Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.

1. Network Neutrality: Origins, Politics and
Implications of New Rules for an Open Internet
William H. Dutton with R.V. Rikard
Quello Professor of Media and Information Policy
Quello Center, Michigan State University
Follow @QuelloCenter
Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory
Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.

2. The James and Mary Quello Center
• Established in 1998 in honor of FCC
Commissioner James H. Quello
• Seeks to seeks to stimulate and inform debate
on media, communication and information
policy for our digital age
• Follow the Quello Center online at:
• http://quello.msu.edu
• Twitter @QuelloCenter

3. Outline of Session:
• Network Neutrality
• The Origins and Context of New Rules
• Selected Issues and Conflicts
• The Politics of Net Neutrality
• Implications of Net Neutrality
• Broader Implications of a Shift toward
National Policy and Regulation

4. Defining Net Neutrality: SNL’s Panel

5. Network Neutrality is:
“Boring” John Oliver, but truly complex
Open Internet?
Battle for the ‘Last Mile’?
Public Utility, available to all?
Internet’s First Amendment?

6. John Oliver: ‘All data must be treated equal.’ 1 Jun 2014

7. John Oliver: proposing a better label for Net Neutrality, 1 Jun 2014

8. FCC’s Rules for Open Internet, Net Neutrality:
No blocking (of lawful content)
No throttling
No paid prioritization, access tiering, ‘fast lanes’
No unreasonable interference
Transparency

9. Multiple Relations to be Governed
Content
Providers
•Back-end
•Interconnections
•Peering
Broadband
Providers
•Throttling
•Blocking
•Managing
Consumers

10. Origins and Context of Neutrality

11. The Rise of the Internet Over the Past Decade
Many Economic, Social & Democratic Potentials of the Internet and
Social Media, such as for a Fifth Estate
Apparently Unstoppable Progress of the Internet and related ICTs, such
as Social Media
- Internet (85% in North America; 26% in Africa)*
- Social Media (52% Facebook in North America; 10% in Africa)*
- The New Internet World (East Asia & Global South)
- Continuing Innovations: Twitter, LinkedIn, Tumblr, WhatsApp,
WeChat, Pinterest, Instagram, Google+, Snapchat, Periscope,
Beme, …
- More innovations: Mobile Internet, iWatch, the first Selfie
Election in US, Mobile Payments, …
*Source: http://www.internetworldstats.com/america.htm [24 July 2015]

12. Cord-Cutting Shift to Internet and Mobile

13. Vision of Open Internet with
all Services Sharing the Same
Lane to the HH
http://www.theopeninter.net

14. Vision of Services
on Fast and Slow
Lanes to the HH
http://www.theope
ninter.net

15. Fears Around the Last Mile:
Few Large Players
• A Key Bottleneck
• Concentrated Industry
• Lack of Competition
• 82% US HHs one provider
Incentives to Favor
• Bundled Cable Services
• Ownership of Content
• On Demand, Pay TV
Business Model
Light Regulatory
Regime
• Reliance on Market
• Referee Lacks Authority

16. Is Oliver’s Logic Problematic?
All ‘data’ must be treated equally?
or
Unit of data would be the byte, so should all ‘bits’
be treated equally?
A return to historical
inequalities across services?

17. Inequalities of the Analog Era
Consumers have paid the most for narrowband
telecommunications services, a telephone call
Consumers have paid the least for broadband,
high-bandwidth services, such as TV, as in free,
advertiser supported TV
If all bits treated equally, consumers should pay
more for video, i.e., higher bitrates?

18. Historical Uses of Differential Services
Toll Roads: finance construction
Tiered Services of Rail, Airlines
Diamond Lanes on Freeways

19. European Network Neutrality
US No Fast
Lane EU Two Tiers

20. Shifting FCC on Access to Last Mile
1980: Computer II Inquiries
• Telecom Regulated – basic transmission
• Cable Unregulated
2005: Wireline Broadband Order
• DSL Telecom Access Requirements Unregulated
• Cable Modems Remain Unregulated
2015: Network Neutrality
• DSL access regulated
• Cable Modem access regulated

21. FCC on Access to Last-Mile
Market
Regulation

22. FCC on Access to Last-Mile
‘Inappropriate
Utility-Style
Regulation’
‘Bold Action to
Protect Open
Internet’
Waters, R. ‘Internet Groups in Tricky Position over US Net Neutrality’,
Financial Times, 12 February.

23. Alternative Paths to Competition*
• ISPs and Cable/Telco
• Content and Cable/Telco
Structural Regulation (vertical integration)
• mandatory standardization of TCP/IP
• mandatory interconnection
• competition focused on price and scale
Network Neutrality:
• proprietary protocols
• exclusivity agreements with providers
Network Diversity:
*Yoo (2005): 9.

24. The Politics of Network Neutrality
The Redneck Review Blog

25. Legal-Institutional Politics of Net Neutrality
Independence
of FCC
(Non)Partisan
Communication
and Internet
Policy
Industry and
Lobbyist Access
Separation of
Powers

26. Telecom Industry
Cable Industry
Big Network
Operators
Internet Industry
Content Providers
Advocacy Groups
Digital Activists
Proponents and Opponents of Network Neutrality

27. Republicans
Democrats
Proponents and Opponents of Network Neutrality

28. Politics of
Net
Neutrality
Neutral,
Rational-Legal
Analysis?
Power of
Grassroots
(Internet
Users)?
Partisan
Politics
(“power
grab”)? Rising Power
of Internet
Industry,
Silicon Valley?
Tech
Populism?

29. 0
10
20
30
40
50
60
70
80
90
100
SearchFrequency
Google Search Queries for “Net Neutrality” (2004 – May 2015)

30. 1/18/2014 5/17/2014
9/13/2014
11/15/2014
2/28/2015
4/18/2015
0
10
20
30
40
50
60
70
80
90
100
SearchFrequency
Google Search Queries for “Net Neutrality” (June 2013 – May 2015)

31. 0
10
20
30
40
50
60
70
80
90
100
SearchFrequency
Net
Neutrality
Digitial
DivideGoogle Search Queries for “Net Neutrality” “Digital
Divide” & “Open Internet” (2004 – May 2015)

32. 0
10
20
30
40
50
60
70
80
90
100
SearchFrequency
Net
Neutrality
Digitial
Divide
Google Search Queries for “Net Neutrality” “Digital Divide” &
“Open Internet” (June 2013 - May 2015)

34. Normalized Google Search Frequency for Net Neutrality in the United States
(2004 – March 2015)

35. Normalized Google Search Frequency for Net Neutrality by
U.S. City (2004 – March 2015)
Washington DC 100
San Jose, CA 63
Portland, OR 55
New York, NY 54
Austin, TX 53
Philadelphia, PA 53
Pittsburgh, PA 52
San Diego, CA 47
San Francisco, CA 47
Alexandria, VA 46
Seattle, WA 45
Boston, MA 42
Los Angeles, CA 41
Louisville, KY 41

36. Normalized Google Search Frequency for Digital Divide in the United
States (2004 – March 2015)

37. Normalized Google Search Frequency for Open
Internet in the United States (2004 – March 2015)

38. Top Google Search Terms Related to “Open Internet”
(2004 – March 2015)
open internet explorer 100
internet explorer 100
open the internet 40
windows internet explorer 20
internet wont open 10
internet explorer 7 10
open ports 5
microsoft internet explorer 5
open dns 5
internet explorer 11 0
open range internet 0
wide open west 0
open vpn 0
internet explorer problems 0

39. Implications: Careful What you Wish For?
• Incentives to invest in alternative networks
• Value of media stocks
• Advertising revenue for cable and TV
Market Concentration? Increase/Decrease:
• Consumer Choice
• Quality and Speed of Services
• Competition
Last Mile Services? More or Less:
• Take-up by other nations
• Clash with Britain’s focus on blocking pornography, child protection
Other Implications:

40. Unintended Impacts (J.J. Nadler 2015):
Regulation of Prices, Terms and Conditions
Universal Service
Interconnection
State Regulation
International

41. Moral Panics: Social Media & the Internet

42. Global Trends Driving Regulation
Internet &
Social
Media
Regulation
Significance of
the Net
Digital Divides
Trust Bubble +
Snowden
Moral Panics?
(Social Media)
‘Left Out’
of Policy
National
Policy &
Regulation

43. Broader Implications?
Clarion Call for Politicians to ‘Do Something’
Blind Regulators and
the Internet (Indian
Parable)
Lack of an Appropriate Regulatory Model
Image from: http://www.jainworld.com/literature/story25i1.gif

44. Appropriate Regulatory Models?
(Proportionate to Offense)
Speech?
Press?
Post?
Data Custodian?
Telephony, Common Carrier?
Cable?
Broadcasting?

45. Governing a Global Ecology of Choices
National
Governmental
Policy & Regulation
Industry, ISP, SNS
Policy & Regulation
User Self-
Regulation
(Learning &
Education)
Bilateral &
Multilateral
Treaties, Inst.
Tech Populism
Multistakeholder,
Multilateral Global
Internet
Governance

46. The Coming Decade
Last Decade’s Narrative: Technical Innovations
The Next Decade’s Narrative: Policy, Regulation &
Governance
Risk: Undermining the Vitality of the Internet and
Social Media, and their Democratic and
Societal Potential

47. What Can be Done?
Analytical,
Empirical, Policy
Research
Develop More
Appropriate
Regulatory
Model(s)
Education of Users
& Regulators

48. Summary & Conclusion
• Great Complexity and Uncertainty
• Historical Shifts of Positions
• Host of Issues
• Underplayed Role of Tech Populism
• Uncertain Outcomes
• Need for Research, Challenge Conventional
Assumptions

49. Network Neutrality: Origins, Politics and
Implications of New Rules for an Open Internet
William H. Dutton with R.V. Rikard
Quello Professor of Media and Information Policy
Quello Center, Michigan State University
Follow @QuelloCenter
Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory
Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.