The principle of net neutrality is under siege in the US as well as in Europe. In the US, the Federal Communication Commission voted to begin reversal of Title II rules. In Germany, Deutsche Telekom launched Stream On, a premium streaming service for certain products only and in the Netherlands, T-Mobile’s “Data-free Music” won its zero-rating case in a Rotterdam court. Many thought the struggle ended in 2015. But now it seems as if big telecom operators have licked their wounds and are launching a new assault on users and startups. To make sense of the latest news, we want to review the main principles we fought for, why they matter and what we can do to preserve it.
Startups are innovating day and night, realising ideas that no one expected. They are designing electric vertical takeoff and landing jets, AI composed music, 3D printed buildings and much, much more. Its proven that startups contribute disproportionately to job creation. And it is clear, that startups grow where these basic criteria are met. Roughly speaking, these are: market access, access to talent, strong Universities, access to finance, a hassle-free regulatory environment and a culture of entrepreneurship that allows for trial and error. In the absence of these, public money might stitch the one or other bit to improve the ecosystem, but it can never replace open growth.
Net neutrality is not only a core component of a thriving startup ecosystem but the very fundament of new businesses. What is it? It’s the principle that all traffic should be treated the same. In practice this means that network operators cannot discriminate between data that users receive through the internet. Some practices that undermine net neutrality are zero-rating (where premium partners’ products do not consume data from your plan), throttling (whereby internet speed is reduced to prioritize other services) or fast lanes (where you pay more to get more). When some corporations started toying with these ideas, the US Federal Communication Commission (FCC) introduced Title II rules. They classified internet providers as “common carriers”, which allowed stricter utility rules to apply to them. In Europe, similar rules were adopted in 2015 and specified by the BEREC guidelines. As Garrick Long of the Factory wrote after the adoption: “The directive cleverly disguises fast lanes for commercial purposes as specialized services, throttling as traffic management, class/application-based discrimination as preventative maintenance and the unfair practice of zero-rating will be left to local regulatory authorities in each member state to decide.”
Why does this matter? The ability to buy access to a faster connection can be the bottleneck to an open internet. If large incumbents can lock out newcomers (picking winners and losers), or if they can pay for a better connection, startups have an inherent disadvantage. Competition would be skewed, as it wouldn’t be about the better product anymore, but about affording access to the net (and who was there first). Ultimately, seemingly minor exceptions to net neutrality such as specialised services can open the floodgates, making for a slippery slope towards a two-class internet, as John Oliver puts it.
All’s well that ends well. We see that neither in the US nor in Europe the debate really ended after adoption. Dossiers get reopened for political reasons or when too much room for different implementation is left. And that’s what big telecommunications providers must be hoping for now, as they overtly and subtly try to undercut net neutrality rules. What can be done? Engage in the debate. If you’re in the US, comment on the FCC’s proposals. Let us know what you think about net neutrality rules.