The new chief telecommunications regular appointed by the new administration, Ajit Pai, is rolling out the Trump net neutrality Plan. The new head of the Federal Communication Commission (FCC) has made it very clear that he wants to dismantle the net neutrality policy framework aggressively pursued by the Obama administration.
Net neutrality is a regulation policy that demands that all internet service providers (ISPs) treat all data on the internet the same. ISPs are forbidden from blocking or slowing down any websites, even if those websites are data intensive and eating up a lot of bandwidth.
Essentially, ISPs want to charge more for “bandwidth hogs.” Under previous policy, all content was treated equally. The new administration’s policy is now veering in the direction of “taking a weed whacker” to net neutrality.
Big telecom companies say that net neutrality is stifling innovation, because they refuse to invest in internet infrastructure when they can’t get people to pay for their respective data usage. They say that if they could charge people who use data-consumption heavy sites more, they could provide more advanced fiber networks across the nation.
Like many of the Trump administration’s ideological stances, they believe that the Obama era was characterized by regulatory overreach. Instead, the market should be left alone by the government, and allow ISPs to charge users for their data binges.
Allowing differential treatment, opponents of net neutrality claim, will level the playing field. Consumers who are light data users would stop subsidizing users who gobble up hoards of data.
Supporters of net neutrality argue that ISPs have a great deal of monopoly power because we have relatively few choices as consumers when we purchase internet access. As a result, ISPs could start to play favorites with certain websites, particularly considering that ISPs are now aggressively buying up content providers and have their own agendas to push.
As a relatively clear example, Time Warner Cable is a widely used ISP around the country and it also is an investor in Hulu. Were net neutrality dismantled, Time Warner Cable could effectively throttle streaming bandwidth to Netflix, in order to encourage users to use the faster bandwidth on Hulu. And, because ISPs often have regional monopolies, Netflix fans would not be easily able to just go switch to a different ISP.
Net neutrality supporters will also be quick to point out that Mr. Pai was formerly a lawyer for telecom giant Verizon. In the past, he specifically has called out Netflix for using technology that allegedly built internet fast lanes for its own content. Netflix vehemently denied the allegations.
Net neutrality is probably on its way out as the Trump administration’s policy proposals become the law and regulation of the land.
Something to be on the lookout for is how the disappearance of net neutrality emboldens mergers between content providers and ISPs. The Time Warner-AT&T merger that brings these two sides of the business together will probably end up being a business model that others will follow.
Ironically, while Pai has offered up his support for the merger, President Trump promised to block that deal. In the end, how exactly all of this plays out is anyone’s guess.
This article first appeared on GenFKD.org
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David is the Editor of Bold. He's especially passionate about millennial economic empowerment. A former local news reporter, David is originally from the Little Havana area in Miami, and later became a pioneer resident of the Disney-inspired town of Celebration, Florida. David holds a Master’s in Public Policy from the Harvard Kennedy School.