Net Neutrality FCC vs. FTC

Net Neutrality is an emotional subject. It sounds like it is about equality and liberty for all, but that’s a simplification. As a foundation thought, this is not about “equality”, it is about which federal agency regulates the Internet, the FCC or the FTC?  Read this post and I hope it will bring some clarity to the discussion, and help the folks on both sides of the polar topic realize that they have more in common than they thought – keep the internet free!


The view of Net Neutrality proponents is that internet service providers (e.g. Comcast, AT&T) are in the business of delivering internet bits to / from users, and any filtering of these bits, or preference of some bits to other bits goes against the god given foundation of the US of A. This is ‘Merica!. Don’t mess with my internet!  Why then would anyone be interested in repealing Net Neutrality?

Some background on pricing

As home users, we pay a monthly fee and stream all we want. The ISPs average usage out over time and make sure they have the ability to deliver the bandwidth that their customers demand, and you get charged to make all this happen. Upstream of your immediate ISP, its more complicated.

Upstream of Comcast/AT&T, the Internet is a world of interconnected networks, big networks, with peering agreements. The Internet is not a network, it is a network of networks. We take it for granted that a user on AT&T U-verse can communicate with a user on Comcast, but this would not happen if those companies – and the other companies between them – did not have peering agreements to move bits to/from their major networks. (I just checked, there are 13 networks between my house and www comcast net).  Technically a count of routers, and there could be more than one inside each ISP along the way, but the point is that there are multiple layers of networking providers between any of us as home users and big content providers.  They work to keep this path short, but the layers must exist to have the internet scale to the levels of users that supports. 

All of this network of networks traffic ultimately funnels to a set of backbone networks which tie all the networks together and this backbone is funded by the US National Science Foundation and the data throughput is staggering.

In these big networks, network inter-connection is “free” so long as the number of bits in, is roughly equal to the number of bits out. This was one of the foundation principles defining the network of inter-connected networks that we call the internet. Everyone would like to connect to it because there is mutual benefit for all parties. This works so long as producers and consumers of bits are roughly random – it balances out. By contrast, consider what happens when the numbers are not 50/50. Here, if you SEND more than you receive, you pay the downstream party for bits you send that are more than bits you receive. 

Enter the modern world of video delivery.  There are multiple downstream networks from Netflix, yet the cost that Netflix pays to send bits gets REPEATED at every downstream network. Netflix only pays the first… The issue that some companies have very successfully figured out that they can get into the video delivery business over internet and OTHER companies, downstream of them will be forced to PAY to deliver their content. This is nothing short of a genius move! Netflix gets other companies to pay to deliver the content and the consumers pay Netflix.  SMART!  The ISPs in the middle though are not happy with this arrangement and so we get calls to repeal net neutrality! Bottom line, they want to be paid. They want to be paid by Netflix, but if they can’t get that, they’ll eat it out of the consumers with nickel, dime and dollar additions to bills. 

Caching comes into play. The Netflix video library seems infinite, but it’s a finite number. ISPs CAN cache the whole thing and if do, the ISP no longer has to pay the upstream internet providers for sending the hugely redundant bits. Netflix has caching servers they can install at ISPs to make this easier. ISPs almost surely also expect to be paid for hosting the caching servers in their data centers. Netflix likely expects them to do it for near free as just a caching service on fees they would otherwise have to pay the upstream network providers. 

Then this multiplies by the number of companies in the video delivery business. ISPs end up with 100s of caching servers scattered around the country for EVERY video delivery company multiplied by 100s of video companies equals real costs. The video delivery companies that are not cached are now pissed because they are being discriminated against. You cache Netflix, but not me!  NetFlix comes in high fidelity and my service is throttled! We want equality! It’s illegal! It’s anti-competitive.  Notice I’m not talking about outright discrimination here, this is just the way it plays out when attempts are made to make it efficient for the big players.

FCC or FTC
For the folks wanting to repeal Net Neutrality, the grand question of the present debate is not one of equality for everyone, the question is one of fair business practices and anti-trust. Are the actions by the ISP monopolistic? Are contracts with up-stream providers “fair”? The Net Neutrality proponents want to have non-filtered internet. Notice that both groups are not really wanting different things and though everyone appears to not get along, many are motivated by the same goals, keep the internet free!

With Net Neutrality now repealed, the internet does not revert to a place for ISPs to perform evil.  It goes back to a world of 2 years ago, where the FTC was in charge instead of the FCC.  Is the FTC more hands off?  Possibly – but anti-competitive rules apply even more strongly at FTC so the fears here of doom with the repeal do not seem well founded.  

Keeping the internet free
For me, the present course is good – but not for any of the above reasons. I am more interested in the 1994 CALEA law and whether it continues to exempt computers and networks from the CALEA requirements for real-time and remote, wiretap. Putting the internet in the dominion of the FCC makes it seem more like a “phone”. If the internet is regulated by the FTC rather than the FCC, this puts the internet further away from common carrier and IMO, is GREAT for civil liberties. We’ll have to wait and see if the courts and laws agree.

I wrote the foundation of this on facebook a few days ago and it received a good deal of interest.  Moved it here to make it a bit easier to read. Let me know your thoughts.

Joe Nord

Originally posted Dec 20, 2017

Comment from: joe Member

9th Circuit court of appeals today allows FCC case against AT&T for “unfair or deceptive acts or practices” regarding throttling of “unlimited” data plan to proceed.
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/02/26/15-16585.pdf

02/26/18 @ 07:13 pm

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