Protecting a level playing field for the internet is important, but net-neutrality will remain under attack until there's competition among ISPs.
When the net-neutrality debate hit its peak in the fall of 2014, Ted Cruz wrote a bad tweet:
The Republican senator was torched for this, for many justified reasons. The net-neutrality laws that would be passed in 2015 — which prevent ISPs from blocking, throttling, or prioritizing certain traffic for financial gain — have not let the Fed determine how much you pay for internet service, and banning internet providers like Comcast and Verizon from slowing down websites for profit has never been the same as mandating citizens to buy private health insurance. Cruz’s rationale was wrong.
But with the GOP in control of Washington, and with current Federal Communications Commission (FCC) chairman Ajit Pai intent on erasing those net-neutrality laws from the books, Cruz hasn’t softened his stance whatsoever. In a FCC oversight hearing last month, he used the phrase yet again as part of a wider call to repeal the net-neutrality laws.
And you know what? The notion of the net-neutrality laws being like Obamacare isn’t that crazy. It wasn’t crazy the first time, either. But Cruz won’t agree with the reason why.
It is very easy to agree with net-neutrality advocates. Conceptually, saying you support net neutrality is like saying you support not murdering people. A Comcast or Verizon squeezing a YouTube — or, more significantly, the next YouTube — for cash, or giving certain traffic preferential treatment, is a potentially disastrous consolidation of power.
The dangers advocates warn of aren't totally hypothetical: Comcast did try to slow down Netflix, and AT&T does use its status as an ISP to give it services an advantage. It’s important to prevent the current powers from abusing their positions, just as it is in any industry.
The big questions we need to look at, however, are why ISPs are so eager to do that (beyond saying “they’re bad lol”), and how we get to a point where we aren’t having a political war over this issue every four years.
Pai says he objects to the current net-neutrality laws because they classify ISPs as Title II public utilities. The major ISPs have persistently said the enhanced oversight that comes with that will slow their incentive to invest in upgrading their networks. We took our own look at if that’s been true thus far, though, and couldn’t find a definite trend.
Regardless, the larger point is that ISPs need to be incentivized to expand and improve their networks in the first place, because we are only going to increase our dependence on, and usage of, the internet as time goes on.
The current net-neutrality laws dance around that. That they prevent ISPs from discriminating against certain traffic is great, but they effectively accept that the current ISPs are pseudo-monopolies, then ask them to not to make things any worse. They ensure competition on the internet, but they merely hope to expand more diverse access to the internet itself.
Read any speech Pai has given in the last year and you’ll see he always talks about expanding access to broadband. “Closing the digital divide” comes up like clockwork. Most of his plan to do that, though, doesn’t involve increasing the number of ISPs competing in a given area.
Pai isn’t being subtle about this: Earlier this month, for instance, he reversed a mandate that would’ve forced Charter to build out its broadband network to one million customers that were already being served by another ISP. (This would’ve been half of a two-million customer rollout required as part of Charter’s merger with Time Warner Cable.)
Instead, Pai wants Charter to focus on building out its network to areas without internet at all.
On its face, asking Charter to build its network to areas without internet above all else is understandable. But when those customers get their internet, there’s a good chance they’ll be subject to whatever level of service Charter wants to provide, because there won't be any other competition. There's a trade-off.
Nearly everything Pai has done as FCC chief involves freeing up ISPs to make more money. This makes it very easy for detractors to consider him “corrupt,” but the underlying logic is that getting out of the way of the big ISPs will give them incentive to expand their networks into new areas. It always comes back to creating that incentive.
Pai's reported net-neutrality plan — which is said to strip the Title II tag from ISPs, and make the net-neutrality principles harder to enforce — would seem to follow suit.
Could Pai's net-neutrality plan lead ISPs to invest in more robust internet, and even offer it at cheaper prices? Possibly. But most of these companies have been sitting on piles of money for a long time, and they haven’t been very eager to spend the hundreds of millions needed to build out their private infrastructure into more places.
And that’s just the existing ISPs. As Google showed with its attempt to make Fiber a nationwide internet service, even the richest outside companies have major trouble creating new challengers. More worryingly, it's not hard to see how the plan could come at the expense of an internet that, for the most part, doesn’t discriminate against certain apps and websites.
None of this is to say that Pai's plan is correct or wrong, though. It just means that it's something.
But with the current net-neutrality laws, the major ISPs will still want to boost their bottom lines. If they aren’t going to build out their networks to new places, and they’re legally (and, many would say, justifiably) barred from playing favorites for profit, then that extra revenue is likely to come from higher prices.
Most likely, it’ll come from something akin to data caps — the kind Comcast has steadily tried to normalize in recent years. Any higher cost may be worth it if it means keeping the internet on a (mostly) level playing field. But, again, it's a trade-off.
The assumption in all this, though, is that the big ISPs must have total control over their internet infrastructure at all.
This is where Cruz’s tweet weirdly starts to resonate: The net-neutrality laws say the internet is a public utility, but still leave its quality and availability up to a few private companies.
Obamacare, meanwhile, says everyone needs health care, but still leaves gaps and concessions for private companies that wouldn’t exist in a single-payer system. They're both compromises that stop short of addressing more structural problems.
To be clear: I’m not saying the internet should be nationalized. What I am saying, though, is that if you’re on the side that says the internet is a public utility, just saying you want net-neutrality is only a partial fix. You need to go further, and have a concrete way to ensure internet infrastructure isn’t left to stagnate over time.
One way to do this is a process known as “local loop unbundling.” This involves regulating ISPs to lease or open up the “last mile” of their infrastructure to other ISPs, who’d then sell internet service plans over the wires that are already in place. The immense barriers to entry for any would-be ISP would disappear.
This would be a radical change, one that’d effectively tell Comcast and Charter and Verizon that the infrastructure they helped pay for no longer belongs to them alone. But it could result in a floodgate of competition, potentially bringing far more choice between price and speeds in all parts of the country.
Theoretically, it’d also make any need for net-neutrality (or internet-privacy) laws irrelevant — if your ISP wants to throttle YouTube and sell your browsing history without telling you first, you can just take your business to one that doesn’t.
The market would likely erase such behavior out of existence, or at least force ISPs to deploy it in a way that isn’t terrible.
The process would make the net-neutrality debate look like peanuts, and it’d probably mean a new tax when it comes time to upgrading the networks. But if you really think the internet is a public utility, it’s a more wholesale solution.
Crucially, unbundling the local loop is also a proven solution — various European countries, including the UK, and some Asian nations already take a similar approach today. A number of them get faster and/or cheaper broadband as a result. (The US is a much larger land, of course, but the difference is still stark.)
If it wasn’t already obvious, this is all a pipe dream under the current regime. Pai’s plans are just about the exact opposite. But this change in thinking wasn’t close to occurring under the Obama administration, either. America gets cold feet whenever it thinks of even mildly socializing a part of life it considers a universal good.
Plus, since they’d have billions of dollars in cozy duopoly rents on the line, the big ISPs would fight any change with all they’ve got.
We know that because the US has technically introduced this sort of leasing and unbundling technique before, and it was either never truly enforced, or it led to private companies not being incentivized to invest in upgrading the underlying infrastructure. (This is part of why DSL is so mediocre in the US, but not in other countries.)
That “last mile” infrastructure would probably have to be nationalized to an extent, but again, this is what you do with a public utility. Yet very few in Washington seem to want to entertain the idea.
In lieu of any federal push, various local governments have helped set up municipal broadband networks. At their best, these have led to better service — EPB brought fiber internet and gigabit speeds to Chattanooga, Tennessee, for instance, and subsequently led to incumbents like Comcast and AT&T upgrading their service in the area. Comcast even launched a 2Gbps plan to one-up EPB (albeit much later).
Those same ISPs have fought to keep such local services from expanding into new areas. For the most part, they’re winning — Tennessee lawmakers, to use the same example, recently passed a bill that to give $45 million to private telecoms instead of one that’d preempt a state law that prohibits municipal broadband networks from branching out.
Still, it’s clear that Americans want some sort of competition among ISPs. According a recent Pew study, a majority of Americans from both parties agreed that local governments should be allowed to build their own broadband networks.
An unbundling of the last mile infrastructure, though, would make this less necessary.
I am far from the first person to bring this idea up: Stratechery’s Ben Thompson and Ars Technica’s Peter Bright, to name a couple, wrote excellent breakdowns on the realities of the US’s internet challenge around the time of the last net-neutrality debate.
The problem is that it’s three years later, and virtually nothing has changed. And we’re going to keep having this debate until there’s a fundamental shift in how we approach our internet. If Pai’s plan doesn’t work out — and there’s no guarantee it will — those who oppose him should use that opportunity to dig deeper.