How Will Striking Down Net Neutrality Affect Consumers?

Yesterday, a U.S. appeals court ruled against the FCC's net neutrality regulations, which sought to force service providers to treat all Internet traffic the same. Internet freedom advocates consider the ruling a major defeat, while companies including Verizon, AT&T and Comcast are the clear winners. How will the average Web surfer be affected?

Service providers would like to be able to charge data hogs more for usage -- or slow down their file transfers, so not to hinder other network traffic. Even though the Internet seems like a magical technology with no limits, there actually are physical constraints and costs that service providers need to worry about. This FCC ruling allows them to better manage their networks accordingly.

But if the Internet goes completely unregulated, then there is a potential for those companies to take advantage of the system. Wired imagines one such scenario:

A broadband company could, for instance, ink a deal with Microsoft to transfer all attempts to reach Google.com to Bing.com. The only recourse a user would have, under the ruling, would be to switch to a different provider -- assuming, of course, they had an alternative to switch to.

Far-fetched? Yes. Impossible? No.

So the FCC and Congress should work to ensure that such shenanigans are forbidden. Service providers shouldn't be allowed to arbitrarily discriminate. For example, Comcast also shouldn't be able to block any Verizon ads that websites are running. But fairly uncontroversial net neutrality legislation could set reasonable limits. Such new laws could ensure that any discrimination on the part of service providers be grounded in controlling costs so to actually benefit the average Internet user and forbid those based on ends including payoffs, political gain, anti-competitive behavior, etc.

Let's think about what might and might not pass that sniff test. The Wired example certainly wouldn't: that consisted of a payoff resulting in the average consumers being worse off with access to fewer websites. But charging data hogging websites more or slowing down their traffic would ultimately benefit the average Web surfer: these sites are imposing a disproportionate cost on the service provider, which is spread over everyone if absolute net neutrality is in place.

Asserting the Internet should remain open and unrestrained isn't the same as saying service providers shouldn't have any control over their own networks. They have a business to run, and as long as they don't arbitrarily or unfairly discriminate among various users or websites, but do so based on the cost the traffic imposes, then such mild limits to net neutrality actually would benefit the average user in the long run.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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