On Thursday, the Federal Communications Commission (FCC) will vote to end net neutrality as we know it. This ruling will have a disastrous effect on consumers and small businesses, as well as stifle innovation.
By ending the present net neutrality rules, internet service providers (ISPs) will be legally permitted to block or slow down content of companies using their services. They will be in a position to give priority and charge higher fees to companies they prefer, and to choose who will pay higher fees.
Comcast President and CEO David Watson said the fear of ISPs blocking or throttling content is unfounded. According to Watson, Comcast "does not block, throttle or discriminate against lawful content."
Historically that is not accurate.
In late 2013 and early 2014, prior to net neutrality becoming the law of the land, Comcast dramatically reduced the download speed for Netflix while it was negotiating with Netflix about rates. (Slowing download speeds by even a few milliseconds causes consumers to abandon a website.) However, as soon as Netflix agreed to pay higher rates, its download speed increased.
And it is not just Comcast. AT&T blocked Skype from iPhones until 2009, and Verizon blocked Google Wallet in 2011.
Entrepreneurs, innovators and small businesses will all be hurt if they are compelled to pay higher prices for greater internet speed. According to David Levine, president of the American Sustainable Business Council, "Net neutrality fuels business competition. Without net neutrality, we lose the free market aspects of the Internet. That's what enabled the explosive innovation and growth of the technology and media industries. The decision to end net neutrality is not just against the public interest, but against the interests of entrepreneurs – the engine of our economy."
In addition, ISPs are increasingly getting involved in content. Comcast, for example owns NBC Universal and the USA Network, as well as other content providers. AT&T, if its merger with Time Warner goes through, will own HBO, WB, CNN, Cinemax, TNT and other content providers. When the net neutrality rules are changed, these ISPs will have nothing to stop them from legally being able to discriminate against their competitors by blocking, slowing down their service or charging them higher prices for service.
Consumers can well expect that higher fees for content providers will lead to higher prices for consumers. Consumers will also have fewer content choices. In addition, with little competition among broadband ISPs throughout the country, they have little incentive to either have competitive prices or greater service.
When, not if, the FCC votes to end net neutrality, Congress could act through a resolution of disapproval to overrule the FCC's action. It could also embody net neutrality into statutory law and take it out of the limbo of regulatory rules, which can be changed readily when presidential administrations change. It is also possible that the courts could get involved and rule that the actions of the FCC in changing net neutrality were improperly done in an arbitrary and capricious manner. The likelihood of any of these actions at this time does not look great.
The American people have indicated in polls and in legitimate communications to the FCC that they strongly favor net neutrality. The FCC, however, has indicated that it favors big business.
Steven Weisman is a senior lecturer in law, taxation and financial planning at Bentley University. He also serves as legal editor for Talkers Magazine and co-hosts a nationally syndicated radio show.
