I don’t understand Net Neutrality. Everything I DuckDuckGo is horribly biased. WTH is it?

Responding to this point, Pai pointed out that ISPs are already allowed to split their services up into packages, and have not done so.

For one thing, the Obama Administration itself made clear that curated Internet packages are lawful in the United States under the Commission’s 2015 rules. That’s right: the conduct described in a graphic that is currently being spread around the Internet is currently allowed under the previous Administration’s Title II rules. So, for example, if broadband providers want to offer a $10 a month package where you could only access a few websites like Twitter and Facebook, they can do that today. Indeed, the D.C. Circuit Court of Appeals recently pointed out that net neutrality rules don’t prohibit these curated offerings.

So the complaint by Mr. Takei and others doesn’t hold water. They’re arguing that if the plan is adopted, Internet service providers would suddenly start doing something that net-neutrality rules already allow them to do. But the reason that Internet service providers aren’t offering such packages now, and likely won’t offer such packages in the future, is that American consumers by and large don’t want them.

Additionally, as several fact-checkers have pointed out, as part of the European Union, Portugal does have net neutrality regulations! Moreover, the graphic relates to supplemental data plans featuring specific apps that customers could get from one provider, beyond the various unrestricted base plans that provider offered. As one report put it, this example “is pointing to an example that has nothing to do with net neutrality.”

Pai also addressed one of the more fundamental misconceptions about Net Neutrality reform: that it would lead to an internet completely free of regulation and oversight.

Perhaps the most common criticism is that ending Title II utility-style regulation will mean the end of the Internet as we know it. Or, as Kumail Nanjiani, a star of HBO’s Silicon Valley put it, “We will never go back to a free Internet.”

But here’s the simple truth: We had a free and open Internet for two decades before 2015, and we’ll have a free and open Internet going forward.

Many critics don’t seem to understand that we are moving from heavy-handed regulation to lighttouch regulation, not a completely hands-off approach. We aren’t giving anybody a free pass. We are simply shifting from one-size-fits-all pre-emptive regulation to targeted enforcement based on actual market failure or anticompetitive conduct.

For example, the plan would restore the authority of the Federal Trade Commission, America’s premier consumer protection agency, to police the practices of Internet service providers. And if companies engage in unfair, deceptive, or anticompetitive practices, the Federal Trade Commission would be able to take action. This framework for protecting a free and open Internet worked well in the past, and it will work well again. Chairman Ohlhausen will soon offer further details.

The plan would also empower the Federal Trade Commission to once again police broadband providers’ privacy and data security practices. In 2015, we stripped the Federal Trade Commission of that authority. But the plan would put the nation’s most experienced privacy cop back on the beat. That should be a welcome development for every American who cares about his or her privacy.

Finally, Pai highlighted what has been one of his major selling points on Net Neutrality reform: that it will lead to increased investment in rural broadband.

Another concern I’ve heard is that the plan will harm rural and low-income Americans. Cher, for example, has tweeted that the Internet “Will Include LESS AMERICANS NOT MORE” if my proposal is adopted. But the opposite is true. The digital divide is all too real. Too many rural and low-income Americans are still unable to get high-speed Internet access. But heavy-handed Title II regulations just make the problem worse! They reduce investment in broadband networks, especially in rural and low income areas. By turning back time, so to speak, and returning Internet regulation to the pre-2015 era, we will expand broadband networks and bring high-speed Internet access to more Americans, not fewer.

I'm largely opposed to the FCC's open internet order, so I'll weigh in.

First, it's essential to distinguish between the concept of net neutrality and the FCC's 2015 Open Internet Order. Net neutrality, in the sense of ISPs acting as "dumb pipes" that treat all traffic the same, is basically how the Internet has functioned in the U.S. since the rise of broadband. In fact, one of the reasons we have net neutrality is that it's what consumers wanted. In the early days, services like AOL and Prodigy didn't just provide you with web access so you could go wherever you wanted. They were providing a curated internet experience, both because people didn't know how to use the Internet and because the ISPs thought that people would prefer an Internet that acted more like TV. The demise of those services has a lot to do with the fact that consumers preferred an open internet.

Now, in the last decade or so, there have only been a few documented instances of ISPs violating the principle of net neutrality. There are probably more instances that aren't widely known, but it's certainly very rare, and when it has happened, there has typically been a swift legal response and public outcry. So the second thing to understand is that the rules are about preserving the status quo. Anyone who offers a parade of horribles regarding the repeal of net neutrality rules is full of it. Nobody really knows what's going to happen. On the other hand there is some merit to the idea that ISPs have been afraid of violating net neutrality as long as the FCC has been considering the issue, but that if the Commission repeals the rules, it will be like finally giving the ISPs clear permission to violate net neutrality.

The flip-side of regulating to maintain the status quo is that we also don't know what good things we might be missing out on if ISPs and edge providers were allowed to experiment. There's a growing body of economic literature recognizing that there can be efficiencies to two sided markets (e.g., a broadband market in which the ISP can charge both the end consumer and the content provider for the service of using their cables). For instance, Spotify and T-Mobile came up with a deal a few years back to provide unlimited data for streaming music. Consumers loved it, but net neutrality warriors flipped out. Their reasoning was basically that a hypothetical upstart music service wouldn't be able to afford to subsidize its users' data, or at least such an upstart wouldn't have the scale to negotiate with a big company like T-Mobile. But those kinds of barriers to entry exist in EVERY market. It's the reason we have big companies--they have the scale to efficiently provide products and services that people want.

In the short term, the likely "violations" of net neutrality are all likely to be in terms of streaming video and music services. That's what the ISPs are concerned about. The real problem is that some portion of broadband users are consuming almost all of the broadband in the country so that they can watch Stranger Things. A lot of people are subsidizing the internet usage of a lot of other people. You might say, then why not just charge people for the amount of data that they use? Well, it's because research has pretty clearly demonstrated that consumers don't like being rationed. They hate having to watch their consumption of data or not knowing what their bill is going to be. They would much rather have a known, up-front expense that can set on a recurring basis and then forget about. Two sided pricing gives the ISPs a way to do that. If they charge Netflix and the other big users, then that price gets passed on to the consumer via higher Netflix fees. The result should be lower baseline broadband fees for everyone, with the people who use a lot more bandwidth paying for it via their content providers. (In reality, it's more likely that broadband prices won't drop so much as they'll stay level for longer than they otherwise would.)

There are a few other possibilities that the net neutrality people have raised, but I think they're pretty unlikely. First, the idea that we're going to have some sort of 1984 political censorship is pretty fancifal, in my opinion. Most broadband infrastructure is owned by publicly-traded companies that are interested in maximizing shareholder value and revenue, not grinding a political axe. The other is that the ISPs will offer their own content and steer consumers towards it, away from competing content. That's more plausible, but it's very likely already illegal under the FTC Act and possibly the Sherman Act.

Finally, I want to address the argument someone made that Republicans opposed to net neutrality have only one argument: regulation is bad. I'm no fan of congressional Republicans, but that argument is better than it sounds, especially if we keep in mind that this is a regulation to maintain a status quo that existed even without regulation. The free market is infinitely creative--far more than regulators. The innovations that the free market comes up with can be categorized into three buckets:

(1) New ideas that are bad for consumers, but which the market can sort out. E.g., New Coke. People don't like it, but we don't need regulation to outlaw New Coke. This is by far the biggest bucket. Capitalists are coming up with terrible ideas constantly, and most of them are utter failures.

(2) New ideas that are good for consumers. Someone invents a better mousetrap. He gets rich, we get to kill more mice, and everyone is happy. This is a smaller bucket, but it's where the magic happens. It's why we live in such a tremendously prosperous society.

(3) New ideas that are bad for consumers, but which the market cannot fix. E.g., air pollution. Every capitalist has an incentive to burn cheap, dirty fuel, and not to invest in equipment to reduce emissions. The costs are born by the public at large, so there's a market failure, and regulation is necessary to address the failure. This bucket is by far the smallest of the three.

My view (and the view of most economists), is that we shouldn't regulate unless we're in bucket three, and we should be fairly certain that's where we are before we act. There are three main reasons. First is that bucket three is the smallest, and even though regulators have a tendency to see everything as a problem that requires regulation, the reality is that far fewer things are true market failures. The second reason is that a false positive is durable. Once we pass a regulation, it's there until it gets repealed, even if market conditions change (which they always do). The third reason isn't always true, but it usually is: We can typically adopt a wait and see approach. If a market failure materializes, we can regulate, but if we regulate first, we'll never really know if our intervention was necessary. (There are admittedly areas in which the risk of allowing a failure might be so great that we step in regardless.)

So for me, the bottom line is that I'm slightly inclined to think that net neutrality rules will do more harm than good, but I'm far more confident that this is an area where we should be reactive rather than proactive.

“Do you really want to be the man who is responsible for making America another North Korea?”

“These comments are utterly absurd,” Pai said. “Getting rid of government authority over the internet is the opposite of authoritarianism. Government control is the defining feature of authoritarianism, including the one in North Korea.”

“I’m threatening democracy? Really?” Pai said to laughter from the audience. “I’d like to see the evidence that America’s democratic institutions were threatened by the rule that existed during the Clinton administration, during the Bush administration, through the first six years of the Obama administration. Don’t hold your breath, because there is none.”

https://twitter.com/BrendanBordelon/status/934418166620524544

These are good arguments, but I think you greatly underestimate the size of third bucket.

The "free market" does not work very well when a company is in a monopoly position or when the consumer does not really has a choice whether to get a service or not (think health care: you don't ask he ambulance driver to go shopping for hospitals once you have been run over by a car). In many instances, ISPs are in a condition pretty close to a monopoly (there are only a few, and many customers have only access to one or two ISPs. If they don't like their offers, it is either suck it up or go without internet), so this is a case where government should be vigilant.

Coming to net neutrality, I think it is a case where relaxing the rule will cause MORE regulation rather than less. It is relatively easy to comply with net neutrality, ISPs have to do basically nothing at all to regulate traffic and they will be compliant.

If you allow the ISPs to REGULATE the traffic, this creates new opportunities for the ISPs to make extra money by creating ADDITIONAL REGULATION at the expense of customers and businesses. This is why they love the idea.

An obvious opportunity is to charge businesses for different speed of access to the ISP customer base. The other opportunity is to create plans with a much more obscure pricing scheme, that may look like a deal, but ultimately cost more.

If anybody thinks that removing Net Neutrality will allow ISPs to save money, and that the savings are going to the users; well, I have a nice a bridge between Manhattan and Brooklyn that is for sale.

The idea that you don't like DuckDuckGo and that therefore you don't think net neutrality is valuable indicates that you do not understand DuckDuckGo and that you don't understand net neutrality.

(Hint: the reasons DuckDuckGo are not giving you the results you want has nothing at all to do with Net Neutrality).

theJeff wrote:

I am still listening out for a good counter-argument. It sounds like the only good one is that Netflix et al costs the ISPs more, so it may be fair to pass that cost along to the consumer.

Still, from the Selfish Consumer standpoint, opposing the end of NN seems pretty common-sense.

This is one I didn't mention. I will explain why I believe it is a misleading argument.

When a consumer pays for a 10Mbps, that 10Mbps is not more difficult for an ISP to deliver from Netflix than from any other source or website. Currently they happen to use a lot of their 10Mbps on Netflix, and ISPs twist this fact by saying this implies Netflix is a burden on the network. It is more accurate to say that the "burden on the network" is increased consumer demand for higher speeds, which the ISPs can address by providing higher speeds. The fact that consumers happen to be using these high speeds on Netflix is not relevant to ISP costs, but they would like to make profits by double dipping if they can (charge both for high speeds and specifically for Netflix). If Netflix goes out of business the ISPs will keep making the same argument but substitute the name of whatever service is popular at the time.

It would be exactly like if FedEx said, "hang on, XX% of our packages are delivered from Amazon, so we want to charge Amazon a much higher price than anyone else to deliver the same size package the same distance. After all, Amazon is placing an undue burden on our delivery network."

I also want to respond briefly to 800 dude who made some thought-out points. First is that ISPs are not the ones providing innovation. They are the pipe between the two sides of the market and they want to interfere with market competition flowing through them. They should be "innovating" by expanding access to more people and raising internet speeds, in their role as the pipe. Instead their proposals for "innovation" all seem to involve colluding with certain endpoints of the pipe (often owned by the same company) to manipulate the two-sided market. In other words, notice how none of their proposals for "innovation" by removing NN have to do with improving infrastructure or speeds, only with changing pricing schemes around so they can extract some of the money currently going to Netflix etc. There is also little competition between ISPs to keep this behavior in check.

Second is that censorship should be considered a very real possibility and will set a precedent that is hard to come back from. It would start with "clearly objectionable" websites, then creep. Once the government gets the idea that ISPs can block objectionable content, it will want to start ordering them about what to block. See the current state of web blocking in Great Britain for an example. Third is that we do fall squarely into bucket (3). There is barely any ISP competition. Also, we have seen plenty of examples of market failure in the past (violations of NN) and the only restraints have been consumer outcry and regulatory action. There has been enough of a pattern of this to establish the need for NN regulation. Fourth is that NN regulation is not burdensome to comply with, not likely to creep in scope, etc.

800 dude wrote:

I'm largely opposed to the FCC's open internet order, so I'll weigh in.

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So for me, the bottom line is that I'm slightly inclined to think that net neutrality rules will do more harm than good, but I'm far more confident that this is an area where we should be reactive rather than proactive.

Good post and a lot of good points but I don't think the status quo is always bad. Seems like the only thing this will accomplish is that consumers get charged a lot more for a lot less for an arguable "essential utility" and the only winners are large ISP providers who can go around holding sites hostage until they pay up (or else be subject to negative bandwidth) and some Adam Smith disciples on the grounds it's more purely capitalist.

Mr. Obvious wrote:

The idea that you don't like DuckDuckGo and that therefore you don't think net neutrality is valuable indicates that you do not understand DuckDuckGo and that you don't understand net neutrality.

(Hint: the reasons DuckDuckGo are not giving you the results you want has nothing at all to do with Net Neutrality).

No, I just used "DuckDuckGo" as a verb instead of "Google" to be snarky. I DO understand you point, but that isn't the issue here.

Still, good call.

Blazing Net wrote:

We should fight hard to defeat this as once its gone there will be almost no way reigning it back in. The ultimate push back if it is approved is for the 80% of Americans opposed to this to simply cancel internet service. Use wifi in public places or corporations as needed but cancelling home service would tell all these greedy bastards to stick up their ass.

And I'd move to Mexico.

So much going on in this thread and so little time to respond.

All data does NOT cost the same. Prioritized data costs more than data which can wait until bandwidth opens up.

Your FedEx example proves that any attempt of NN to level costs will reduce customer choices and overall efficiency because FedEx and all other delivery services charge different rates for different delivery speeds. If they were forced to charge the same rate for every package, then we would all have to wait a week for everything because no one could justify the accelerated schedule.

This is the problem with NN.

There already are niche ISPs. The free market is working, and enforcing NN would shut those down.

Trump_wins wrote:

“Do you really want to be the man who is responsible for making America another North Korea?”

“These comments are utterly absurd,” Pai said. “Getting rid of government authority over the internet is the opposite of authoritarianism. Government control is the defining feature of authoritarianism, including the one in North Korea.”

“I’m threatening democracy? Really?” Pai said to laughter from the audience. “I’d like to see the evidence that America’s democratic institutions were threatened by the rule that existed during the Clinton administration, during the Bush administration, through the first six years of the Obama administration. Don’t hold your breath, because there is none.”

https://twitter.com/BrendanBordelon/status/934418166620524544

1) the vast majority of net neutrality proponents will not support personal attacks on this guy or even his kids. don't distract from the argument.

2) how ridiculous is it to compare net neutrality to North Korea? didn't know the guy is that stupid.

3) the argument that some people create a disproportionate share of internet traffic, so the sites they are mainly visiting should pay more, is bad. if this was really the main concern, ISPs simply have to to charge more for unlimited traffic and offer other pricing plans.

some people get emotional about this issue because eventually censorship, manipulation of public opinion and violations of free speech are real concerns. it's a slippery slope.

Trump_wins wrote:

Regulations always raise fees and prices!

Obama regulated Healthcare, deductibles went up bc healthy people were paying for sick people.

Obama regulated food, food prices went up.

They don't come down.

IF this place is a liberal echo chamber so be it.

But know ahead of time, you will be scammed by Govt.

Govt is not love

Govt is force

I love that the post above ^ followed shortly after this post:

"Obama-era regulation" is a dog whistle that feeds into the subconscious of the right wing.

The word "Obama" equates to evil in their mind.

The "Obama phone" us another example.

The Lifeline program providing low cost telephone service to poor people was signed into law in 1984 by President Ronald Reagan.

It was expanded in 1996 under President Bill Clinton

It was updated to include cell phones in 2008 under President Bush.

Note that Obama had nothing to do with it.

But by including the word "Obama" the conservatives could tickle the lizard brain of their supporters to get them to rally against it without knowing what it was or what it did.

Very Funny

You put "innovation" in quotes, but new pricing models are absolutely a form of innovation. It may not be as sexy as someone inventing a new product, but it certainly can lead to greater consumer welfare in the long run, even if consumers complain about it. Uber's surge pricing is a great example. People hate it, but there's no question that it's actually better for consumer welfare than the fixed price taxi system.

This is the basic premise of the FCC's approach, but I think it's revealing to compare what the FCC does to what DOJ Antitrust or the FTC does. When the competition authorities look at market power, they collect real data on regional basis, and they review cross-elasticity of demand. The FCC just said, "well, most people don't have many choices." That's a far cry from the kind of rigorous economic analysis that is normally considered necessary to justify economic intervention. Moreover, the FCC comes up with its numbers by continually revising upward the speed that counts as "real broadband" So, for instance, DSL isn't typically fast enough, and is therefore excluded from consideration entirely, even though imperfect substitutes can have a major disciplining effect on markets. The same is true, probably to a greater extent, of competition between mobile and fixed broadband.

To be clear, I'm not saying that broadband providers don't have market power (or that they don't have market power in any areas). What I'm saying is the FCC's back-of-the-envelope math just doesn't cut it. If we're going to regulate, we should do our homework first.

above_average_joe wrote:

3) the argument that some people create a disproportionate share of internet traffic, so the sites they are mainly visiting should pay more, is bad. if this was really the main concern, ISPs simply have to to charge more for unlimited traffic and offer other pricing plans.

They can do this, but there's evidence that charging for consumption reduces demand, sometimes significantly. Consumers prefer a flat rate, and once they pay for it, they use it more.

Also, the fear that ISPs will use their power to throttle some of their customers in order to coerce them to pay more then the average rate, or to undermine them to make their own competing products look better ... is historically correct ... and is nothing to fear. In fact it's a good thing.

Vanderbilt, the railroad giant, tried to undermine Rockerfeller's oil empire by dramatically raising the shipping rates for oil above what he charged for other freight. There was no Rail Neutrality law back then.

Rockefeller responded by building the first oil pipeline and the world was changed forever.

The government isn't smart enough to deal with the assholes of the world, but people like Rockefeller are. Let the ISPs jerk people around, we'll find a way to make them wish they hadn't done it. But if the government boxes us in with regulations and keeps people from implementing clever solutions, then we all suffer.

Do we need to talk about how wireless communication was held back by government regulations for 40 years? Look it up. You folks like your cell phones right?

800 dude wrote:

above_average_joe wrote:

3) the argument that some people create a disproportionate share of internet traffic, so the sites they are mainly visiting should pay more, is bad. if this was really the main concern, ISPs simply have to to charge more for unlimited traffic and offer other pricing plans.

They can do this, but there's evidence that charging for consumption reduces demand, sometimes significantly. Consumers prefer a flat rate, and once they pay for it, they use it more.

Maybe, but at this point no one is going to not pay for internet service as it's become more or less essential. Raise the flat rate (like they've been doing for years) and get on with it

One issue that hasn't been mentioned is that when ISPs give preferential treatment to certain websites over others, it's typically not obvious to the consumer that they are doing it. If hulu is fast and netflix is slow, I really have no way of knowing why so its difficult for me as a consumer to apply pressure my ISP. The whole free market argument that consumers can compel companies to do what they want only applies when there are enough rules in place to keep companies honest and provide consumers with enough information to know what's happening. Maybe getting rid of NN would be okay as long as your browser popped up a message whenever your internet speed was being throttled.