The Principle of Net Neutrality: Arguments and Recent Developments

The principle of Net neutrality refers to the idea that data packets on the Internet should be moved impartially, without regard to content, destination or source.  In essence, it means that all Internet traffic should be treated equally and implies that an information network such as the Internet is most efficient and useful to the public when it is attentive to multiple users instead of focusing on a particular audience.  This post outlines some key arguments both for and against net neutrality and provides an overview of recent developments in Italy, the United States and Canada.

Proponents of net neutrality, such as Lawrence Lessig and Robert McChesney, argue that the end-to-end-principle, which states that communications protocol operations should be defined to occur at the end-points of a communications system, naturally leads to a dumb network, where all intelligence and control is held by producers and users, not the networks that connect them.  They argue that not upholding the principle of net neutrality would allow Internet service providers to control what content users can access online.  Further, proponents argue that allowing broadband carriers to provide preferential treatment to certain customers would put smaller companies at a competitive disadvantage.  According to Lessig and McChesney:

“Most of the great innovators in the history of the Internet started out in their garages with great ideas and little capital. This is no accident. Network neutrality protections minimized control by the network owners, maximized competition and invited outsiders in to innovate. Net neutrality guaranteed a free and competitive market for Internet content. The benefits are extraordinary and undeniable.”

However, opponents of net neutrality, such as Bob Kahn and David Faber, believe that net neutrality will stifle innovation.  Specifically, they argue that prioritization of bandwidth is required for future innovation since the additional revenue from tiered services can be invested in broadband development.  Without a preferential system, opponents argue that Internet service providers would have a reduced incentive to develop better services because it would be more difficult for them to recover their investments.  As a consequence of reduced innovation, Andrew Coburn argues that there is increased potential for massive online crashes: “[a] massive increase in traffic that resulted in overloads of router buffers and caused localised and progressive failure through the network is one of our major concerns.  Packet loss leads to degradation of service, increased waiting times and reduces reliability to the point of unusability.”

Italy, and the United States have reacted in response to the arguments raised by proponents and opponents of net neutrality.  In Italy, Senators Vincenzo Vita and Luigi Vimercati proposed a bill in March 2009 that aims to provide neutral access to the Internet, make access conditions transparent and to spread the use of new communication technologies.  It is not known when the bill will be voted on by Italy’s parliament.  In the United States, the Federal Communications Commission (“FCC”) has exercised its jurisdiction over the issue.  On August 1, 2008, the FCC ruled that Comcast had illegally prevented users from using file-sharing applications.  Further, FCC Chairman Kevin Martin stated that the following four principles were adopted to protect consumers:

“(1) Consumers are entitled to access the lawful Internet content of their choice; (2) Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement; (3) Consumers are entitled to connect their choice of legal devices that do not harm the network; and (4) Consumers are entitled to competition among network providers, application and service providers, and content providers.”

Thus, it appears that Germany and the United States have begun to support the principle of net neutrality.  In Canada, the New Democratic Party has strongly supported net neutrality.  In fact, Member of Parliament (“MP”) Charlie Angus has raised the issue on numerous occasions before the House of Commons.  Furthermore, on June 18, 2009, federal Liberal Party MP Marc Garneau stated that “the Liberal Party supports the principles of net neutrality and an open and competitive Internet environment.  Internet management should be neutral and not be permitted for anti-competitive behaviour nor should it target certain websites, users, providers or legitimate software applications. We must protect the openness and freedom of the Internet, and maintain competition to spur innovation, improve service levels and reduce costs to users.”  However, the Conservative Party of Canada remains non-committal on the issue, arguing that free market competition is preferable to regulation.