End of a free and open internet? The global implications of repealing US net neutrality

09 January 2018

As the US moves a step closer to calling time on the rules protecting net neutrality, our Digital Advocacy Manager Renate Samson explains why this controversial decision may have consequences for consumers globally.

Last week saw US Federal Communications Commission (FCC) issue the final text of the order to undo net neutrality rules established in 2015. The order puts an end to net neutrality laws in the USA which many believe will mean the end of the free and open internet for users in the US.

The controversial move has sparked consternation across the US (including from Consumers International’s US member Consumer Reports) and is likely to face several legal challenges.

But what impact could the FCC’s ruling have on US consumers and more broadly on consumers in the rest of the world? To understand the implications of the decision let’s start with what an explanation of what net neutrality means.

What is net neutrality?

Under the principle of net neutrality, Internet Service Providers (ISPs) are required to handle every internet user’s data in the same way. No individual or company is to be offered or receive preferential treatment. Every website and service gets the same internet speed and quality.

So, whether it’s a media company that is streaming programmes to viewers, or a gamer downloading a new add-on, the cost and quality is the same. In the same way as utilities like telecoms or electricity are regulated as ‘common carriers’ or ‘public carriers’ by providing services to consumers without differentiating or dictating what it is used for.

What could happen without rules to protect net neutrality?

Without net neutrality rules in place for internet service providers however, ISPs will have the freedom to decide how they provide services. Taking the example of streaming services, important in the US where 46 per cent of consumers are subscribers, a video streaming channel provided by one service provider could be purposefully slowed down to inhibit the viewing experience in order to encourage you to use an alternative service preferred by your ISP.

There is a risk that ISPs will offer options that benefit them, but not the user. For instance, the ISPs could, if they chose, create a ‘two tier’ system, providing a fast service for providers that can pay and a slower system for those that can’t. Such a move would create fast and slow lanes whereby providers who can afford to pay, will be able to provide services through a fast and open internet, whilst those who are unable or unwilling to pay, will use a free but grindingly slow and restricted internet.  

This could result in a noticeable restriction on the ability of consumers to seek out alternatives to the big companies. If ISPs are given the right to charge businesses for the bandwidth they use, smaller companies or internet start-ups are likely to be frozen out due to financial constraints whilst the big companies who can afford to be “prioritised” will continue to dominate the market place. It is also worth bearing in mind that the competition for space online could lead to rising costs for the companies, making it highly likely this will be passed on to the consumer.

Alongside cost and quality issues, are serious concerns about what the loss of a free and open internet means for inclusion and diversity. Non-discriminatory access principles benefit the creators and consumers of non-mainstream, specialist or culturally specific content which has flourished since the internet become widely available. But it’s not just about news and entertainment. The internet provides access to essential public services, to education, to banking, communication and shopping. It gives people as both citizens and consumers a voice. Any decisions that increase the cost, or lower the quality of the internet would impact those on lower incomes hardest.

Are there any protections in the new law?

The new order attempts to put some checks and balances in place. For example, ISPs will be required to be transparent about what their net neutrality practices are and the US Federal Trade Commission (FTC) will be given oversight over the ISPs. However, this is pending a court case and even if the case is decided that the FTC has oversight of ISPs, the FTC will only be able to regulate the ISPs through case-by-case enforcement, thereby leaving consumers less protected and ISPs with little guidance.

Supporters claim the FTC’s oversight or reputational damage and loss of consumer trust will be strong enough to restrict the ISPs from overstepping the law. However, many Americans only have one choice of broadband internet provider and it is unlikely that any reputational damage would lead to a dip in subscriber numbers.

How might this affect consumers around the world?

Consumers around the world use the ISPs operating in their own country to access the internet so won’t be affected by the decisions taken by US ISPs. And because ISPs are regulated nationally, the only direct impact of this US action on other countries will be if they choose to follow the US example.

Many countries already have laws or regulations in place protecting net neutrality and there have been high profile, consumer and citizen led campaigns to make sure they are upheld, such as in India. However, some do not and this change in US law could slow down or reverse the progress that has been made to protect a free internet internationally. In other countries, like Portugal, mobile carriers use the practice of ‘zero rating’ where data from preferred providers doesn’t count towards the subscriber’s data allowance, to get around EU rules on net neutrality. As a result, consumers are faced with a complicated range of tariffs and plans for data use based on a package of brands’ services.

While there is unlikely to be any immediate impact on consumers outside of the USA, ISPs may be emboldened to push for a relaxation of the law. For example, we have already seen ISPs in Canada announce opposition to net neutrality rules in light of the FCC decision.  

There may also be opportunities for other jurisdictions to take advantage of the restrictions placed on US companies by promoting opportunities in their markets.

It could also be that the US decision could be manipulated by regimes as a way of legitimising more intrusive restrictions on internet use, where freedom to access content and services is already under severe pressure.

What is going to happen now?

In the US, while the final text is now published, legal challenges from a wide range of organisations, campaigners and politicians are being considered and it is too early to grasp how it will impact consumers.

However, we should not underestimate the impact it will have on the nature of the internet for individuals both as consumers and citizens. Consumer organisations should watch developments closely and understand the relevance for their country, and communicate the arguments and implications of net neutrality to consumers and decision makers.