Net neutrality is more complicated than you think

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Net neutrality is a concept surrounded by much debate, with a storied past and murky future. On the heels of Comcast Corporation’s recent $45 billion bid to purchase Time Warner Cable—a move posing arguable threat to net neutrality as we know it—I was struck with a renewed drive to understand the debate surrounding open access to internet. This thing is huge, and far-reaching, and has much more complicated implications than many of us realize.

To help break down net neutrality and its complexities, I talked with three professors at the University of Michigan-Flint: Marcus Paroske, associate professor and director of Communication & Visual Arts; Sy Banerjee, assistant professor of marketing in the School of Management; and Adam Lutzker, associate professor of economics and director of the Master in Social Science program. Our conversations seemed to boil down to a few essential questions.

Does limiting the use of the internet stifle market competition or innovation?

Does a lack of open and neutral access to internet equate to or lead to censorship?

Is equal opportunity to content through an internet connection a basic human right?

What follows is a series of excerpts from each faculty member. These quotes are not taken from a single conversation, but have been curated to offer varied perspectives on each point.

Does limiting the use of the internet stifle marketing competition or innovation?

From the point of view of an economist, I think the [key] of thinking about the internet is to think of it as communications infrastructure and that it’s then similar to earlier transportation structure like railroads and highways, and also electricity. The key feature of building infrastructure is that they’re very expensive to build… and then very cheap to use. The consequence of that is that it’s very hard to have competitive markets in those things. You tend to have monopolies or oligopolies, so lots of different people build it, lots of different people are relatively small firms, but over time the big firms drive out the small firms and so you have concentration in the industry. And so competition tends not to work that well because of these monopoly tendencies. Historically the government has regulated these industries to ensure that consumers get access to products, to stop them from price gouging, and to keep the firms in the industry from doing unfair practices to potential competitors.
Adam Lutzker

What the carriers are suggesting is that they would like to charge content providers. So if Netflix is streaming movies for me as an end user, they would like to charge more to Netflix to be able to access and address all the maintenance issues required for the huge volume of business they are giving them. Because as of today, there is really no separate charge for access or toll on the infrastructure where the data is being transmitted. [T]his raises a concern about what happens if Netflix is made to pay extra for it because Netflix is, in that case, going to pass on the cost to the consumer.
Sy Banerjee

Firms will want to have right to make profits off what types of resources they have proprietary control over and so traditionally we’ve wanted there to be separate sectors. We’ve wanted the people providing the infrastructure to be different from the people providing the content so that customers get neutrality of access to the content. Over the last five years or so there’ve been mergers in the sector which have let … companies that are providing infrastructure be companies that are also providing content, and they want to give preferential access to their own content.
Adam Lutzker

This is not just about the U.S. Other countries are also going to follow suit and a lot of influence will be derived from the way the U.S. moves its market, as to what extent it gives freedom to the businesses versus freedom to the policy body and other players. …One of the things to think about is if you are small-time business owner, or a person who is doing some business out of home to generate some income, with the implication of net neutrality going away it could mean that your cost for access, your cost for providing services, data transmission will go up. And that could have some impact on grassroot-level innovation from a business perspective. At the same time, if net neutrality were to be imposed, one of the things that would happen because of the lack of ability to differentiate services according to customers, the industry would lose out on a lot of innovation. So that would become a cost to pay for all equal access.
Sy Banerjee

Does a lack of open and neutral access to internet equate to or lead to censorship?

I think the most important aspect of the net neutrality debate is for us as citizens, and our students in particular as the future leaders, to try and determine what kind of good or what kind of service the internet really is. If the internet is sort of the underpinning of democracy 2.0—and we see the movements of this in countries like the Ukraine or Egypt where people are using social media to do major social mobilization and execute social change—that if the internet is something fundamental to what it’s going to mean to be an American in the future to have access to that information, then a principle like net neutrality makes sense. In the same way that we don’t allow telephone companies to restrict who gets access to a phone line or radio stations to restrict who gets access to the radio—we oftentimes make analogies between communication and transportation. It’s the same thing. It’s things moving across, and whether you’re allowed to do that freely or not is one of the underpinnings of what makes a free society.
Marcus Paroske

What we teach the students is [that], for being a marketer, the very foundation of your conscience is to understand the consumers’ needs and it is to understand different needs for different people. So the very foundation of our principles [rely] on a certain extent of differentiation. When does that differentiation become discrimination? We can’t really say. …That’s the source of the controversy, because in order to best understand the needs of your customers and serve those needs, you will have to engage in differentiation. That differentiation is going to drive innovation. The problem is it means that certain sources can get choked. Certain lines can get clogged. Certain parties might be less satisfied than they are now. This is really a debate between regulation and the free market.
Sy Banerjee

Is equal opportunity to content through an internet connection a basic human right?

Is [the internet] something that everyone should have equal access to? Or is it a different kind of commodity? Is it like a book, where everyone has the right to own books but no one has the right to have every book for free? …Right now the United States government treats the internet not as an open access common carrier approach, but as a more commodified thing that companies are allowed to take profits from. That’s the debate we’re having legally, it’s the debate we’re having morally, and that’s the sort of thing that we as citizens, we as students, we as scholars should put some thought into as we move forward and make public policy moving forward.
Marcus Paroske

Essentially net neutrality is the extent of control internet stakeholders have over delivering traffic to their end users. There was a common carrier principle, which applied, which essentially all this stemmed from… [and] what the common carrier principle really talked about was If you were providing service in a certain area which was fundamental to a person’s existence—the definition of fundamental is up in the air there—and if you were using public infrastructure for providing that service, then you would have to provide equal access to everyone.
Sy Banerjee

There are a lot of things that we think about net neutrality or the absence thereof that [are] assumptions. For example, today if I cannot access the internet, do I lose my connection with the outside world? No. I have access to a landline telephone. I have access to a car. There are roads to drive the car on. And there is power to keep my phone running. These four assumptions are very basic for an average person in the U.S., so even if my internet connection goes off, it’s not like I lose my connection to the rest of the world. These assumptions don’t necessarily suffice for a lot of developing countries around the world, so for a lot of populations, the internet may be the only source of connectivity to the outside world. …In such situations—often it has happened in [countries] even like India—there have been special interest groups who are conservative or who benefit from suffocating marginalized communities’ voices of expression, and they have used the absence of net neutrality to kind of choke access, block traffic, from select geographical regions, from selected kinds of users. And they have even used the net selectively to promote ethnic hatred. In a situation like that, our decision making completely changes, and we realize that one of the [ways] that the free market, or the absence of Net Neutrality, can be sustained is if we have a very strong, sophisticated regulatory framework… one that has enough power not to be corrupt, and not subject to influence by special interest groups that could have political or social standings.
Sy Banerjee

As of this week, Comcast’s purchase of Time Warner has not been approved by the Justice Department, and is also being reviewed by the Federal Communications Commission (FCC) and a group of state attorneys general. Meanwhile, the FCC is still working through net neutrality and open internet rules, data providers are claiming that ending net neutrality will lead to lower consumer costs, and companies like Netflix are being denied free access to internet providers’ networks. This debate is nowhere near resolution.

Net neutrality cannot be categorized as a tech, political, social, economic, or ethics problem. The debate is not merely two-sided, but has so, so many sides. There will never be a clear-cut solution, but what should be clear is this: Net neutrality impacts us all. Want to learn more? Even in the absence of interview-ready faculty, we all (at least for now) have access to an open and informative internet. What considerations would you add to the conversation?

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