292 Part Two Information Technology Infrastructure INTERACTIVE SESSION: ORGANIZATIONS THE BATTLE OVER NET NEUTRALITY What kind of Internet user are you? Do you ferentiated pricing is the fairest way to finance nec- primarily use the Net to do a little e-mail and look essary investments in their network infrastructures. up phone numbers? Or are you online all day, Internet service providers point to the upsurge in watching YouTube videos, downloading music files, piracy of copyrighted materials over the Internet. or playing online games? If you have a smartphone, Comcast, the second largest U.S. Internet service pro- do you use it to make calls and check the Web every vider, reported that illegal file sharing of copyrighted so often, or do you stream TV shows and movies material was consuming 50 percent of its network on a regular basis? If you’re a power Internet or capacity. In 2008, the company slowed down trans- smartphone user, you are consuming a great deal of mission of BitTorrent files used extensively for piracy bandwidth, and hundreds of millions of people like and illegal sharing of copyrighted materials, includ- you might start to slow the Internet down. You’Tube ing video. The Federal Communications Commission consumed as much bandwidth in 2007 as the entire (FCC) ruled that Comcast had to stop slowing peer- Internet did in 2000, and AT&T’s mobile network to-peer traffic in the name of network management. will carry more data in the first two months of 2015 Comcast then filed a lawsuit challenging the FCC’s than in all of 2010. authority to enforce network neutrality. In April 2010, If user demand for the Internet overwhelms a federal appeals court ruled in favor of Comcast that network capacity, the Internet might not come to a the FCC did not have the authority to regulate how an screeching halt, but users would be faced with very Internet provider manages its network. This was a con- sluggish download speeds and slow performance siderable blow to net neutrality. In late 2010, Comcast of Netflix, Spotify, YouTube, and other data-heavy reportedly began charging Level 3 Communications, services. Heavy use of iPhones in urban areas such which helps stream Netflix’s movies, an additional fee as New York and San Francisco has already degraded for continued normal service. Level 3 asked the FCC to service on the AT&T Wireless network. AT&T reports investigate the action that 3 percent of its subscriber base accounts for 40 Groups favoring net neutrality are pushing Congress percent of its data traffic. to find ways to regulate the industry to prevent net- Some analysts believe that as digital traffic on work providers from adopting Comcast-like prac- the Internet grows, even at a rate of 50 percent per tices. The strange alliance of net neutrality advocates year, the technology for handling all this traffic is includes MoveOn.org, the Christian Coalition, the advancing at an equally rapid pace. But regardless American Library Association, every major consumer of what happens with Internet infrastructure, costs group, and a host of bloggers and small businesses, as for Internet providers will continue to increase, and well as streaming video services like Netflix prominent media companies are searching for new Net neutrality advocates argue that the risk revenue streams to meet those costs. One solution is of censorship increases when network opera- to make Internet users pay for the amount of band- tors can selectively block or slow access to certain width they use. But metering Internet use is not content such as Netflix video streams or access universally accepted, because of an ongoing debate to competing low-cost services such as Skype. about network neutrality. Proponents of net neutrality also argue that a neutral Network neutrality is the idea that Internet Internet encourages everyone to innovate without service providers must allow customers equal access permission from the phone and cable companies to content and applications, regardless of the source or other authorities, and this level playing field has or nature of the content. Presently, the Internet is spawned countless new businesses. Allowing unre- indeed neutral: all Internet traffic is treated equally stricted information flow becomes essential to free on a first-come, first-served basis by Internet back- markets and democracy as commerce and society bone owners. However, this arrangement prevents increasingly move online. telecommunications and cable companies from Network owners believe regulation to enforce charging differentiated prices based on the amount net neutrality will impede U.S. competitiveness by of bandwidth consumed by content being delivered stifling innovation, discouraging capital expendi- over the Internet. These companies believe that dif- tures for new networks, and curbing their networks Chapter 7 Telecommunications, the Internet, and Wireless Technology 293 ability to cope with the exploding demand for through the Xbox 360 that does not count against its Internet and wireless traffic. U.S. Internet service broadband data cap of 250 gigabytes per month. This lags behind many other nations in overall speed, gives Comcast’s television programming an edge over cost, and quality of service, adding credibility to this rival streaming shows, which will consume subscrib- argument. ers’ data allotment. Netflix and other competitors And with enough options for Intemet access, are incensed, arguing that this flies in the face of the regulation would not be essential for promoting net concept of net neutrality and represents an anti-com- neutrality. Dissatisfied consumers could simply switch petitive practice. to providers who enforce net neutrality and allow In 2011, nearly every broadband provider unlimited Internet use. instituted a cap on data, charging additional fees to In December 2010, the FCC approved measures users that go over that limit. Many analysts have that would allow the federal government to regu- long argued in favor of these caps, but deals like late Internet traffic. Broadband providers would be those between Comcast and Microsoft are likely to required to provide information regarding Internet draw the ire of the FCC going forward. Currently, speeds and service to their subscribers, and they could the net neutrality laws on the books are riddled with not block access to sites or products that compete loopholes. For example, they allow broadband provid- against their own products. However, the regulations ers to allocate portions of their networks for special did not officially safeguard net neutrality, and wireless “managed” services. Still, public sentiment in favor of providers may block applications that use too much net neutrality is still strong. bandwidth. Wireless providers have already moved to develop Sources: Eduardo Porter, “Keeping the Internet Neutral,” The New York Times, May 8, 2012; Matt Peckham, “Netflix CEO Takes Swing tiered plans that charge heavy bandwidth users at Comcast Xfinity over Net Neutrality.” Time Techland, April 16, larger service fees, and online content providers have 2012; Greg Kensinger, WTW Ends All-You-Can-Eat,” The Wall Street struck exclusive deals with distributors that leave Journal, March 1, 2012; John Eggerton, “Net Neutrality Rules Signed their competitors at a disadvantage. For example, Off On By OMB, Broadcasting & Cable, September 13, 2011; “FCC Approves Net Neutrality But With Concessions,”cWeck, December in 2012, Comcast struck a deal with Microsoft to 22, 2010; and Brian Stelter, “Comcast Fee Ignites Flight Over Videos provide streaming video via its Xfinity TV service on Internet, The New York Times, November 30, 2010. CASE STUDY QUESTIONS 1. What is network neutrality? Why has the Internet operated under net neutrality up to this point in 2. Who’s in favor of net neutrality? Who’s opposed? Why? time? 3. What would be the impact on individual users, businesses, and government if Internet providers switched to a tiered service model? 4. Are you in favor of legislation enforcing network neutrality? Why or why not?