Internet Freedom and Innovation at Risk: Why Congress Must Restore Strong Net Neutrality Protection

Document Date: September 22, 2006

The creation and dynamic growth of the Internet is in part the result of strong Net Neutrality protection. All of that changed in 2005, when the Federal Communication Commission (FCC) suddenly repealed longstanding Internet non-discrimination principles with the blessing of the United States Supreme Court. Since then, the keys to the Internet have been turned over to a handful of profit-driven telecoms and cable companies. Immediate restoration of well-established Net Neutrality principles is necessary to protect freedom and innovation on the Internet.

About Net Neutrality

The Internet was born and flourished under well-established Net Neutrality protections. These protections are derived from Title II of the Communications Act of 1934, which grants the Federal Communications Commission (FCC) the authority to regulate telephone companies as common carriers. As computer technology was developed, data began to flow over telephone lines. In the 1970s and 1980s, the FCC responded by ensuring that network providers would provide access for data transmissions on a non-discriminatory basis by protecting them like other communications services. Title II was strengthened by making common carrier telephone networks available to independent equipment manufacturers and Internet Service Providers (ISPs).

Net Neutrality rests on three guiding principles:

  • No discrimination against lawful content. Net Neutrality ensures that Internet users have the right to access lawful websites of their choice and to post lawful content, free of discrimination or degradation by network providers. In other words, network providers cannot block or slow down lawful content they dislike. A vibrant marketplace of ideas on the Internet cannot function with corporate censors.
  • Equal Internet access at an equal price. Under Net Neutrality, network providers cannot give preferential treatment to their own services at the expense of competing sites consumers want to use. In many markets, Internet access is only available through one or two providers. Equal access at an equal price means that network providers cannot abuse their monopoly by barring access, providing slower access, or charging higher premiums to popular services competing with their own. The free market, and not tollbooths run by a few corporate monopolies, must be allowed to decide Internet winners and losers.
  • Consumers choose network equipment. Since 1968, Net Neutrality has allowed consumers to choose the equipment they want, or make it themselves, and attach it to any network. In 1996, Congress reaffirmed this right by directing the FCC to adopt regulations permitting consumers to have the final choice of cable boxes used to convert television signals. Net Neutrality prevents network providers from eliminating competing equipment by making it incompatible with their gateway. In the process, it ensures that equipment choice remains in the hands of Internet users, where it rightfully belongs.

The Internet has become the 21st century’s marketplace of ideas because of these bedrock Net Neutrality principles. Anyone with access to the Internet can create, download, e-mail, or post any lawful content they want without fear of censorship or artificial tiered access. Information can be shared worldwide with just a few keystrokes. Budding journalists who aspire to be the next Matt Drudge can post blogs at the cost of a connection fee that all Internet users pay. Home videos can be distributed at real time speeds equal to the latest unwanted corporate advertisements. Net Neutrality has made the Internet the most democratic forum for free speech in the world.

In 2005, the Telecoms Captured the FCC and Eliminated Net Neutrality Protection Following the Supreme Court’s Brand X Decision.

A handful of big telecoms and cable companies provide Internet network services, including AT&T, BellSouth, Comcast, Qwest, Sprint, Time-Warner, and Verizon. Over the last five years, these corporations have spent well over $100 million lobbying Congress and the FCC to eliminate established Net Neutrality protections. In 2002, the network providers captured the FCC and convinced it to abandon consumer protections by reclassifying cable modem services as unprotected information services instead of protected communications services. Federal courts initially rejected the FCC’s efforts to strip Net Neutrality.

All of that suddenly changed in June 2005 with the Supreme Court’s decision in NCTA v. Brand X. In Brand X, the Supreme Court for the first time found that broadband access constituted information services. The Court concluded that the FCC had discretion to choose whether to retain Net Neutrality protections for all broadband users. Shortly after the Brand X decision, the FCC further curtailed Net protections by reclassifying Digital Subscriber Line (DSL) services as information services. Within a span of a few months, the FCC and the Supreme Court managed to destroy decades of Net Neutrality protections for nearly every American.

The assault on Internet freedom will only get worse. Although the FCC imposed Net Neutrality protections in merger agreements for certain network providers such as SBC/AT&T and Verizon/MCI, those protections expire in 2007. In July 2006, the FCC declined to include any Net Neutrality protections in Comcast and Time-Warner’s acquisition of Adelphia Cable. The FCC is expected to follow a similar pattern of opposing Net Neutrality in the future, as network providers continue to consolidate into an even smaller pool of Internet gatekeepers.

Without Net Neutrality, network providers are free to discriminate. Although the telecoms and cable companies offer the public gateways to the Internet, they are not considered “state actors” that trigger free speech protections under the First Amendment. Therefore, they can effectively shut down the 21st century marketplace of ideas by screening Internet e-mail traffic, blocking what they deem to be undesirable content, or pricing users out of the marketplace. Historically, Net Neutrality protections under the Communications Act filled the free speech gap. Since those protections were removed, nothing prevents network providers from discriminating against Internet users and application and service providers in terms of content, quality of access, and choice of equipment.

Without Net Neutrality Protections, Telecoms and Cable Companies Are Engaging in Content and User Discrimination.

Big network providers have already begun taking steps to stifle innovation and freedom on the Internet.

Several telecom executives have stated their intent to create tiered access that restricts fast lanes to those willing and able to pay their higher premiums:

  • Edward Whitacre, Chief Executive Officer (CEO), AT&T Whitacre has been the most candid in stating the telecoms’ intentions: “How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that… Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment and for… anybody to expect to use these pipes for free is nuts.”
  • Bill Smith, Chief Technology Officer (CTO), BellSouth. Smith “told reporters and analysts that an Internet service provider such as his firm should be able, for example, to charge Yahoo Inc. for the opportunity to have its search site load faster than that of Google Inc. Or, Smith said, his company should be allowed to charge a rival voice-over-Internet firm so that its service can operate with the same quality as BellSouth’s offering.”
  • John Thorne, Vice President and Deputy General Counsel, Verizon. Thorne described Verizon’s plans to charge websites available on networks provided by the big telecoms, stating that they are “enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers.”

In 2006, big network providers have censored lawful content and blocked their Internet competitors:

  • Time Warner’s AOL blocked all emails that mentioned, an advocacy campaign opposing AOL’s pay-to-send e-mail scheme.
  • BellSouth blocked its customers’ access to in Tennessee and Florida.
  • Cingular Wireless, run by AT&T, bars access to PayPal to make a payment on eBay because it has struck a deal with another online payment service, which pays Cingular for that privileged status.

The big telecoms and cable companies have been on their best behavior while Congress is considering legislation that would reinstate longstanding nondiscrimination principles on the Internet. Despite this heightened scrutiny from Congress, network providers have engaged in content and user discrimination. Their discrimination will only increase if Congress does not immediately restore strong Net Neutrality protections.

Restoring Freedom and Innovation to the Internet through Strong Net Neutrality Protection.

Without the vigorous non-discrimination principles in place before 2005, a few corporate conglomerates will control everything you can say or do on the Internet. Net Neutrality is needed, and it is needed now.

The United States Senate is currently considering a bipartisan bill offered by Senators Olympia Snowe and Byron Dorgan, S. 215, the Internet Freedom Preservation Act, that would restore Network Neutrality protections in place before July 2005. The Snowe-Dorgan bill requires that any content, application, or service offered through the Internet be provided on a basis that is “reasonable and nondiscriminatory” and equivalent to the access, speed, quality of service, and bandwidth of services offered by network owners. It further prohibits network providers from blocking or degrading lawful Internet content. Finally, it leaves the choice for attaching legal devices to networks squarely in the hands of consumers, and not the telecoms and cable companies.

Only the Snowe-Dorgan bill, or similar legislation that restores the three guiding principles of Internet freedom and innovation, will prevent the content and access discrimination that the telecoms and cable companies are seeking.

Call your senators about this issue. Capitol Switchboard: (202) 224-3121

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