Venture Explains: The FCC’s decision to ditch net neutrality

The US Federal Communications Commission (FCC) recently voted along political party lines to repeal landmark 2015 rules aimed at ensuring a free and open Internet—a concept known as net neutrality.

What is net neutrality?

It’s the belief that all web traffic should be treated equally. In practice this largely means broadband providers aren’t allowed to create ‘fast’ Internet lanes, and charge websites extra for accessing the boosted bandwidth speed.

Who supports it?

Internet freedom activists and tech giants like Google and Amazon are united in their support of net neutrality around the world. They say big, wealthy web-based companies like Netflix can easily afford to pay a premium to use a ‘fast’ Internet lane to deliver their content to customers. But younger, less established competitors can’t, and would be forced to crawl along in the ‘slow’ lane. A multi-speed Internet could therefore stifle competition and innovation, and threaten the level playing field of the open web.

Who lobbied for the rule change?

Even though they insist they believe in the fundamental principles of net neutrality, Internet providers say current laws surrounding the concept are outdated and are unnecessarily preventing them from raising desperately needed extra revenue to maintain networks, and develop new products and services over the long-term. Ajit Pai, who was named FCC chairman shortly into the start of the Trump administration, agreed. He argued the 2015 rules were overly restrictive and throttled competition and innovation among service providers.

What happens next?

Analysts say Internet users are unlikely to see immediate changes but smaller startups worry the lack of restrictions could drive up costs or lead to their content being blocked. New York Attorney General Eric Schneiderman, a Democrat, said he would lead a multi-state lawsuit to challenge the reversal.