The DC Circuit Court, which is just one step down from the United States Supreme Court, is hearing arguments in a case some believe may lead to striking down the nation’s Net Neutrality Law, which was officially adopted by the Federal Communications Commission (FCC) in 2010 and has been in place since the earliest days of internet development. While the courts may yet decide to uphold the law in this particular case, many experts contend that it is only a matter of time before Net Neutrality is eventually litigated out of existence.
As conceived, Net Neutrality means that ISPs are required to provide the same level of throughput between content providers and consumers, but the owners of these “data pipes” often have their own content that they would prefer to send, or are simply looking for an additional revenue stream which would be available if they could charge site owners for feeding their bits to consumers faster, or as a way to hamper competition by throttling unaligned content providers’ throughput so as to make their in-house or allied content load faster and become more attractive to consumers instead.
As a small, but growing segment of the population “cuts the cord” and moves to receiving their entertainment through internet-based services like Hulu, Netflix and Net based providers, cable and telecom companies which have their own cable television-style entertainment packages on offer, would like nothing better than to be able to charge Netflix or other providers for premium speed and connectivity packages. Though their point of view seems to ignore the fact that consumers are already paying quite handsomely for broadband service as it is.
As previously reported here by NationalNet, Netflix accounts for more than 31% of all web traffic and YouTube accounts for nearly 19% of all web traffic. That means just from those two entities alone, half of all web traffic can expect to see worse service or higher prices if the Verizon case is decided in favor of the carriers.
The case presently before the court has been brought by Verizon, objecting to requirements that they practice nondiscrimination among websites and application sources. Based on the statements of the justices during the case’s oral arguments it would appear that the ruling will be made in favor of the phone and cable companies, while they will likely uphold the “no blocking” provision which prohibits ISPs from completely blocking access to non-preferred sites according to experts watching the case closely. That outcome would beg the question, is there really a difference between Verizon ‘blocking’ Netflix and Verizon simply making Netflix load 90% slower than a competing movie service owned by Verizon or one of it’s allies?
If the nondiscrimination rule is struck down, the implications for consumers and website owners will be profound. No longer will sites live or die on the merits of their content, as gatekeepers like AT&T, Verizon, Comcast and other major players will be able to demand content providers pay up, or have their throughput slowed and their traffic turned away in droves – presumably, straight into the arms of in-house competition or other providers that have anteed up for a better data connection. Netflix, Hulu and iTunes in particular will have their business models turned upside down, as will any other high traffic low cost content provider. Cost will undoubtedly be passed on to consumers and for those who run commercial sites, a new pay to play model becomes particularly problematic, as users have shown very limited patience for slow page loading times, with 25% abandoning a page if it takes more than 4 seconds to load.
If left unfettered by the Net Neutrality rule, ISPs would be able to throttle any site for any reason, whether to strong-arm a fee, drive users to an in-house alternative or as part of some larger scheme. When questioned about his client shaking down site owners to provide reliable service, Verizon’s own lawyer in the case stated: “I’m authorized to state from my client today that but for these [FCC] rules we would be exploring those types of arrangements.”
If the court throws out the nondiscrimination rule, costs for site owners and consumers may rise significantly while innovation gets stifled. Even if upheld, Net Neutrality is still on shaky ground as there will always be a great deal of money at stake for those fighting to get it overturned, and this a war they clearly do not intend to lose.