• Death to Net Neutrality.
    Long Live Net Neutrality!

Is this the beginning of the tiered internet?

18 December, 2017

United States' FCC chairman Ajit Pai has led a vote to repeal the Open Internet Order, effectively killing net neutrality rules. While not officially complete, US advocacy groups are already well underway for battle to defend the neutral internet once it's put down.

Globally, net neutrality protections have been relatively straightforward. And while there have been political and ideological conflicts, Much of the discussion has revealed how young the internet still is in the daily reality of humans globally.

To start this review, let's start at where this is likely to end, should Net Neutrality fully dissolve for America and push other jurisdictions to deal with it. This is the real world effect of no Net Neutrality in Portugal.

No Net Neutrality


It looks an awful like your cable TV package choices doesn't it? To be fair, this does not represent the full offerings by this company, they do offer varying levels of all-you-can-eat models, but all the same it is still based on tiered, preferred and sponsored content and service. And this is central to this challenge. What happens if the FCC gives licence to ISPs to hive off traffic as sub-access-as-a-service that they control?

We all know how much we love dealing with these packages – imagine if we had to make decisions about the millions of content choices, application choices, and service options around the world currently available to us and how we would want to prioritize choices that are currently on par with one another. Internet Service Providers (ISP) could easily be offering Americans promotions like this:

Net Neutrality repealed

The two key areas affected by the repeal of Net Neutrality are where the power will eventually shift, and that is to the end-user Internet Service Providers, the ISPs of the very users of the internet – the "last mile" as it were. In turn, this then erodes, to a degree, data sovereignty of countries. For example, if an established ecommerce business selling bedding has a large American client base and one American ISP strikes a sponsorship deal with a competing bedding retailer within the USA, that ISP could slow down competitive traffic from anyone else including the established business whether they're from America, Canada, the UK or Japan, and anyone else for that matter. It doesn't matter that the company is or isn't American, or has or hasn't broken any rules, that sponsorship deal will penalize competition plain and simple.

Proponents of removing net neutrality advocate that this will promote competition and innovation, but evidence has shown time and again that it will push this to a kind of top-ended corporate de facto "ownership" where competition consists mostly of enterprise buying out prioritization and even outright banning of the competition. 

Original Net Neutrality Decisions

These are not new arguments. Early Net Neutrality battles waged in Canada came from Bell's argument that it should have the right to "shape" their traffic when sold to wholesale carriers but when sold to their own carriers would not be subject to "shaping" (a tamer, less intimidating and emotional term meaning throttling). Firmly in the middle of the argument is what role the ISP takes under certain circumstances. Similarly, Videotron argued that it should be allowed to offer preferential treatment of its own movie service traffic by allowing it to pass for free without adding to your traffic quota as a competitive advantage. When is the ISP a service of internet traffic, and when is it a content provider? This is central to the discussion in any country, and in the Canadian case, the CRTC came down on arguing evidence that Bell nor Videotron could not use its role as service provider, or utility, to help its service as content aggregator.

In the uniquely Canadian situation of extreme concentration of telecom services, the CRTC, and consumer advocates are keenly aware of the power that could easily be corrupted by giving telecos the latitude to throttle, shape and otherwise do what they wanted. Additionally, the CRTC, like its EU partners have come down firmly on the consumer's side as mostly neutral, apolitical evidence-based regulators; this is in contrast to the US' FCC which generally operates as an arm of the governing will.

Take Two, the Scarcity Play

As decisions have already been made establishing the first round of research, debate, evaluations, hearings and citizen consultations, President Obama era regulation had already established its line, Canadian CRTC policy gone through its due diligence, controversy and established its line, and similarly the EU with its 2015 regulation reaching similar conclusions. Interestingly with Brexit looming, the UK, having fallen under the EU regulatory framework is now facing the potential for its own Net Neutrality debate in the coming years, though the expectation is that it will be converted over to UK law.

Innovation Matters, Globally

One of the most brilliant parts of the open internet is that great ideas can take root anywhere. This requires a base level of internet access of course, but beyond that, not much else. This has created an inordinate amount of opportunity not only in previously less accessible places economically, but also for western economies to seek out and embrace working relationships, staffing and innovation from outside their usual geographies. It's made the world smaller, in a good way.

The next batch of great innovation, however, if remotely conflicting with established players could well find themselves pushed out of market entry simply due to price of access. That price of access is currently zero, notwithstanding ingenuity, server infrastructure and code – what everyone needs anyway. But that price could well go up if a rich, established incumbant player decides they don't want competition. They swing a deal with an ISP to "buy out" that space to either limit, throttle, or altogether block competitors from entering. Users of that ISP may well have nothing they can do about it besides complain.

But that next great fledgling Facebook, Google, Skype, Slack, or Hootsuite finds itself needing to pay hefty "access fees" to get reasonable speeds for its new application, service or great idea to market in America? It's an impediment to say the least. Many just won't be able to do it, may well try to innovate through it, but speed is speed; access is access. Many just won't be able to get past it and could fail as a result of this false scarcity play. Scarcity 1, innovation 0.

Vote with Your Wallet

In theory, proponents will tell you to vote with your wallet and leave your ISP if they're not offering a package/model that fits your preference. The reality is that tens of millions of people don't have a viable alternative, or any alternative at all for their region. Often there are so few alternatives that there is no meaningful difference anyway – this is already borne out in the DSL and mobile space, try to leave your DSL or mobile provider in a rural area and more often than not if you even have a competitive choice, their plan is, mysteriously, nearly identical to what you're currently on. Checkmate. Guess what? You have limited choice.

Before you say this is farfetched remember that this has already happened before. Verizon, Bell, and Videotron have all been caught in various forms of prioritization or throttling. They have all been called out for this and their behaviour more or less kept in check. This is all under the watchful eye of Net Neutrality as it stands now.

The above "cable package" graphic is, granted, somewhat of a dramatic play on a dreaded dystopian future without Net Neutrality. But it is still rooted in the above current and historical reality. That ISPs, given enough latitude, have demonstrated all sorts of willingness to try to flout policy gaps to skirt the spirit of Net Neutrality and create tiers of value (read, scarcity) where there really isn't any. Remember, data is data; and either you have a certain speed and size on your data plan or you don't. That's the technical reality. ISPs are creating scarcity wherever possible so you'll feel the pinch, be motivated to prioritize, and therefore pay. You might pay in money, limiting your other bandwidth usage, or both; but one way or the other the scarcity play is going to get you to pay.

Crystal Ball

And so it's crystal ball time. No, nobody knows for sure how this will play out. For America, for the world, for policy and for economics and innovation. We just know what has happened before and the seeds of what we have seen happen before, and in the present. The signs are there – if there were none it would be easy to cry Chicken Little. But they are there.

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