As you know from my last post, I was recently in Thailand. On my way back, I learned that after much strife, Thailand had decided to oust its prime minister. And when I arrived back in the U.S., I learned that the FCC seemed to have decided to oust the notion of an open Internet.
Prime ministers and presidents may come and go, but the Internet is far more important than any single politician.
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The U.S. used to enforce fair treatment for common services
In the past, U.S. policy on the Internet has created an open marketplace for digital commerce, media, and ideas. This successful policy has fostered an explosion of Internet growth and perhaps even your personal wealth. There have been numerous attempts to put tolls in place, but most have failed. Until now -- when Net neutrality faces a serious threat.
Net neutrality simply means that if you set up a website or online service, a Time Warner or a Comcast can't charge you extra to deliver that content to consumers or businesses connecting via their service, nor can they favor someone else's content over yours when it comes to things like delivery speed. This equitable approach has deep roots in U.S. history, going back to the early regulation of the railroads. Back then, legendary mogul John D. Rockefeller negotiated a deal with the railroads to set high rates on shipping barrels of oil but to get "rebates" whenever his own companies shipped it. The feds decided that such arrangements were illegal because the railroads were "common carriers."
Common carriers are not allowed to discriminate, but must offer the same price system to everyone. Otherwise, for example, Microsoft might try to negotiate a faster load time for Bing than for Google Search on Time Warner's, Comcast's, Charter's, AT&T's, or Verizon's network. Although this favoritism would enrich the shrinking number of Internet service providers in the U.S. (Comcast recently signed a deal to buy most of Time Warner Cable), it would also dramatically slow the pace of innovation on the Internet.
Why isn't your Internet service provider a common carrier? After all, analog phone providers are still common carriers. Because the FCC said so -- despite the fact that data is data and the move from analog to digital is a mere technical distinction (and even most "analog" lines are really digital somewhere or digitally switched). The big telecom and cable companies have lobbyists, and they have lobbied hard -- and successfully -- to get the FCC to not treat them as common carriers and for Congress to kill proposed laws that would enshrine Net neutrality. They have also hired every former FCC employee they could get their hands on.
What catalyzed the fight: Netflix's capitulation
Net neutrality was the de facto reality of the Internet, and the de facto policy of the FCC, for years. What changed? In one word, Netflix, which capitulated to the Internet service providers' threat to slow down its content delivery unless Netflix paid them extra money. In other words, Netflix decided to throw in the towel on Net neutrality.
Netflix matters because it and YouTube now suck up 53 percent of the Internet bandwidth. Time Warner and Comcast are merging into a goliath that still has a Novell problem: The future is obviously not scheduled cable broadcast of content, but content on demand. The only thing propping their old business model up is that most of you like watching sports, and getting those streamed can be painful and low-definition.