What is net neutrality and why does it matter?


NEW YORK (AP/NBC/KXAN) – “Net neutrality” regulations, designed to prevent internet service providers like Verizon, AT&T, Comcast and Charter from favoring some sites and apps over others, are on the chopping block. On Thursday, the Federal Communications Commission plans to vote on a proposal that would not only undo the Obama-era rules that have been in place since 2015, but will forbid states to put anything similar in place.

Here’s an overview of what the developments mean for consumers and companies.

What is net neutrality?

Net neutrality is the principle that internet providers treat all web traffic equally, and it’s pretty much how the internet has worked since its creation. But, regulators, consumer advocates and internet companies were concerned about what broadband companies could do with their power as the pathway to the internet – blocking or slowing down apps that rival their own services, for example.

What did the U.S. government do about it?

The FCC in 2015 approved rules, on a party-line vote, that made sure cable and phone companies don’t manipulate traffic. With them in place, a provider such as Comcast can’t charge Netflix for a faster path to its customers, or block it or slow it down.

The net neutrality rules gave the FCC power to go after companies for business practices that weren’t explicitly banned as well. For example, the Obama FCC said that “zero rating” practices by AT&T violated net neutrality. The telecom giant exempted its own video app from cellphone data caps, which would save some consumers money, and said video rivals could pay for the same treatment. Current chairman Ajit Pai’s FCC spiked the effort to go after AT&T, even before it began rolling out a plan to undo the net neutrality rules entirely.

A federal appeals court upheld the rules in 2016 after broadband providers sued.

What do companies want?

Big telecom companies hate the stricter regulation that comes with the net neutrality rules and have fought them fiercely in court. They say the regulations can undermine investment in broadband and introduced uncertainty about what were acceptable business practices. There were concerns about potential price regulation, even though the FCC had said it won’t set prices for consumer internet service.

What do tech companies want?

Internet companies such as Google have strongly backed net neutrality, but many tech firms have been more muted in their activism this year. Netflix, which had been vocal in support of the rules in 2015, said in January that weaker net neutrality wouldn’t hurt it because it’s now too popular with users for broadband providers to interfere.

What does it mean for businesses?

If telecommunications companies decide to have businesses pay extra in order for their websites to be seen, or if they increase prices for consumers altogether, small businesses and startups could be at a disadvantage. CEO of the Austin Tech Council Barbary Brunner says businesses could pass on extra costs to consumers.

“I completely disagree that it will help tech startups, because tech startups actually need to use a lot of bandwidth when they are testing what they are doing online,” Brunner said. “Sure, if you’re not using a lot of bandwidth, you don’t pay for a lot of bandwidth — but the fact of the matter is some tech startups need to use a lot, some tech startups need to use a little.”

Pai says removing the regulation shouldn’t affect small businesses.

“I think in this case, their concerns are misplaced, for a couple of different reasons,” Pai said in an interview with NBC News. “Number one — again, before 2015, we had a free and open internet in which very small companies became global giants: Facebook, Amazon, Netflix, Google.”

What happens next?

Although the FCC’s two Democrats said they will oppose the proposal, the repeal is likely to prevail as Republicans dominate 3-2. The vote for net neutrality in 2015 was also along party lines, but Democrats dominated then.

In the long run, net-neutrality advocates say undoing these rules makes it harder for the government to crack down on internet providers who act against consumer interests and will harm innovation. Those who criticize the rules say undoing them is good for investment in broadband networks.

But, advocates aren’t sitting still. Some groups plan lawsuits to challenge the FCC’s move, and Democrats – energized by public protests in support of net neutrality – think it might be a winning political issue for them in 2018 congressional elections.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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