Understanding Title II and Net Neutrality

Understanding Title II and Net NeutralityThe White House made some waves this morning by announcing that it would unequivocally support Title II regulation of telecommunications to enforce net neutrality. There’s a lot of confusion about what this means, and the extreme opinions seem to be variants of “the government is taking over my Internets” and “the government is fixing every last thing broken with the Internet”. Obviously, both are entirely untrue, so it’s helpful to understand what exactly this means.

What the heck is Title II?

Title II is a provision of the Telecommunications Act of 1934 (yes, it’s really that old) that classifies services under its purview as utilities. Historically, this has meant only telephone companies and the telephone service they offer. It hasn’t included cable companies, Internet access, or paid TV packages. This allows fairly strict regulations concerning rates charged, repair times, and interconnection rules. In short, phone companies are treated a lot like power companies: “Yes, you’re basically a monopoly, so we’re going to make you play nice for the public interest.”

Currently, Internet access is governed under Title I as an “information service”. This considers Internet access to not be utility-like, but rather a less-critical service with fewer regulations and requirements. The theory was that a lighter touch would lead to greater investment and adoption of Internet access.

What does “net neutrality” mean exactly?

Net neutrality is one of the most misunderstood terms ever. Part of the problem is that the two extreme sides are both attempting to conflate related-but-separate issues in order to advance a side agenda. The real meaning of net neutrality is that we assume that whatever legal traffic we create or request through an Internet Service Provider (ISP) will be delivered on a “best effort” basis without any intentional slowdowns. During non-peak hours, you will rarely see any kind of Internet slowdown. During peak hours, you’ll likely see some congestion when everyone starts jumping online at once (typically 3PM-8PM).

There’s a lot of ways this assumed default can be broken. Comcast, AT&T, and Verizon allowed connections to Netflix to intentionally deteriorate in order to extract payments from them to reach customers on their networks. In this case, they violated the agreement with their subscribers to deliver traffic on a “best effort” basis, but nobody was around to hold them accountable for it. A theoretical application would be an ISP blocking access to YouTube in favor of their own competing product unless you paid an extra fee for access. This hasn’t happened yet, but a lot of people worry that it could without competitive options or regulation.

Bear in mind that not all paid access is bad. Business customers often pay more to have their traffic given a higher priority. Your ISP could allow you to pay extra so that when peak time comes, you always get the best ping times when playing Halo. The difference is in if you’re paying extra for “best effort”, the assumed default, or just for special consideration if the network is experiencing congestion.

So what does applying Title II to phone and cable companies do exactly?

Contrary to what you might hear, this isn’t a wholesale regulation of the Internet, but rather of the “last mile”, the piece of it that comes into your house. In theory, it would be used to enforce “best effort” delivery and non-blocking of any and all legal content. It could also be used to make sure that intentional interconnection disputes (such as between Netflix and darn near everyone else) can be mediated by the FCC. This is viewed as a necessity since the ISP market tends to be dominated by a few very large players.

Takeaway

I view Title II as a stopgap measure to force a largely uncompetitive market to behave like a competitive one without having to actually do anything about competition. It won’t give you more ISP choices, and it will make your existing ISP suck only a little less than it does now.

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