How Net Neutrality will Fare under Trump

With news this week about the nomination of Ajit Pai as the next chair of the FCC, much of the attention has focused on his stance on net neutrality and the likelihood the existing rules on net neutrality will be dismantled. However, net neutrality is a complex topic; even the definition of net neutrality is subject to widely differing interpretations. It’s worth breaking down exactly what’s likely to change and what isn’t at a Pai FCC.

Defining Net Neutrality

The first challenge here is defining net neutrality. A very general definition would be it refers to treating all internet traffic equally. It sometimes seems as if some people really do believe net neutrality can only merit the name if it’s really that broad. But that would preclude any sort of network prioritization which puts time sensitive packets above non-time sensitive packets and would also preclude any sort of prioritization by user or content at times of congestion on the network. Most reasonable people seem to at least leave some leeway for sensible network management in order to improve the performance of services subject to delays, such as voice and video calling or live video streaming.

Beyond that, the consensus breaks down very quickly. There are some who insist net neutrality has to bar any and all prioritization or differential charging by content or by user on any basis, whether or not it’s transparent, available to all, or paid for. The best example is the programs introduced over the past couple of years by major wireless carriers, under which some or all content in a particular category is carried without counting against the user’s data plan. T-Mobile and AT&T are the most high profile examples. T-Mobile has two programs – BingeOn and Music Freedom – which “zero rate” video and music content respectively. These programs are essentially open to all comers from a content perspective and there’s no charge to participate. AT&T has recently exempted video from its subsidiary DirecTV from its data caps and says this reflects an internal transfer from the DirecTV division to the AT&T Mobility division in an arrangement also open to any other video provider under the company’s Sponsored Data program.

How you define net neutrality will determine how you see each of these programs. Strict advocates reject both T-Mobile’s programs and AT&T’s, while some others find T-Mobile’s program acceptable but not AT&T’s or Verizon’s. The FCC has never taken a final position on either program but did begin looking into AT&T’s towards the end of last year. The net neutrality rules as presently constituted, however, don’t explicitly bar zero rating programs. Whether you consider either or both of these programs in breach of the principles of net neutrality will determine to what extent you think the new FCC regime will dismantle net neutrality, as I’ll show in a moment.

Rules vs. Motivated Behavior

It’s also worth noting that net neutrality rules were contemplated for many years but only implemented successfully recently. In the time before the rules were finally introduced, there were very few violations of its principles regardless – literally less than a handful of prominent cases existed during that time. The reason is, broadband providers are highly motivated to stay away from controversial breaches of net neutrality principles because they know that such actions would be extremely unpopular with consumers and would invite additional regulatory scrutiny. If we’re talking about actively blocking or degrading any form of content simply because it competes with the carrier’s own content (rather than because it is illegal or against the carrier’s terms of service), that remains very unlikely because there would be an outcry and a backlash and, ultimately, severe financial consequences in terms of lost business if the situation continued.

Net neutrality rules as presently constituted largely lock this behavior in place but the carriers have always made clear they object to the rules largely because they represent additional regulatory encroachments on their freedom to operate rather than because they contemplate any particular action that would contravene them. However, it is clear carriers have other, softer, forms of prioritization and differential treatment in mind, as we’ve seen from the zero rating plans I mentioned earlier. Regulation might or might not bar those zero rating programs but it’s relatively unlikely carriers would ever stoop to systematically blocking or degrading traffic from competing services even in the absence of regulation. Carriers have mostly been willing only to engage in behavior seen as either neutral or beneficial by users. They have much less concern about how they’re perceived by content providers. As such, they’ll zero rate some or all video content because users respond positively to that, regardless of whether providers of other content services like the idea or not. Net neutrality regulation, therefore, mostly helps protect content providers rather than end users, at least in the short term.

Dismantling Net Neutrality

With all that as context, let’s look at what might actually happen in the real world if net neutrality regulations as currently constituted were eliminated. Here are my predictions for what we’d actually see as a result:

  • Carriers wouldn’t suddenly (or even eventually) start engaging in discriminatory prioritization or blocking of traffic based on the source – as I’ve said, users would respond badly and even an FCC largely opposed to additional regulation would have to step in and act if this became widespread
  • Carriers likely would continue to pursue zero rating programs as a way to both differentiate from competitors and to make their own content services more attractive in some cases (as AT&T and Verizon have already done). With the growth of unlimited data services among the major wireless carriers, this actually wouldn’t have a massive effect on the market
  • Some broadband providers are actually bound by terms of merger approvals to abide by fairly strict net neutrality principles regardless of general regulations, with Comcast the prime example through 2018. As such, these companies would have to continue to abide by the rules whether or not they’re overturned, at least for the duration of the commitments they’ve made. AT&T might well be subject to some similar rules as a condition of the approval of its acquisition of Time Warner, putting the two largest broadband providers and the second largest wireless provider under net neutrality restraints

In short, we’re unlikely to see an apocalyptic end to the internet as we know it, even if the FCC begins taking apart the present net neutrality regulations. We will likely see more zero rating and similar programs which don’t prioritize or degrade traffic but merely apply different data pricing to it. If you object to that kind of thing as a breach of net neutrality, you’re likely to be upset but most consumers will be either blissfully unaware or happy about it. If you’re a content provider, you may feel hard done by here too but, again, under the increasingly prevalent unlimited wireless data plans, this will become less of a disadvantage over time. I, for one, am less pessimistic about the outcomes here than many of those decrying the changes on the horizon.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

9 thoughts on “How Net Neutrality will Fare under Trump”

  1. Much of the entertainment industry, I have learned to never underestimate the drive for people and companies to under serve and over charge, no matter the complaints of the customers, especially by the gate keepers in a monopoly market.


  2. That this is even up for debate is highly concerning:

    -The US taxpayer paid for the invention of the internet. Period. A bit is a bit.
    -Bit prioritization only matters when there are bottlenecks. Keeping all bits equal serves as motive for progress. Artificial prioritization only serves as an opportunity to gouge and control. Which brings me to…
    -Will “alternate facts” be prioritized over “facts”. Yes, my constant whine…Censorship!

  3. Mmmmm… you seem to be overlooking that Sponsored Data, Binge On, Music Freedom et al. have significant costs *on the supply side*:
    – in monetary terms: “Sponsored Data is an AT&T service that enables companies to sponsor the data usage for specific content on behalf of eligible AT&T wireless customers.”
    – in compliance/technical terms: there’s a fair bit of ATT-specific work involved in distributing Sponsored data
    – maybe in commercial terms. I couldn’t find any guidelines about whether ATT curates or not. Didn’t see any porn providers.

    Net neutrality is not simply about the consumer not paying more (in the case of Binge On, they “pay” in the form of inferior video quality, too). It’s about the whole chain being as blind as Justice about where the packets come from, where they go to, and what they are.

    I understand exceptions can/should be made, say for real-time traffic (voice, vidconf) or priority traffic (emergency services…). But that’s also a slippery slope:
    – when networks are congested and service degrades, it becomes an extra fee to be able to use the service normally
    – who decides whether a pro gamer online 10k fight is more important than the weekly Skype session with granma ? But what is the Skype session is a suicidal breakup chat ?

    It’s because of that Pandora box of issues that net neutrality is probably the least bad solution. Carriers hate it because it puts the onus back on them to deliver on their promises (unlimited, bandwidth, latency…) and they keep glimpsing all the riches that can be had only by making the suppliers pay for their content, and getting users to downgrade its quality. That’s the sad part about being a utility. My electricity company doesn’t charge more for juice depending on provenance, use, and I can sue them if the quality/reliability isn’t up to par.

    1. I’m not ignoring any of those things – in fact, I mentioned that AT&T is using the same Sponsored Data structure as is available to anyone else, which, as you point out, is a paid product. I haven’t seen any evidence about AT&T “curating” content for Sponsored Data..

      Your biggest false assumption (and the biggest flaw for all strict NN proponents) is that it’s possible to provide unlimited bandwidth and that if carriers did so, that would solve all the problems. The reality is that Internet technologies are designed to fill whatever the available bandwidth is across every link in the network, such that expanding the bandwidth available merely pushes more non-real time traffic through until the pipe is full again.

      To your point about quality – those programs are opt in and transparent to the user. If you want full-quality video you can have it.

      1. ???? nobody is buying, selling, nor advocating unlimited bandwidth. That’s the one thing that’s clear, every ISP, carrier…quotes maximum download and upload speeds. Unlimited bandwidth is technically impossible.
        I, and I think most NN proponents, are even OK with with one-off bandwidth issues… spikes happen.
        What’s not OK is a) selling unrealistic endpoint bandwidth, ie promise a speed that’s only achievable in a lab in perfect conditions b) wildly overselling the backbone, so that even if the last-mile bandwidth is within reasonable values, it gets slowed down at the next step, by congestion between the local tower/exchange and the backbone, or somewhere further down the backbone; that’s similar to airlines’ overbooking.

        Which circles back to the opt-in issue. Netflix says 5GB/hr @ 5 Mbps is needed for FHD, about quadruple that for 4K. If the contracts include speeds and caps that don’t permit streaming a reasonable amount of movies, or if the network provides actual speeds that don’t allow for it, the issue is with the contracts and network. Trying to add extra costs on the supplier side or to downgrade quality = save on bandwidth on the sly is a weasely band-aid, and not really opt-in but forced. Tmob does clearly say Binge On is about downgrading quality to less-than-SD 480p, but they don’t clearly say how much compression is applied to that.

        And finally, the issue with ATT’s Sponsored Data and Tmob’s media downgrades is that there are about 10,000 ISPs and 1,000 Mobile carriers worldwide, and a least a few hundreds content providers. Each of those 100s of providers having to implement + support each of those 1,000s of ISP/Carrier’s proprietary data-double-dipping+throttling programs sounds like a crazy expensive, complicated, and in the end unworkable proposition.

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