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What is Net Neutrality and Why Does It Matter?

Posted by Sophia Harrison on August 31, 2017

The internet is now an integral part of American life; it's changed almost every aspect of our daily interactions, including how we work, play and communicate. In large part, the proliferation of the internet has been fueled by its ability to grow and innovate quickly, free from regulation and interference. That, however, may be changing as telecom companies and politicians push to curtail net neutrality. For ecommerce retailers who aren't paying a premium for access to the "fast-lane," this could mean slower page load-times, which negatively impact user experience, conversion rates and ultimately revenue. Understanding what net neutrality is and why it matters for consumers and Internet businesses alike is central to the debate surrounding it.

Internet Regulation

Between 1996 to 2015, internet service providers (ISPs) invested more than $1.5 trillion into creating internet networks, and consumers responded in kind, making the internet increasingly interwoven into the fabric of society. It is during this time that politicians came to a bipartisan agreement to allow the internet to remain unregulated so that it could continue to grow and flourish unencumbered by legal restrictions. In 2015, the Open Internet Order, a more definitive call for net neutrality compared to 2010 legislation of the same name, was passed. This act reclassified ISPs as Title II utility services, an important distinction from the previous Title I information service designation.

With ISPs now essentially classified as public utilities, both fixed and mobile internet providers were prevented from blocking, throttling (impairing or degrading), or giving paid priority (i.e., creating "internet fast-lanes") to internet traffic based on content, applications, services or non-harmful devices. These are the same type of regulations that govern the power industry. This was the beginning of net neutrality.

The Debate

In May of 2017, the FCC voted to roll back the previous administration's Open Internet Order, enacted under President Obama, citing it as "heavy-handed" and damaging to innovation and competition. The primary objective of this being the declassification of ISPs as Title II regulated utilities. This would allow ISPs to decide whether or not to maintain the status quo and follow current open internet principles. Most telecom companies, including Verizon, AT&T and Comcast support the proposal. The Trump administration has also given its approval.

net-neutrality-lanes-768x432.pngInternet companies, those throughout the tech industry and consumer advocacy groups widely supported the 2015 Open Internet Order. In response to the FCC's 2017 vote, many websites and apps took part in a "Day of Action" during which they showed banners and other alerts informing users of the FCC's vote and asking them to reach out to Congress to voice their support for net neutrality. Amazon, Twitter and Netflix were among the most well-known companies to take part in the protest.

One of the most contentious issues between the two groups is the matter of paid prioritization. This anti-net neutrality policy would give ISPs the power to give some apps and websites, or even their own services, preferential treatment, including "fast-lane" access. Startups and those unable to pay more for this prioritized access would be limited to slower internet speeds and/or less data consumption.

The Numbers

According to a study conducted by the Internet Association, using publicly available data, telecommunications investment actually increased by 5.3 percent between 2012 to 2013 and 2015 to 2016, which includes the period when net neutrality was implemented. Likewise, consumers and ISPs both saw a 48 percent decrease in production and prices between 2000 and 2016.

While the future of net neutrality remains uncertain, one thing is certain: How this critical debate ends could have significant consequences for everyone from consumers to ecommerce businesses and even ISPs that want to innovate their industries.

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Topics: Politics, policy, telecom, net neutrality

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