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View from Washington: Why net neutrality matters

It's tempting to see the US controversy over net neutrality as its own problem. Far from it. It hurts all of us.

Many people see the growing US controversy over net neutrality as an overwhelmingly domestic issue.

Er, hold my beer.

There are good reasons why corporate UK players in the Internet economy are already concerned. But beyond that, the topic raises issues you could well have to consider after Brexit.

For those of you unfamiliar with this kerfuffle (and - Mogadon moment - it is regulatory stuff), let’s start with the concept.

Net neutrality is a legal requirement under which ISPs must treat all traffic on their networks equally. So, notwithstanding what boosts an internet service might seek through webhosting or other choices, once it goes on an ISP’s network, it must receive the same quality of delivery whether it is Facebook or your local cupcake cornucopia.

Earlier this month, Ajit Pai, President Trump’s pick as chairman of the Federal Communications Commission, confirmed that he favours rolling back net neutrality in US federal law and will put the issue to a vote of his fellow commissioners in mid-December. The concept was reaffirmed as recently as 2015 by the Obama administration, but Trump promised to do away with the rule during his campaign (there’s a separate pattern here, but let’s leave it for another column).

The vote is expected to pass.

The fear is that abandoning net neutrality will create a two-speed Internet. Critics say that ISPs will be able to sell or auction ‘preferential’ delivery packages. Or where they have their own products, they will be able to slow or block rivals.

Such fears are not unfounded. In one controversial move, cellular ISPs once tried to block Google Wallet from their networks at a time when they were launching their own e-wallet. They failed that time out, but it is one of a number of instances that undermine the ISPs’ claim that they would not do the same in future (you’ll need to read to the end to find out why they did fail via a cheeky link).

This rollback doesn’t sound like a good idea. More than 22 million US citizens and companies participated in the latest FCC consultation on net neutrality, most supporting the status quo.

Why should anyone elsewhere care?

For a start, the US represents the world’s third-biggest Internet user base behind China and India. Foreign tech companies consider it a crucial territory because of its higher disposable income. It’s where you make a big chunk of your money.

To cite three UK examples, the websites of both The Guardian and The Daily Mail consistently hover around the US Top 100 ranking, according to Alexa, while fashion retailer ASOS is a Top 500 player across the pond, whence it derives 15 per cent of its traffic.

The threat is easily stated. User website exits start getting damagingly high after just a four-second delay in loading, but particularly when a competitor is faster. They then ramp sharply as any delay grows. Hobbling alone hurts: you need those views to generate ad revenue, make sales or, yes, chomp down on some Big Data.

Then there are worries about the rollback’s consequences for innovation. Net neutrality has historically made it easier for both new ideas and disrupters of existing ones to reach web users. As the internet matures, this is already getting harder. There are issues of infrastructure and promotional costs. Net neutrality does seem to throw another obstacle in the way of start-ups.

Here, the fact that the proposal affects the US is compounded by the fact that the biggest prize, China, already sets a high bar for overseas entrants there courtesy of its ownership laws for foreign joint ventures and the associated caprices of The Great Firewall.

Moreover, from personal experience, let me assure you that a business plan for an English-language web venture that does not include the US will raise eyebrows, wherever you are based. I'd bet most western non-English-language developers get the same reaction.

At this point, let’s note that one argument made supporting the rollback by supporters is that net neutrality depresses capital spending on networks. Given the forecast growth in video traffic and, perhaps more important, Internet of Things-related demand for such vital things as healthcare, this sounds potentially persuasive.

However, the ISPs’ CEOs have been openly dismissive of this when quizzed by Wall Street on results calls. You can see why. No executive puts a ‘sell’ order on his company: “Yes, my strategy is to **** off my customers.”

TechCrunch has also served up an excellent debunking of the other main net neutrality objections.

Let’s get back to our parochial set of issues.

Perhaps you consider yourself outside the Internet economy. Really? Is anyone? OK, good luck with that. Still, perhaps then you consider yourself behind the front lines. Why care?

As a Brit at least, remember this. Today, the UK enjoys effective net neutrality as a consequence of the 2015 EU Regulation on Open Internet Access. Upon Brexit, this will initially be adopted into UK law through the The Great Repeal Bill.

After that – and very soon – UK ISPs could start their own lobbying over “unnecessary”, “outdated”, “investment-crushing” net neutrality. Now given the deregulatory enthusiasm of some of those in the current government and, of course, the incredibly fine job done by the country’s unimpeachable ISPs, well... Maybe this topic needs bookmarking.

Or put it this way. Don’t you dare complain to me if Stranger Things soon starts spinning the Wheel of Wait.

Meanwhile, for reading today’s screed, here’s a pressie. Expat British comedian/commentator John Oliver offered his own demolition of the anti-net neutrality argument on his HBO show Last Week Tonight. And it’s wonderful. But please note that it is definitely NSFW.

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