On December 14th, the Republican-majority Federal Communications Commission (FCC), led by Donald Trump appointee, Ajit Pai (the former top lawyer and lobbyist for Verizon), will likely vote to repeal the Obama-era rules that ensure the net neutrality we currently have in America is held in place. Net neutrality means all data on the internet is treated equally, and a service provider cannot prioritize certain companies or data, or charge users more to access specific websites or apps. If one would like to see what an environment without net neutrality looks like in reality, one simply needs to look at Portugal where current loopholes allow local wireless carriers, such as Meo, to charge more for access to certain apps.
Do you like messaging? Under Meo’s plan, in addition to your monthly bill and excess data charges, if you would like access to their messaging plan which includes WhatsApp, Skype & Facetime, you pay an additional $5.86/month. Are you into social media? If you want to access social networks like Twitter, Instagram, and Facebook, you will pay an additional $5.86/month. Do you enjoy using video apps like YouTube and Netflix? If you want that luxury, in Portugal, where wireless carriers have found loopholes to circumvent Net Neutrality in their mobile app system, you are forced to pay an additional $5.86/month.
Guess what – if you like music apps, such as Spotify or Apple Music, you pay an additional $5.86/month on top of the charges you’re already paying for the app. If you think it’s useful to have access to emails such as Gmail, Yahoo or Hotmail, you guessed it, you pay an additional $5.86/month. To summarize, if the apps you use the most are WhatsApp, Instagram, YouTube, Spotify, and Gmail, on top of the charges from the apps themselves, your monthly bill, and your data usage, in Portugal you would be looking at about an additional $30 per month ($360 per year) into the pocket of your wireless carrier, Meo.
In addition to charging consumers more to access certain applications, telecom conglomerates will be able to charge the internet websites and businesses themselves for inclusion in their plans, i.e. for preferential treatment, the price of which will likely be passed onto the consumer. If Netflix is forced to pay Verizon to be included in their video package, not only will the consumer pay more to the telecom conglomerate (Verizon) to access the app, the price to use the app will also likely increase since Netflix now has higher expenses and has a fiduciary duty to maximize profit for its shareholders. If Ajit Pai’s plan goes through, this concept will be applied not only to mobile applications but the internet in general.
Pai’s plan gives telecom corporations the ability to block users from accessing the websites of any business unable (or unwilling) to pay the fee required to be included in their various plans. Hypothetically, they could also easily use it to block political opponents – for example, if Verizon (who has spent a considerable amount lobbying Congress for the repeal of Net Neutrality) doesn’t like the fact that they were named in this article, Pai’s plan gives them the ability to slow down access to our website for everyone on their network, essentially blocking us on all Verizon phones and networks, as they also provide internet. Are all the possible scenarios named in this article likely to happen on Day One? Though nobody can be sure, because of the public outrage that would ensue, in my opinion probably not – however, given corporations’ fiduciary responsibility to maximize profits for shareholders, my guess is it is likely to be introduced bit by bit over time so the change isn’t as noticeable.
Aside from the increased prices on consumers and potential censorship implications, the loss of net neutrality will result in the formation of a cartel comprised of telecommunication and established technology companies controlling what the masses can access on the internet. For example, Netflix is currently a larger company than Hulu, therefore it is in a much better position to pay potential fees to telecom companies for its company to access a fast lane, or to be included in a potential plan. If a consumer decides he wants to try Hulu, he will likely need to pay more to access a faster internet to make up for the slow speed since Hulu was unable to pay the fee. As the telecom conglomerates continue increasing prices to profit more, the largest technology and internet companies will monopolize their respective markets as poorer competitors are forced out and a significant barrier to entry blocks healthy competition from entering the field.
Right now, as a species, we are transitioning into a society where many of the current jobs people work will be replaced by automation. It is more important now than ever before that we maintain a free and open internet as it will be one of the few remaining sectors where innovators can flourish and people can start their own businesses and become their own boss. There are very few industries and facets of life that haven’t been affected by the internet, and this exponential growth has exploded largely because of the free and open internet thanks to net neutrality.
The internet has become such a big part of our lives that the United Nations declared internet access (with the current net neutrality laws in place) a basic human right. Without access to an open market, Facebook would never have replaced MySpace, Google would not have become the most popular search engine, and Spotify would not have become the most popular music streaming service. They all provided better products than their predecessors, thus forcing them out the market by better serving the needs of their consumers. The free and open environment for the internet provided by net neutrality ensures we have the necessary conditions to foster innovative ideas, and the thus creates services, wealth and jobs for a large number of people.
Business Insider: “If you want to see what America would be like if it ditches Net Neutrality, just look at Portugal”, Rob Price (11/21/2017)