What's really going on
And so, as a small exercise in sanity, here is a quick guide to what is really going on and why it matters – but not so much that everyone needs to lose their minds over it.
- For a long time, rich and powerful cable and telco companies have exerted a strong degree of control over Americans' content consumption. They have made a lot of money from it. But they have also brought Americans hundreds of TV channels and other content.
- The internet has disrupted that business model because you are able to get hold of video and voice using the same system you use for email and web surfing.
- Big Cable has seen companies like Facebook and Google grow enormously and start eating away their access to Americans – and with it the extremely profitable advertising market.
- They don't like that. And they especially don't like the fact that those companies out-maneuvered them during the Obama administration and got a very internet-industry-friendly set of rules passed at the FCC.
- Big Cable and Big Wireless tried throttling services, such as AT&T strangling video apps like Facetime citing bandwidth concerns, eventually relaxing the restrictions. It all came to a head when, during the Obama era in 2014, Verizon, upset it couldn't prioritize its own traffic over competing services, went to court and wrecked the FCC's attempts to enforce an open and fair internet. In response, in 2015, the US regulator formally approved its net neutrality rules: ISPs were effectively labeled public utilities, and just like every citizen should the same electricity and water supplies, everyone in America should get the same internet traffic equally and fairly.
- As a result, the cable companies have used their long-term political contacts and lobbying budgets to try to reverse those new rules, and stop internet giants, such as Netflix and Apple and Amazon, from becoming the new cable industry in terms of power and profit. As such, today's FCC, under Republican control, will vote to repeal the network neutrality safeguards in December this year.
It's a battle between big business. With current net neutrality rules, Google and Facebook have the edge. If those rules are rescinded, Big Cable has the edge.
Now the truth is that if the FCC does remove the current rules and if they aren't reverted under the next administration, there will be a knock-on impact. We will end up continuing to pay cable companies a premium because of their ability to control access – just as Americans have for decades.
It may also be harder for a new Facebook or a new Google or Netflix to start up. But the truth is that internet industry consolidation and control has already happened. It is already dominated by the big boys.
It's all well and good decrying the fact that a plucky new startup won't be able to get past Comcast without paying a fee, but let's not ignore that fact that the internet companies already pose a far larger barrier.
Just try starting a new social media company or search engine and see how far you get. Snapchat's most popular features were copied by Facebook within months. Microsoft is still one of the world's largest companies: how's Bing doing these days? And god help you if you advocate for legislation against Big Internet.
Let's also stop pretending that life under Big Cable is going to be a dystopian nightmare – that we'll only get to see Fox Internet or AT&T Internet. It will almost certainly be a professional and perfectly pleasant environment – similar to the world of cable that everyone grew up with.
Does that mean that it's right? No. There is something nauseating about seeing how the levers of power are pulled by rich corporations. And, of course, it is hard not to hate cable companies with their ridiculous rates and constant con-jobs where you agree to pay $50 a month and somehow end up forking out $80 a month just six months later.
Cable companies run an oligopoly. And as a result there is little driving real innovation – hence the clunky cable boxes that you are forced to "rent" at vastly inflated prices. They have also ended up indirectly controlling content, usually for the worse. And of course internet speeds are much slower in the US and cost far more than comparable countries.
Win or lose
For all these reasons, it would be better if Big Cable lost this net neutrality fight, if only to shake things up and help the tectonic plates of progress move. And it likely will still lose unless the cable industry is prepared to radically change its approach. It can't rely on an FCC chairman as industry friendly as Ajit Pai forever.
A quick history review: it took some time for AT&T to be stripped of its control of the phone market and "Ma Bell" to be turned into "Baby Bells."
It was the FCC that first started digging into AT&T's control of the market back in the early 1970s and how it was using its monopoly profits to subsidize costs. In 1974, the Department of Justice filed an antitrust lawsuit. But it wasn't until 1984 – ten years later – that AT&T was broken up. And that plan was put forward by AT&T itself after it became clear the writing was on the wall.
In other words, as unpleasant as it is to see the FCC acting against the prevailing mood, and support the old powers rather than the new powers, this is simply how things work when very large, rich and powerful companies have their profits threatened.
If people are genuinely in favor of making sure that history bends faster in the correct direction, it might be helpful to reflect on history and put more effort into winning the argument rationally rather than screaming in people's faces.
Because the more the issue of net neutrality falls into a partisan ravine, the harder it will be to climb out in future. ®