The FCC, led by Commissioner and Verizon puppet Ajit Pai, passed a landmark decision today to repeal the rules enforcing Net Neutrality. The repeal will remove the classification of internet service providers (ISPs) as telecommunication companies under Title II. This classification, which ISPs were placed under in 2015 by Barack Obama, essentially categorized ISPs as utilities, a categorization that that means access to the product is a right and not privilege and furthermore means that companies are restricted from denying service or price gouging. The repeal of these rules will allow internet providers to freely control access and internet speeds depending on the customer and the content.
Pai hailed these regulatory roll backs as a means to return the internet back to the “free market consensus.” The implication of this is that a return to the open and free market would stimulate innovation and competition. Furthermore, as Pai would argue, the internet was working fine before 2015, so why the unnecessary regulation that puts undue cost and constraint on corporations?
The obviously fallacious assumptions in this argument are, first, that the market is free and open, and second, that said market will stay static, i.e. the same as it did up to 2015. First, the internet is very much not a free market. One study found that 50 million households only had one high-speed internet provider or none at all. Anyone that’s taken introductory economics will tell you that monopolies drive down innovation and competitiveness, as evidenced by the United States having some of the slowest internet speeds of industrialized nations.
The second fallacious argument brings me to the titular analogy: the airline industry and its much despised extra fees. The airline industry is similarly and notoriously un-competitive with major consolidations occurring over the past ten years. In fact, 4 airlines now carry 85% of all the nation’s passengers. In 2008, with oil prices soaring, the recession decreasing demand, and profits shrinking, airlines turned to charging checked luggage as a means to mitigate losses. The result? Billions and billions of dollars in profits that continued well after oil prices dropped, the economy turned around, and traditional means of revenue returned. Think of the internet of 2015 as the airline industry of 2008. Major carriers could have charged money for checked baggage before then, they just hadn’t done so yet.
Now imagine a world where consumers are charged for the proverbial checked internet bag or priority website boarding. Would you like to use that website that competes with a multi-billion dollar corporation that we’re in partnership with? To paraphrase Goodfellas, “screw you, pay me.” Want to visit the adult website that your ISP provider has a moral objection to? Screw you, pay me. Netflix, wanna stream to your customers at an adequate speed? Screw you, pay me (this one actually already happened, and customers just paid for it). Would you like to use our own platform to watch our subsidiary’s product? Here you go, no extra charge. That is the internet without net neutrality: the frustrating nickel-and-dime airline industry brought right to your computer screen. Just ask Portugal. Think this will inspire innovation and competition? Please think of the ever-shrinking airline seats and less-than-wonderful customer service as evidence that it’s not imperative.
The internet was widely understood to flourish under net neutrality, even if there wasn’t a law in place to protect it, and ensuring that net neutrality continues would protect that fertile environment while internet experts proclaimed repealing it would have “dangerous consequences, including stifling future innovation and depressing future investment in the wealth of Internet services that drive such a large part of the U.S. economy.” Because of a true lack of competition in the ISP market, we should expect the repeal of net neutrality to drive prices up, services down, and innovation to stagnate not only in the internet provider market, but also for businesses reliant on equal accessibility to web traffic as they are crowded out by the established market leaders with more resources to pay for premium speeds.
But sure, you can still buy fidget spinners.