Net Neutrality and the Alternative

May 17th, 2018

Shorn of the silly excuses about hampering innovation by ISPs, ditching Net Neutrality is more about reducing regulations. But regulations quite often are responses to abuses, so the issue may never have come up if people didn’t find their Netflix signals constantly stuck in the “buffering” zone.

The reason that was happening was because some ISPs, such as Verizon, were throttling the stream because it was using up what they regarded as too much bandwidth. After one failed attempt that didn’t pass court review, the FCC, under President Obama, found a scheme to establish Net Neutrality that worked, by reclassifying ISPs under Title II.

So against industry opposition about more regulation, ISPs were no longer allowed to slow down online traffic. All legal traffic had to flow freely, so users of Netflix and other services didn’t have to worry, especially when streaming 4K content, such as the latest episode of “Jessica Jones.”

With a new administration, with its extreme anti-regulation approach, a Republican-controlled FCC voted, by a 3-2 margin, to reverse Net Neutrality protections. What this means is that those protections are poised to disappear.

That said, it doesn’t mean ISPs will resume traffic management of streaming video and other services. So AT&T CEO Randall Stephenson wrote earlier this year that, despite the pending end of Net Neutrality, AT&T won’t engage in any traffic management tricks. Then again, AT&T claims it never did so before, and besides, it wants the government to feel warm and fuzzy about them so they stand a chance to get the OK to acquire Time Warner.

In any case, this is an issue that isn’t going away without a fight. Although the FCC decided to ignore millions of comments opposing the repeal of Net Neutrality, the U.S. Congress has the power to approve a 60-day review and possible reversal of the FCC’s decision.

Now in theory a Republican Congress ought to mean that nothing will change, and we’ll have relegate the quality of those Netflix streams to the whims of your ISP. But there may some hope that things might change.

So on Wednesday, the U.S. Senate voted to repeal the order to terminate Net Neutrality with extreme prejudice. The vote was slim, 52-47. It passed due to the decision  of three Republican Senators to go along with Democrats and Independents. The verdict benefited from a slim majority.

The prospects for approval are less certain in the House, which has a fairly large Republican majority. The Democrats would have to persuade more than two dozen of their counterparts on the other side of the aisle to vote with them, and the prospects aren’t so good. Even if gains approval, the President would have to sign the bill, and that’s by no means certain since he opposed Net Neutrality. If he vetoes the bill, the chances for a veto override are slim to none.

But even if Net Neutrality goes away, the final verdict of how it impacts ISPs is up to them. Will they restore traffic controls to the detriment of customers because a service is using too much bandwidth? Will it happen because people choose to ditch cable TV in favor of Netflix, Amazon, Hulu and other services? What about DirecTV Now, which is adding cloud-based DVR and other features, or Sling TV and other streaming services roughly mimic traditional cable TV?

Maybe nothing will happen right away, or at all, because you can imagine how customers, knowing the impact of Net Neutrality, will protest big time.

Or will the cable TV companies, who run most of the larger ISPs, opt to take Netflix out of the equation, so it won’t impact online traffic?

Consider that some ISPs, such as Comcast and Cox, already bundle Netflix with some of their set-top boxes. By doing that, the Netflix stream goes through the traditional cable TV pipe as essentially just another channel, and the cable companies receive a piece of the subscription fee. Since Netflix is the number one “abuser” of Internet traffic, it’s taken out of the equation.

If that move spreads, Netflix will have insulated itself from potential online traffic controls by giving away a piece of the pie, or maybe just reallocating some of what it normally spends for streaming to that cable provider. The cable company gets another source of income, and, in turn, hopes that fewer customers will cut the cord.

That’s the sort of innovation that does benefit customers, at least if you’re not watching 4K content on Netflix. Right now, the cable companies have yet to offer 4K, but they will. It’s inevitable. Besides, if your TV has a well-designed UHD upscaling system, the difference between real 4K and converted HD isn’t all that different. Well, except for the lack of HDR support with the latter.

The arrival of 4K on cable boxes also depends on the availability of 4K channels, and that will come too. And imagine if other streaming services sign up for a place on your cable (or satellite) set-top boxes. Would that, and smart TV sets, eventually make Apple TV, Roku and similar streamers essentially obsolete?

I gave up on my Apple TV because my VIZIO TV has Netflix and a choice of thousands of other streaming channels courtesy of its SmartCast app and Google Chromecast. Consider sets with built-in Roku or Google or even Amazon.

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2 Responses to “Net Neutrality and the Alternative”

  1. Kurt says:

    It kind of boils down to how you feel the best/most efficient model can be produced: government regulation or free market competition. I don’t think most consumers will notice either way…

  2. dfs says:

    Kurt, I’d agree with you if in every city, town and hamlet in the land free competition between carriers were available. But usually internet service is bought as part of a package bundled together with t. v. cable, and in my town (and probably in yours) one provider is granted a near-monopoly (there’s always satellite as an alternative) by City Hall. At least in my town, the lucky carrier is chosen by a process that is the exact opposite of transparent, and before the choice is made no citizen input is ever solicited. It may well boil down to which competitor slips our City Manager the nicest Caribbean vacation package. Who the hell knows, when the process is completely opaque? There’s no such thing as a free market here. Result: since the lucky company faces no competition, it faces no urgent incentive to improve its service and it can treat its customers however it likes. Government regulation at the local level has the capacity to be no less crippling than at the national level. With or without net neutrality, there’s not a lot here that Adam Smith would care to claim as his own.

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