What Is Net Neutrality?

Network (Net) neutrality is the concept that all data on the internet should be treated equally by corporations, such as internet service providers (ISPs) and governments, regardless of content, user, platform, application, or device. In other words, net neutrality stipulates that service providers should not slow down nor block content from users.

Key Takeaways

  • Net neutrality requires all internet service providers (ISPs) to provide the same level of data access and speed to all traffic, and that traffic to one service or website cannot be blocked or degraded.
  • Net neutrality also states that ISPs are not to create special arrangements with services or websites, in which companies providing them are given improved network access or speed.
  • Net neutrality advocates suggest that by not allowing ISPs to determine the speed at which consumers can access specific websites or services, smaller companies will be more likely to enter the market and create new services.
  • Net neutrality critics argue that by forcing ISPs to treat all traffic equally, the government will ultimately discourage the investment in new infrastructure and will also create a disincentive for ISPs to innovate.
  • U.S. net neutrality laws were enacted by the Obama administration in 2015 and later repealed by the Trump Administration in 2018.

Understanding Net Neutrality

Network neutrality is a principle that all web traffic should be treated equally. It argues that the internet should be accessible to everyone and that those who provide it shouldn't give preferential treatment and push faster data to some users.

Network neutrality requires all ISPs to provide the same level of data access and speed to all traffic, and that traffic to one service or website cannot be blocked or degraded. ISPs are also not to create special arrangements with services or websites, in which companies providing them are given improved network access or speed.

History of Net Neutrality

The term “network neutrality” was coined in the early 2000s by Columbia University law professor Tim Wu in a paper about online discrimination. The concept was floated in response to efforts by the Federal Communications Commission (FCC), a United States regulator body, to require broadband providers to share their infrastructure with competing firms.

The Supreme Court struck down the FCC regulation in 2005. The sticking point for regulation had been whether broadband service providers were considered information services, which allows users to publish and store information on the internet, or telecommunication services.

In 2015, under the Obama Administration, net neutrality rules were approved. Those rules, in part, barred ISPs such as AT&T and Comcast from deliberately speeding up or slowing down traffic to or from specific websites based on demand or business preferences.

Those changes proved to be short-lived, though. On Nov. 21, 2017, Ajit Pai, the chair of the FCC appointed by former President Trump, unveiled a plan to roll back the rules set forth by the prior administration. This plan went into effect on June 11th, 2018. On Oct. 1, 2019, the D.C. Circuit Court of Appeals upheld the FCC's plan to repeal most of the provisions of Net Neutrality but struck down a provision that would block states from implementing their own open internet rules.

In a statement issued by the FCC, Commissioner Jain said, "Today’s decision is a victory for consumers, broadband deployment, and the free and open internet. The court affirmed the FCC’s decision to repeal the 1930s utility-style regulation of the internet imposed by the prior administration. The court also upheld our robust transparency rule so that consumers can be fully informed about their online options..."

The outcome of the 2020 presidential election is expected to result in a battle to get tough net neutrality rules restored—the democrats and President Biden have long championed open internet rules.

Advantages and Disadvantages of Net Neutrality

Advantages

Advocates for network neutrality suggest that by not allowing ISPs to determine the speed at which consumers can access specific websites or services, smaller companies will be more likely to enter the market and create new services. This is because smaller companies may not be able to afford to pay for “fast lane” access, while larger, more established companies can.

Advocates view net neutrality as a cornerstone of an open internet and propose that it be mandated by law in the U.S. to prevent broadband providers from practicing data discrimination as a competitive tactic. For example, several well-established social network websites were created without much seed capital. Had they been forced to pay extra to be accessed at the same speed as competitors, they may never have become successful.

Proponents of net neutrality include human rights organizations, consumer rights advocates, and software companies, who believe that open internet is critical for the democratic exchange of ideas and free speech, fair business competition, and technological innovation. They argue that cable companies should be classified as "common carriers," like public utility companies or public transportation providers, who are forbidden by law from discriminating among their users.

They advocate the principle of a "dumb pipe," maintaining that intelligence should be located only at the ends of a network, and the network ("pipe") itself should remain neutral ("dumb"). Advocates of net neutrality see municipal broadband as a possible solution.

Disadvantages

Critics of net neutrality suggest that by forcing ISPs to treat all traffic equally the government will ultimately discourage the investment in new infrastructure, and will also create a disincentive for ISPs to innovate. The up-front costs associated with laying down fiber optic wire, for example, can be very expensive, and critics argue that not being able to charge more for that level of access will make the investment more difficult to pay off.

Opponents of open internet include conservative think tanks, hardware companies, and major telecommunication providers. The providers argue that they must be allowed to charge tiered prices for access to remain competitive and generate funds needed for further innovation and expansion of broadband networks, as well as to recoup the costs already invested in broadband.

Pros
  • Reduces barriers to entry for smaller companies

  • Prevents service providers from discriminating to gain a competitive edge

  • Promotes free speech and the free flow of ideas

Cons
  • Discourages service providers from innovating

  • Stifles growth by disallowing ISPs from charging tiered prices

  • Blocks investments in new infrastructures

Example of Net Neutrality

AT&T has been scrutinized for violating net neutrality rules for more than a decade. From 2007-2009, AT&T prevented Apple from allowing its users to access Skype and other Voice over Internet Protocol (VoIP) services to make calls.

In 2012, the telecommunications giant once again blocked Apple users from accessing FaceTime on its network. Users could only access the application when connected to the internet via WiFi.

Apple responded with an iOS update that would allow iPhone users to access FaceTime over any cellular network. Rather than continue violating the FCC's Open Internet order, AT&T began charging customers extra fees for data plans.

Net Neutrality FAQs

What Is Net Neutrality and Why Is It Important?

Net neutrality is the concept that states that organizations, such as Internet service providers, should treat all data on the internet equally. It promotes a free and open internet, where users can access content without restriction, provided the content does not violate any laws.

Is Net Neutrality Gone?

In June 2018, the net neutrality rules, established under the Obama administration, were officially repealed. In favor of the repeal, FCC chairman Ajit Pai stated that the regulations were founded on "hypothetical harms and hysterical prophecies of doom."

Does the UK Have Net Neutrality?

The European Union (EU) formed regulations to promote and protect an open internet, preventing internet service providers from restricting and blocking users' access to lawful content. Certain exceptions, such as the ability to slow traffic at the request of a court order, apply.

Is There Net Neutrality in India?

In 2017, India developed some of the strictest net neutrality laws in the world. Policymakers and Indian activists, with a desire to promote an open internet and widespread internet access to the nation's citizens, advocated together for net neutrality laws. Service providers who violate these regulations face losing their license to operate.

What Did the FCC Do to Net Neutrality?

The Trump administration repealed net neutrality in 2018, and the FCC voted to keep uphold the order. In 2019, a federal appeals court urged the FCC to reconsider its stance on repealing net neutrality, to which the FCC responded to keep it intact.

The Bottom Line

Net neutrality is a concept that seeks to promote an open and free internet—one unencumbered by service providers and other organizations. It might seem that operating without discrimination is logical, but it has been and continues to be a hot topic for political debate. Although U.S. net neutrality laws implemented by the Obama administration were later repealed by the Trump Administration, it still remains a source of heated exchange.