Why Cord-Cutters Should Care About Net Neutrality
Business + Economy

Why Cord-Cutters Should Care About Net Neutrality

Now that Election 2014 is firmly in the rearview mirror, political coverage has ceded the spotlight to policy issues in the public sphere. While no one is surprised that Obamacare or ISIS have returned as hot topics of debate, President Obama last week added net neutrality on the priority list, too.

It is a more than slightly arcane subject, even for those well versed in the workings of the Internet. Website after website (including this one) have rolled out explainers to try to make the subject accessible, and one shudders at the thought of aged politicians who still think of the Internet as “a series of tubes” debating a subject this complex and difficult to parse.

Related: The Net Neutrality Debate Explained

Even the best explanations have fallen short in one basic task, and that is how the ultimate decision on net neutrality will directly affect consumers who have a huge stake in this fight.

Whether you know the term net neutrality or not, most of us at this point are familiar with the concept of cord cutting — the idea that streaming content online can replace traditional cable television packages, allowing consumers to only pay for the programs that they want to watch and not the literally thousands of channels of dross that most of us have forced upon us by cable companies.

As the technology has advanced, content providers have become more receptive, and the consumer has become more educated making it more likely that the cord-cutters’ day had come.

All of that can be undermined by the outcome of the net neutrality debate and the new rules, if any, that will define and regulate an Open Internet.

Why Net Neutrality Matters
In extremely simplified terms, failure to preserve net neutrality as policy would be similar to giving larger corporations a version of Disney World’s controversial “Fast Pass.” Larger companies will obviously be able to pay for faster Internet delivery to the consumer, while smaller sites will be delivered at a slower rate, and startups will have to feed off the scraps.

Let’s say for instance that Apple decides that it wants to build its own version of Netflix (it’s funny to think of Netflix as a scrappy underdog, but next to Apple, it certainly would be). Using its mountains of money and existing entertainment industry connections, Apple could build a streaming library that is appealing, develop original programming and put its famous marketing muscle behind it. In addition to all of those advantages, in a world without net neutrality, Apple could also pay your ISP for faster delivery.

Given the choice between the fast and crisp Apple experience and Netflix streaming video that feels like dial-up circa 1996, you will choose Apple, and Netflix would wither away. And in that environment it is almost impossible to imagine a startup succeeding against these stacked odds.

Related: A Startup You’ve Never Heard of Is Changing the Internet

More problematic would be the situation in which your ISP itself decides to become a player. Let’s say Comcast (to pick any easy villain) notices the declining subscriber base to its core product and an increase in Internet bandwidth to streaming services. One potential action it could take would be to simply make itself a competitor and ensure that you get its video service at lightning speed while companies such as Netflix or Amazon Prime are throttled. As part of its 2011 deal to buy NBCUniversal, Comcast agreed to abide by the FCC’s previous net neutrality rules through 2018, but it’s not completely clear yet what will happen after that.

Another, more likely, scenario would be for the ISP to simply shift the cost from its cable package to its Internet service (an inevitable situation that net neutrality policy wouldn’t really stop). Is it really a victory for consumers to ditch the 10,000 channels they don’t want for the 20 they do, but still end up paying the same company the same amount of money (or more, if the ISP switches to a usage plan similar to data plans on cell phones)?

As Important as Electricity
At the end of the day that brings up the crucial set of subtexts that govern this debate, and the question of reclassifying broadband providers, as Obama advocated: Is the Internet a utility or a luxury and should more money entitle you to better service?

It’s easy to see how a veteran politician who hasn’t had to apply for a job since the ‘80s might still view the Internet as a novelty, a luxury for those that can afford it, rather than the central interface of modern life. Internet service may not be as crucial as running water, but it arguably plays as important a role as electricity and phone service. For instance, it is almost impossible to find a job now without the Internet. A large portion of car sales, apartment rentals, and real estate listings are found online these days rather than in the classifieds section of your local newspaper.

The argument from those who want a free market with less regulation is that the companies involved are largely responsible for the construction of the Internet’s current infrastructure and therefore are entitled to profit from it. As with any move toward government action in the marketplace, there are the rallying cries that government stifles innovation and ultimately ruins anything that it touches (Ted Cruz’s statement that “Net Neutrality is Obamacare for the Internet” is a good example).

Those arguments siding with the power-players rather than the populists tend to ignore a large part of the history of the Internet and the fact that so many of the innovations that have fueled the Internet’s exponential growth have come from exactly the sort of startups that would be stifled by the fees Comcast and other network gatekeepers could charge. Perhaps most significantly, the “government ruins everything” argument was probably the exact same one used by the water and power companies at the end of the gilded age. Imagine if Coca Cola took over the public supply with the argument that they could improve it?

The net neutrality debate is certainly a tangled web, but it is also a debate where those who support an open Internet cannot afford to sit on the sidelines.

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