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Understanding ‘Net Neutrality’

December 14, 2017 in Economics

By Peter Van Doren, Thomas A. Firey

Peter Van Doren and Thomas A. Firey

The FCC is set to vote on changing how the federal government regulates the internet, and commentators and activists are up in arms. New York Times technology writer Farhad Manjoo, for one, claims “the internet is dying.”

So what is the controversy about? FCC commissioner Ajit Pai proposes to repeal rules upholding “net neutrality” and replace them with a very simple rule: tell all customers about your services and prices in a transparent manner.

What is net neutrality? The internet is simply a set of pathways for transmitting packages of 1s and 0s—the basic language of computers—from one computer to another. When content (such as email, music, or video) is transmitted, the content is broken down into small packages of information, each of which, is sent separately over the internet to a destination computer, which then reassembles the information packages back into the content. Network neutrality requires that all the different packages of information be treated and priced alike by internet network providers regardless of who sent them or what information they contain.

While net neutrality sounds appealing, the actual internet experience that we have come to enjoy and expect actually requires non-neutrality. In the early days of the internet, packets of information were basically treated alike. This was back when the internet was a government-funded communications system that allowed university researchers to communicate with each other.

However, when the internet started to allow private internet service providers (ISPs) to connect to the government system in the 1990s, the structure of the internet became more complex. Private backbones supplemented the original government network, connecting through four backbone network access points. The four access points almost immediately became congested with traffic, which gave the backbone operators market power over regional ISP providers. To reduce congestion and limit backbone market power, ISPs quickly developed new pathways and connections.

Thus since the early days of the private internet there have been multiple paths for packets of information to travel. Similar packets have traveled over different pathways at different speeds and have long paid differing amounts to do so. These arrangements were not anti-consumer or anti-competitive. They were simply what was required to create redundancy and overcome market power.

In fact, they allowed content providers—websites, media streamers, and others—to reduce costs and increase quality of service because not all uses of the internet are alike in their technical demands on the network. For …read more

Source: OP-EDS

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