of the 1934
Communications Act
– Common carrier regulation
– Forbearance?
– Non-neutrality must be “just and reasonable” and
in the public interest
– Burden is on ISPs
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28. Congressional Policy
It is the policy of the United States . . .
to preserve the vibrant and competitive
free market that presently exists for the
Internet and other interactive computer
services, unfettered by Federal or State
regulation.
47 U.S.C. § 230(b)
mercatus.org

29. FCC Options: Section 706
Use Section 706 authority to promote
broadband deployment.
– Can’t use common carrier rules
– Must allow ISPs to bargain with other firms
– “commercially unreasonable” non-neutrality
prohibited
– Burden is on the FCC
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30. FCC Options: Defer
Defer to antitrust agencies
Defer to Congress
– Request new legislation
– CommActUpdate?
– DACA working groups
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31. Takeaways
• Net Neutrality and network management
is complex.
• Common carrier rules would limit
beneficial non-neutral practices.
• Don’t limit consultation to lawyers.
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32. Mercatus Materials on Net Neutrality
• Daniel A. Lyons, “Innovations in Mobile Broadband
Pricing,” March 2014
• Brent Skorup, Public Interest Comment to the FCC,
September 2014
• Brent Skorup, “In Defense of Broadband Fast Lanes,”
re/code, May 2014
• Brent Skorup, “FCC Net Neutrality Regulation Could Slow
Our Future,” New York Times, May 2014
mercatus.org

33. Bridging the gap between academic ideas and real-world problems