How Has Net Neutrality’s Repeal Impacted Internet Infrastructure?

Staying ahead in the telecommunications industry today requires following market trends as well as keeping a watchful eye on wider societal and legal issues that affect how we buy, sell, and use connectivity and telecom products. 

In this blog, we’re stepping back to get a big-picture view of net neutrality. We’ll explore what net neutrality is, arguments for and against the net-neutrality repeal and present the real-world implications – for both internet service providers and consumers like you and me.

First off, let’s make sure everyone is on the same page.

What is Net Neutrality?

As defined by the Collins Dictionary, it’s… “the principle that internet service providers should allow access to all content regardless of the source, and without preferring or blocking particular websites.”

Before we dive in, let’s take a moment to examine what this means from both an internet user and an internet business perspective.

For the user – regardless of your social, economic, or political status – you’re entitled to the same level of access and user experience from your internet service provider (ISP).

For a business –  internet service providers should allow the same access to all content, services, and applications, no matter who owns those services.

Is Net Neutrality a Legal Requirement?

It was…for about a minute. 

The Obama administration introduced net-neutrality legislation in 2015, under Title II of the Communications Act. The legislation prohibited ISPs from the following.

• Blocking lawful content, websites, or apps

• “Throttling” the transmission of such content to slow it down

• Segregating or discriminating by creating internet “fast lanes” for favored content, websites, or apps.

Two years later, under a new government regime, the Federal Communications Commission (FCC) – the agency responsible for enforcing these laws – repealed Obama’s net-neutrality legislation. 

The agency’s chairman, Ajit Pai, had opposed the legislation since before it was introduced – he claimed that the original case for Title II was a “fact-free zone,” introduced in response to “hypothetical harms and hysterical prophecies of doom.”

So, was the net-neutrality repeal a victory for common sense, as Ajit Pai and the FCC suggested? Or have the rights of consumers on the public internet been sacrificed in favor of a market-dictated Wild West, where the winners take the spoils?

To answer this question, we’ll need to go a little deeper into both sides of the argument – looking at the problems net neutrality intended to solve, and the equally thorny issues regulating this way could cause. 

The Argument for Net Neutrality

To explore Ajit Pai’s “hypothetical harms,” let’s use a real-world example of a company that could do a lot of damage, should it decide to use its considerable powers in a less-than-neutral way.

Comcast is the largest internet service provider in the US, the second-largest broadcasting and cable-TV provider, and the third-largest home telephone provider. It still abides by the spirit of net neutrality, even though the law’s been repealed. But what kind of damage could it do…if it were so inclined?

Politics. Comcast owns MSNBC, a left-leaning news agency. Without net neutrality, Comcast could limit or restrict their customers’ access to news agencies with opposing views (e.g., Fox News) without any legal consequences.

Consumer access to service-provider competition. There are several ISPs in competition with Comcast, both at a local and national level. Without net neutrality, what’s to stop Comcast from obstructing consumer access to their competitors’ URLs and marketing materials?

Voice over IP (VoIP) and other internet services. As a VoIP service provider, there’s little to stop Comcast from hindering the performance and accessibility of competitors like Vonage, Zoom, or Microsoft Teams.

Content Providers. As part-owners of Hulu, Comcast could throttle or restrict streaming services like Netflix or YouTube, to gain a competitive advantage for Hulu.

The Argument Against Net Neutrality

As we mentioned before, Comcast isn’t just a carrier. In addition to building, expanding, and maintaining the network infrastructure, it’s heavily invested in providing content, services, and applications.Meanwhile, their competitors and other industry participants (companies like Netflix or Google), get to have their content ride that information superhighway, just like any other enterprise client, without having to build that infrastructure themselves. And as our need for services and content grows ever greater, so do our connectivity and bandwidth requirements, courtesy of the network infrastructure that ISPs like Comcast have bought and paid for. Today, Netflix alone accounts for 15% of internet data transmission, making up a significant portion of the bits that travel over Comcast’s infrastructure, while Comcast gets none of the spoils.

To comply with Title II, ISPs like Comcast were forced to facilitate high-volume transfer speeds to ensure “unrestricted access.” Of course, this means more capital expenditures for companies like Comcast to support these speeds.

According to some, including Ajit Pai, this had a knock-on effect on infrastructure investment – deprived of the free-market agility on which the internet has largely been built, network infrastructure became a less inviting opportunity. ISPs became less willing to create and expand infrastructure to carry entire industries, with no competitive advantage. So, by that rationale, everybody loses.

The Impact of The Net Neutrality Repeal

In the intervening years since the repeal, there has been little change in the status quo. Part of the reason for the inertia is intervention at the state level. Several states, including California, Washington, and Maine, have introduced their own net-neutrality legislation, hindering any attempts by ISPs to move the needle.

However, as ISPs continue to expand into additional services and verticals, these ultra-competitive markets may well see ISPs begin to take greater advantage of the net neutrality repeal.

So, what does this mean for consumers? 

At this stage, it’s hard to say – while rumors abound of plans to package digital products and services differently, according to whether the ISP has a stake or not, no ISP has currently announced any plans of this sort.

If these plans take effect, consumers might expect to receive a package of content, apps, and services included with their basic internet service. Rival content, apps, and services would then be available as an optional paid “add-on.”

And as for competitive providers? An element of negotiation is likely to determine the precarious relationship between the major ISPs and the competitive service providers they allow to use their network infrastructure.

At first glance, it might seem more than fair for service providers to shoulder some of the burden of maintaining and expanding the physical network. 

However, it’s worth considering how an additional cost may well set the bar too high for fresh entrants to the market. If you’re launching an internet service start-up against established providers with existing revenue streams, can you afford to start paying these additional costs, too?

As you can see from this brief introduction to the evolving drama wrought by the net-neutrality repeal, the issues are far from simple. While for now the market will continue to dictate net neutrality, it’s unlikely that future developments will be free from government regulation – cases like Gonzalez vs. Google may yet spell huge changes in these most volatile of industries.

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