(but we can fix it)
By Nilay Patel
Here’s a simple truth: the internet has radically changed the world. Over the course of the past 20 years, the idea of networking all the world’s computers has gone from a research science pipe dream to a necessary condition of economic and social development, from government and university labs to kitchen tables and city streets. We are all travelers now, desperate souls searching for a signal to connect us all. It is awesome.
And we’re fucking everything up.
Massive companies like AT&T and Comcast have spent the first two months of 2014 boldly announcing plans to close and control the internet through additional fees, pay-to-play schemes, and sheer brutal size — all while the legal rules designed to protect against these kinds of abuses were struck down in court for basically making too much sense. “Broadband providers represent a threat to internet openness,” concluded Judge David Tatel in Verizon’s case against the FCC’s Open Internet order, adding that the FCC had provided ample evidence of internet companies abusing their market power and had made “a rational connection between the facts found and the choices made.” Verizon argued strenuously, but had offered the court “no persuasive reason to question that judgement.”
Then Tatel cut the FCC off at the knees for making “a rather half-hearted argument” in support of its authority to properly police these threats and vacated the rules protecting the open internet, surprising observers on both sides of the industry and sending new FCC Chairman Tom Wheeler into a tailspin of empty promises seemingly designed to disappoint everyone.
“I expected the anti-blocking rule to be upheld,” National Cable and Telecommunications Association president and CEO Michael Powell told me after the ruling was issued. Powell was chairman of the FCC under George W. Bush; he issued the first no-blocking rules. “Judge Tatel basically said the Commission didn’t argue it properly.”
In the meantime, the companies that control the internet have continued down a dark path, free of any oversight or meaningful competition to check their behavior. In January, AT&T announced a new “sponsored data” plan that would dramatically alter the fierce one-click-away competition that’s thus far characterized the internet. Earlier this month, Comcast announced plans to merge with Time Warner Cable, creating an internet service behemoth that will serve 40 percent of Americans in 19 of the 20 biggest markets with virtually no rivals.
And after months of declining Netflix performance on Comcast’s network, the two companies announced a new “paid peering” arrangement on Sunday, which will see Netflix pay Comcast for better access to its customers, a capitulation Netflix has been trying to avoid for years. Paid peering arrangements are common among the network companies that connect the backbones of the internet, but consumer companies like Netflix have traditionally remained out of the fray — and since there’s no oversight or transparency into the terms of the deal, it’s impossible to know what kind of precedent it sets. Broadband industry insiders insist loudly that the deal is just business as usual, while outside observers are full of concerns about the loss of competition and the increasing power of consolidated network companies. Either way, it’s clear that Netflix has decided to take matters — and costs — into its own hands, instead of relying on rational policy to create an effective and fair marketplace…