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Saturday, June 23, 2018

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Net neutrality: Our last beacon of hope, gouged


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Ajit Pai, the current Chairman of the Federal Communications Commission, has been trying to kill net neutrality for the better part of 2017, and now he is closer to realizing his goal than ever. Pai’s initiative to “Restore Internet Freedom” is about as ironic as his previous position in the Antitrust Division of the Department of Justice.

In addition to rescinding legislation that has fostered an environment ripe with antitrust concerns, the idea of restoring internet freedom by removing the safeguards put in place to ensure information isn’t discriminated against by content or user is similar to claiming that rescinding the First Amendment restores free speech.

The FCC is set to vote on the matter on Dec. 14, and in all likelihood the measure will pass with a 3-2 vote.

Net Neutrality, or Open Internet, is generally concerned with preventing three practices: blocking, throttling, and paid prioritization.

Blocking is the prohibition of access to otherwise lawful content, while throttling is the forestalling of certain internet traffic over others. Paid prioritization refers to showing favoritism toward certain internet traffic or services in exchange for something.

While Pai expressed dismay for the “heavy-handed” regulation, he claims, “We should simply set rules of the road that let companies of all kinds in every sector compete and let consumers decide who wins and loses.”

Apparently, if you place the word “simply” before “set rules,” it dampens the notion that the FCC is open to exchanging one kind of legislation for another. The pro-consumer defense Pai offered amounts to pandering at its finest.

“The Federal Trade Commission would police ISPs, protect consumers and promote competition, just as it did before 2015,” the telecom lawyer and bureaucrat wrote in the Wall Street Journal. “Instead of being flyspecked by lawyers and bureaucrats, the internet would once again thrive under engineers and entrepreneurs.”

Routinely, consumers are rendered powerless in decisions regarding what companies win or lose in the telecommunications industry, which has consolidated more and more yet continues to charge higher fees with costlier pricing structures to recoup profits.

An oft-cited reason for rolling back the 2015 measures is that they stifle potential innovative business models for internet service providers. The idea that net neutrality has hampered investment in innovative research and services is “simply” false.

The current ISP oligarchy is akin to a great white shark in that it must keep moving forward to survive, and anything smaller in size should fear it.

Business models frequently favor innovation because, in reality, it leads to higher barriers to entry for smaller companies that need the internet.

The ISP oligarchy favors innovative business models while stifling innovative users and information.

Loosening net neutrality restrictions would hurt a number of ISPs that would pale in comparison to the number of businesses that could be hurt by the potential pay-to-play ethos that will inevitably follow. Transparency requirements aside, it is ludicrous that we are supposed to take industry players with a history of gouging consumers and controlling the flow of information at their word when they assure us that they won’t do anything.

Comcast removed its pledge against paid prioritization the same day the FCC announced its intent to repeal, which isn’t surprising. Comcast gouged Netflix the year before the net neutrality rules took effect, which happened a little more than a month after a federal appeals court struck down the FCC’s proposed net neutrality rules at the time.

This ISP subsector, as well as the telecommunications industry as a whole, has long been comfortable with being an industry that boasts the overwhelmingly lowest customer satisfaction scores, even with the favorable environment that has developed this year. There was little to no difference in customer satisfaction with ISPs before and after net neutrality took effect.

In an earlier column, I called Ajit Pai a “fox guarding the henhouse.” That statement still rings true today.

Opinion columnist Nicholas Bell is an MBA candidate. He can be reached at [email protected]

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