Internet Equality: The Fight for Net Neutrality

You hop onto Netflix to watch your favorite T.V. show. The service grinds to a halt. Now what? Unfortunately, this might actually become the norm. How could this be? It’s all about net neutrality. There’s a theory out there floating around on the Interwebs that the Internet should be “neutral.” In other words, the broadband and Internet service providers, like Comcast, Time Warner, AT&T and Verizon should not play favorites with bandwidth.

The Big Telecoms Vs Netflix

It is possible that companies like Verizon could theoretically start to limit the speed at which you can access sites like Netflix – all to favor its own T.V. services. Recently, Netflix agreed to pay Comcast Corporation to stream their programming smoothly to Comcast customers, a landmark move that will set an example for how Netflix deals with other broadband providers. In exchange for payment, Netflix will receive direct access to Comcast’s broadband network. However, smaller startups may not be able to afford such payments to big ISPs and cable companies. In addition, ISPs and cable companies that belong to media companies could give preferential treatment to them by offering lower rates and more bandwidth.

For example, if Verizon or AT&T wants to encourage people to pick up its own T.V. services, it could start slowing down your connection when you access Netflix. Not fair? Well, according to some telecom companies, it’s their bandwidth and they can do whatever they want with it.

Netflix CEO, Reed Hastings, has something to say about this. In a recent statement, he argues that users will riot if the telecoms start “shaping” the bandwidth to discriminate against the company.

At the same time, companies like AT&T and Verizon don’t seem to be worried about the impact of upsetting their respective user base. The evidence of this is in the fact that most of the large players in the market have actively rejected Netflix’s request to tie into its own video distribution network.

How Netflix Gets To You

Companies, like Netflix, rely on users being able to use bandwidth purchased from telecoms to access its site. The company charges much less than those telecoms for entertainment. You can see where this puts Netflix – right in the crosshairs of its competition.

If Netflix becomes a real target of discrimination, users might turn to sites like YouTube, downloading videos using YTD from If you choose this route, just make sure you remember to respect intellectual property. Another option is to watch more movies or – gasp – read.

The telecoms aren’t convinced yet that they need to resort to what Hastings regards as nefarious tactics, but they could. A federal appeals court recently ruled that the FCC exceeded its authority in attempting to enforce network neutrality. The crux of the ruling was:

Even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.

In 2010, the FCC introduced the Open Internet Order. This was the first attempt, officially, to regulate the Internet service providers, preventing them from discriminating against competitors or other websites that required heavy bandwidth to access.

Netflix Looks To Build Its Own CDN

A Content Delivery Network, or CDN, is a way for a company to deliver its content to users quickly. It’s something Netflix decided it needed to improve service. Servers are built around the edge of the network, and content is sent to those servers. That way, users can access data from the closest server, rather than from Netflix HQ. It reduces the load on Netflix’s central servers, eliminates the need to use a third-party CDN, and users get a better streaming experience.

Where Do You Stand? How Do You Benefit?

Regardless of whether you believe that the Internet should be free, this is an issue you should be concerned about if you use sites like Hulu, Netflix, iTunes, and Amazon – all these sites rely on your ability to access the net in an unrestricted manner.

Some upstarts in the industry, like Google, understand the importance of giving users access to sites like Netflix. They also understand how business works. In 2010, it purchased 111 Eighth Ave in New York City – one of the world’s most important telecom peering points – for $1.9 billion.

What about the laws of free competition? They don’t exist in today’s mixed economy – not when the telecoms have a monopoly granted by the FCC. That puts people on all sides of the political fence between a rock and a hard place. What does net neutrality mean when the market itself isn’t free?

Barbara Christman follows internet tech trends. From gadgets to web services, she blogs about the news and effects on the everyday internet user.

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