Why end of neutrality would end Internet as we know it

A report out of New York University's law school stresses a key - and oft-misunderstood - point: Today's Internet evolved under net-neutrality rules.  The wide-open Web that spurred so much U.S. innovation and growth occurred in a net-neutral environment because it was governed by the same content- and device-neutral rules that governed the nation's phone networks after the early-'80s breakup of the old AT&T monopoly.

Now cable- and phone-network owners, hoping to protect their investments by warding off competition with their traditional niches in entertainment and telecommunications, are fighting every attempt to continue those old rules. That's why  Michael Livermore, executive director of NYU's Institute for Policy Integrity, says adopting net-neutrality rules is the "cautious approach" and essential to preserving "the open Internet we have come to rely on and the economic benefit we gain from it.”

The report is titled "The Value of Open" (click here to read it), and makes that key point right away:

Much of the debate over whether the government should enact net neutrality rules seems to leave out, or obscure, a fundamental yet critical point: our current Internet is already effectively “net neutral.” It is this neutrality that has allowed for the Internet industry to explode over the last two decades. Not only do the market players sometimes miss this point, but lawmakers do so as well.

The report is a bit wonkish, but it goes on to explain how we came to this critical juncture, where ISPs have both the means and the motive to inspect the content that flows through their networks, and can prioritize it, degrade it, or even block it (as China does) to advance their own interests:

Usually a government does not need to issue new rules to preserve a status quo. However, in the case of the Internet, two recent developments threaten to fundamentally alter the existing landscape, making intervention necessary and timely. First, technologies allowing ISPs to price discriminate have been created and put into use. For example, Deep Packet Inspection (DPI) technology has become increasingly sophisticated over the last decade. DPI and similar technologies allow ISPs to distinguish between Internet traffic on the basis of its data content, as well as the location where it originated. Once traffic is identified, it can be prioritized in a manner that was not possible before — for example, by creating a fast lane and a slow lane for certain content. Given ISPs’ financial incentives to discriminate between content providers, and significant advancements in their ability to do so, agency action is needed.

This action should be prompt. ISPs have already attempted to use these technologies to discriminate based on content. It was DPI that enabled Comcast, in 2007, to identify peer-to-peer uploads in order to terminate them. Although the FCC subsequently found that Comcast’s actions violated a 2005 FCC Policy Statement, Comcast successfully challenged that determination in court. In a recent decision, the federal appeals court for the District of Columbia sided with Comcast, on the ground that under the FCC’s current regulatory framework, it lacks authority to prevent ISPs from engaging in this type of discrimination.

Under the Bush administration, the FCC adopted a policy framework that declared broadband service to be a loosely regulated "data" service rather than a more fully regulated "telecommunications" service. It can and should change that framework by acknowledging what's obvious to anyone who uses the Internet: The broadband Internet is today's primary telecommunications network, and needs to be overseen as such.

As Scott Holladay, the report's co-author and an economist and fellow at the NYU institute, puts it,  “Internet Service Providers like Verizon and Time Warner hope the government will fail to act — potentially boosting their bottom line at the expense of users. Doing nothing could have irreversible effects on the nature of the Web and might come with harmful economic outcomes for the majority of Internet users. We have a system that works and it should be protected.”