Net NeutralityJune 7, 2007Federal Issues CommitteeThe following is for study only and has NOT been approved by the Board of Directors.
Action: Action is not required as C.A.R. has taken a neutral position on this issue.
Status/Summary: The net neutrality debate during the 109th Congress was heated and played out in two largetelecommunication reforms bills. So far, during the 110th Congress the debate seems to be more low-key and focused. To date, only one bill has been introduced concerning net neutrality.
S. 215, the Internet Freedom Preservation Act, was introduced on January 9, 2007 by Senator Dorgan (D-ND). Currently, S. 215 is in the Senate Committee on Commerce, Science, and Transportation with nine cosponsors, includingSenator Boxer. The House has yet to introduce a bill or indicated when/if they will.
Additionally, in March 2007 the Federal Communications Commission (FCC) began a three-month study into the behavior of broadband market participation to see if there is equal access to the Internet. The FCC is focusing on four primary issues: How are broadband providers managing Internet traffic on their networks today; do providers charge different prices for different speed capacities or services; should FCC policies distinguish between content providers that charge end users for access to content and those that do not; and how are or would consumers be affected by these practices.
Traditionally, "net neutrality" has referred to the principles that have guided the development of the Internet. These principles have created a network that is open to all and allows any computer to send a "packet" of information to any other computer with minimal interference from the network. The network does not discriminate against particular hardware, software, underlying network, language, culture, disability, or against particular types of data (with some exceptions for quality of service and network security network practices). The Internet therefore has been "neutral" in its treatment of users and data.Background: Congress is considering legislation to amend the U.S. Telecommunications Act. Among the issues being debated is whether there is the need to codify the "net neutrality" principles that have guided the development of the Internet to date and, if so, how extensive or prescriptive those principles should be.The idea of netneutrality is that the Internet is open to all that are able to access it and that everybody able to access the Internet has equal availability to services and information.These principles have guided the development of the Internet to date. Net neutrality principles calls upon designers of the individual networks, that together make up the Internet, to create their section of the Internet in a manner that allows any computer connected to the network to send information to any other computer on the Internet with minimal interference. A network designed to be perfectly neutral does not discriminate against any other network or hardware, software, language, culture, disability, or types of data.
The outcome of net neutrality could impact the future functioning of the Internet. Proponents of regulation fear that if allowed to continue, the Internet will become a utility that has various tiers of access depending on what services a user is willing and/or able to pay for. Opponents believe that the free market will continue to maintain the openness of the Internet with greater expansion of possibility by private innovation. REALTORS® concerns are that there are not increased costs to real estate firms as they maintain their presence on the Internet and work to expand their access to consumers.Pro: So-called “net neutrality” proponents advocating for more extensive net neutrality language than is already included in existing bills argue that widespread broadband competition does not exist. Most U.S. residents have the choice of only one or two broadband carriers.Without a net neutrality law, the fundamental openness of the Internet, with all voices having a chance to be heard, will be killed.
Additionally, there is no law preventing broadband providers from blocking competing content and services. Broadband providers do not have an economic interest in giving competing service providers access to consumers.
Broadband providers will be tempted to increase profits by signing lucrative contracts giving large e-commerce companies better speeds and quality of service. This will create a two-tier Internet where the richest Internet companies can afford to pay for the best service and everyone else is in the slow lane.
Without a law, startup Internet companies that can’t afford to pay premium prices will be stuck in the slow lane and may not be able to find an audience. Innovation will be killed and small companies won’t be able to compete.Those supporting extensive and prescriptive net neutrality language argue that without legislation, net neutrality will become a thing of the past. They point to statements made by some broadband CEOs that would seem to indicate that they believe that a June 2005 U.S. Supreme Court ruling allows them to modify their current business practices in a way that conflicts with traditional net neutrality principles. That "Brand X" decision ruled that broadband providers' DSL services were not subject to the "common carrier" rules that govern more traditional telecom services like phones and, therefore, did not have to make their networks open to competing Internet Service Providers.
Two broad categories of potential non-neutral practices often mentioned by proponents as likely to be common place if net neutrality provisions are not approved are (1) blocking access, slowing access, or providing lesser quality of service to websites, applications or alternative networks that compete with the broadband provider's own websites or services and (2) instituting pricing structures, i.e. "tiers", for different levels of network access used by Internet application and service providers.
Proponents of net neutrality include a diverse group of Internet application companies (Google, Yahoo, eBay), consumer/civil liberties groups (Public Knowledge, Consumer Federation of America, American Civil Liberties Union), special-interest groups (Gun Owners of America, MoveOn.org, the Christian Coalition) and some Internet pioneers (Vinton Cerf, Tim Berners-Lee, and Craig Newmark).
Con: Those who are opposed to more extensive legislative language argue that extensive net neutrality statutes would create a system of new, unnecessary, and burdensome regulation on the Internet. It would be bad business for broadband providers to block or degrade Web content and services their customers now receive and want.
Broadband competition should be allowed to work. If one broadband provider were to block some Web content, competitors will seize the opportunity to woo that provider's customers to their more open system. Many of today's common network quality control protocols designed to deal with blocking spam or viruses, maintain the quality of VOIP or video applications, and maintaining network speeds would be prohibited by net neutrality proposals.
Broadband providers and many of the companies advocating against extensive net neutrality provisions want to be able to deploy new services, such as television over IP. In order to provide the capacity to do so,broadband providers will need to be able to assign this type of time-sensitive data to a tier of broadband service that doesn’t have to share “space” with everything else on the public Internet – your neighbor’s e-mail with five photos attached, a college kid’s streaming music service, people downloading video clips from YouTube.com. Without a separate tier, broadband providers say they won’t be able to guarantee the quality of service that customers demand.
Broadband providers point out that without new sources of revenue, efforts to build the next-generation of super-fast broadband networks will be delayed. Prescriptive net neutrality provisions would prevent a broadband provider from charging for preferential speeds and service regardless of the demands placed on the broadband system by a service or application provider.
Opponents of more prescriptive net neutrality language argue that to create a set of detailed net neutrality rules would (1) impose regulatory burdens on Internet service and content providers that will stifle innovation and competition, (2) ignore the competitive pressures that broadband providers face given customer expectations and demands, (3) prohibit many of the network maintenance/security practices necessary to insuring that the net works efficiently, (4) stifle the further development and expansion of broadband networks, and (5) shift the cost of future network development to consumers.
The ranks of the opponents include large broadband providers (AT&T, Verizon, Comcast), network equipment providers (Cisco, Qualcomm, Corning), free market think tanks (Competitive Enterprise Institute, Center for Individual Freedom) as well as special-interest groups (U.S. Chamber of Commerce, National Association of Manufacturers, National Black Chamber of Commerce, Latinos in Information Sciences and Technology Association).
Impact on REALTORS®: The outcome of this debate could impact the future functioning of the Internet. As such, some real estate practitioners have argued that it could also increase costs incurred by real estate firms as they work to maintain an Internet presence that isaccessible to the greatest number of consumers.
Other real estate industry participants have argued that:
Market forces will do a better job of working out how the Internet functions than government regulations can
Internet infrastructure providers and content providers are engaged in a business, not a public utility, and should be allowed to determine their business strategies
It would be unwise for REALTORS® to be advocating for greater government intervention and laws/regulations when the real estate industry is itself in the middle of battling charges of anti-competitiveness and has argued that business’ - like real estate and the cooperative multiple listing services- and markets should be allowed to operate without excessive interference.
NAR Policy: In November 2006 NAR took policy on net neutrality which stated“That NAR adopt a neutral position on proposed ‘net neutrality’ provisions in any federal telecommunications legislation.”However, in May 2007 NAR modified their policy to: ”That NAR support the following principles in any legislation to require broadband providers to adhere to net neutral practices:
Consumers are entitled to access the lawful Internet content of their choice
Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement
Consumers are entitled to connect their choice of legal devices that do not harm the network
Consumers are entitled to competition among network providers, application and service providers, and content providers
Network providers should not discriminate among Internet data transmissions on the basis of the source of the transmission as they regulate the flow of network content.”
C.A.R. Policy: In January 2007 C.A.R. took policy: “That C.A.R., in conjunction with NAR, adopt a neutral position on proposed ‘net neutrality’ provisions in any federal telecommunications legislation.”