Net neutrality in the United States
||This article is written like a personal reflection or opinion essay rather than an encyclopedic description of the subject. (August 2010)|
|Topics and issues|
Net neutrality in the United States is a hotly debated issue subject to regulatory and judicial contention among network users and access providers. As a de facto matter, there is a degree of net neutrality in the United States, meaning that telecommunications companies rarely offer different rates to broadband and dial-up Internet consumers based on Internet-based content or service type. However, there are no clear legal restrictions against these practices. Broadband providers often block common service ports, such as port 25 (SMTP) or port 80 (HTTP), preventing consumers (and botnets) from hosting web and email servers unless they upgrade to a "business" account. In recent years, advocates of net neutrality have sought to restrict such changes.
In 2005 and 2006, corporations supporting both sides of the issue spent large amounts of money lobbying Congress. In 2006, representatives from several major U.S. corporations and the federal government publicly addressed U.S. Internet services in terms of the nature of free market forces, the public interest, the physical and software infrastructure of the Internet, and new high-bandwidth technologies.
Five failed attempts have been made to pass bills in Congress containing some net neutrality provisions. Each of these bills sought to prohibit Internet service providers from using various variable pricing models based upon the user's Quality of Service level. Described as tiered service in the industry and as price discrimination by some economists, typical provisions in the bill state "[Broadband service providers may] only prioritize...based on the type of content, applications, or services and the level of service purchased by the user, without charge for such prioritization". Other provisions common to the net neutrality discussion were included in the proposed legislative works.
The debate in the U.S. in part extends internationally, but there are also distinct differences, e.g., with respect to the debate in Europe. In practice, net neutrality is also influenced by state level politics.
- 1 History of the concept
- 2 Recent developments
- 3 Positions
- 4 Attempted legislation
- 5 Pricing models
- 6 Legal history
- 7 Technical complications
- 8 See also
- 9 References
- 10 External links
History of the concept
While the term is new, the basic concept originated in the age of the telegram in 1860 or even earlier, where standard (pre-overnight telegram) telegrams were routed 'equally' without attempting to discern their contents and adjusting for one application or another. Such networks are "end-to-end neutral".
Services such as telegrams and the phone network (officially, the public switched telephone network or PSTN) are considered common carriers under U.S. law, which means that they are considered akin to public utilities and overseen by the Federal Communications Commission (FCC) in order to ensure fair pricing and access; such networks are expressly forbidden to give preferential treatment.
In the 1990s, some US politicians expressed concern over protecting the growing new electronic resource.
How can government ensure that the nascent Internet will permit everyone to be able to compete with everyone else for the opportunity to provide any service to all willing customers? Next, how can we ensure that this new marketplace reaches the entire nation? And then how can we ensure that it fulfills the enormous promise of education, economic growth and job creation?
The greatest threat to democracy is the increasing concentration of major electronic media in ever fewer hands.
Cable modem Internet access has always been categorized under U.S. law as an information service, and not a telecommunications service, and thus has not been subject to common carrier regulations, as upheld in National Cable & Telecommunications Association v. Brand X Internet Services. High-speed data links, which make up the Internet's core, are also not regulated by common carrier law. On the other hand, Internet access across the phone network, including DSL, was for a long time categorized as a telecommunications service, and subject to common carrier regulations. However, on August 5, 2005, the FCC reclassified DSL services as information services rather than telecommunications services, and replaced common carrier requirements on them with a set of four less-restrictive net neutrality principles. These principles, however, are not FCC rules, and therefore not enforceable requirements. Actually implementing the principles requires either official FCC rule-making or federal legislation. As the principles do not impose specific regulations, they sparked a debate over whether or not Internet service providers should also be allowed to discriminate between different service providers by offering higher network priority to higher-paying companies and customers, allowing some services to operate faster or more predictably and ultimately become more acceptable to end users.
Some broadband providers have proposed to start charging content providers in return for higher levels of service, creating what is known as a tiered Internet. Packets originating from providers who pay the additional fees would in some fashion be given better than "neutral" handling, while those content providers who do not pay the higher fees would get a lesser level of service. Given this ability to accelerate the handling of selected packets, the service providers would perhaps give Quality of Service guarantees to given senders or recipients.
The legal debate about net neutrality regulations echoes previous arguments about the public interest requirements of the telecommunications industry, and whether companies involved in broadcasting are best viewed as community trustees, with obligations to society and consumers, or marketplace participants with obligations only to their shareholders.
FCC rules do not clearly prevent telecommunications companies from charging fees to certain content providers in exchange for preferential treatment. On the other hand, neutrality advocates Tim Wu and Lawrence Lessig have argued that the FCC does have regulatory power over the matter, following from the must-carry precedent set in the Supreme Court case Turner I.
In 2005, the FCC adopted a policy statement stating its adherence to four principles of net neutrality. In November 2005 Edward Whitacre, Jr., then Chief Executive Officer of SBC Communications, stated "there's going to have to be some mechanism for these [Internet upstarts] who use these pipes to pay for the portion they're using", and that "The Internet can't be free in that sense, because we and the cable companies have made an investment," sparking a furious debate. SBC spokesman Michael Balmoris said that Whitacre was misinterpreted and his comments only referred to new tiered services.
On June 28, 2006, the Senate Commerce Committee approved the Telecommunications and Opportunities Reform Act, which entails guidelines combating discrimination. The act detailed broadband consumer rights without nondiscriminatory language urged by net neutrality advocates, thought to be a compromise between the ever-battling net neutrality campaigns. It also instituted parameters regarding the actions taken by broadcasters and various media players. However, this bill failed to pass both houses.
In a June 2007 report, the United States Federal Trade Commission (FTC) urged restraint with respect to the new regulations proposed by net neutrality advocates, noting the "broadband industry is a relatively young and evolving one," and given no "significant market failure or demonstrated consumer harm from conduct by broadband providers," such regulations "may well have adverse effects on consumer welfare, despite the good intentions of their proponents." In turn, the FTC conclusions have been questioned in Congress, as in September 2007, when Sen. Byron Dorgan, D-N.D., chairman of the Senate interstate commerce, trade and tourism subcommittee, told FTC Chairwoman Deborah Platt Majoras that he feared new services as groundbreaking as Google could not get started in a system with price discrimination.
In October 2007, Comcast was found to be blocking or severely delaying BitTorrent uploads on their network using a technique which involved creating 'reset' packets (TCP RST) that appeared to come from the other party. On March 27, 2008, Comcast and BitTorrent reached an agreement to work together on network traffic. Comcast will adopt a protocol-neutral stance "as soon as the end of ", and explore ways to "more effectively manage traffic on its network at peak times." Comcast reached a proposed settlement in December 2009 of US$16 million, admitting no wrongdoing and amounting to no more than US$ 16 dollars per share.
January 2008, Time Warner Cable first introduced their intention to move to a "consumption based billing" plan to continue profitable net neutrality. In 2009, information was released that packages would be 10GB, 20GB, 40GB, and 60GB, and featured overage charges of $1 per GB, capped at $75, and Time Warner launched the pricing system in several markets including Rochester, NY, Beaumont, TX and Austin, TX. There was a public outcry. Early April, they announced that they would offer larger packages. Public dissatisfaction did not recede. On April 16, they were forced to abandon the plan altogether.
On February 25, 2008, Kevin Martin, the Chairman of the Federal Communications Commission, said that he is "ready, willing and able," to prevent broadband Internet service providers from irrationally interfering with their subscribers' Internet access.
In August 2008, the FCC ruled that Comcast broke the law when it throttled the bandwidth available to certain customers for video files in order to make sure that other customers had adequate bandwidth. The FCC ordered Comcast to disclose the details of its network management practices within 30 days, submit a compliance plan for ending the offending practices by the end of the year, and disclose to the public the details of intended future practices. The FCC’s order was the first Internet network management decision of its kind.
In May 2010, after reports indicated the FCC would drop their effort to enforce net neutrality, they announced they would continue their fight. It was believed the FCC would not be able to enforce net neutrality after a Federal court's overthrow of the agency's Order against Comcast.
On June 6, 2010, the United States Court of Appeal for the District of Columbia in Comcast Corp. v. FCC ruled that the FCC lacks the authority as an information service, under the ancillary statutory authority of Title One of the Communications Act of 1934, to force Internet service providers to keep their networks open, while employing reasonable network management practices, to all forms of legal content. 
On December 21, 2010, the FCC approved the FCC Open Internet Order banning cable television and telephone service providers from preventing access to competitors or certain web sites such as Netflix. The rules would not keep ISPs from charging more for faster access. Republicans in Congress plan to reverse the rules through legislation.
In April 2012, the CEO of Netflix criticized Comcast for not "following net neutrality principles". Netflix charged that Comcast was restricting access to popular online video sites, in order to promote Comcast's own Xfinity TV service. The criticism followed similar comments from Washington, D.C-based consumer group Free Press, which said that Comcast's policies gave "Comcast product an unfair advantage against other Internet video services".
In September 2012, A group of public interest organizations such as Free Press, Public Knowledge and the New American Foundation’s Open Technology Institute were preparing to file a complaint with the FCC that accuses AT&T of violating net-neutrality rules, by restricting use of the Apple application FaceTime to certain customers, that allows video-conferencing. The application which could be used over Wi-Fi signals can now be only used over cellular connection for customers who have a shared data plan on AT&T and excluding those with older unlimited or tiered data plans. Matt Wood, policy director of Free Press, said that "AT&T’s decision to block FaceTime unless a customer pays for voice and text minutes she doesn’t need is a clear violation of the F.C.C.’s Open Internet rules". 
Organizations that support net neutrality come from widely varied political backgrounds and include groups such as Moveon.org, Free Press, Consumer Federation of America, AARP, American Library Association, Gun Owners of America, Public Knowledge, the Media Access Project, the Christian Coalition, and TechNet. Tim Berners-Lee (the inventor of the World Wide Web) has also spoken out in favor of net neutrality.
The free-market advocacy organizations FreedomWorks Foundation, National Black Chamber of Commerce, the Competitive Enterprise Institute, and the Progress and Freedom Foundation; and high-tech trade groups such as the National Association of Manufacturers, oppose net neutrality.
Former hedge fund manager turned Journalist Andy Kessler has argued this point, stating that the threat of eminent domain against the telcos, instead of new legislation, is the best approach. This approach would force telcos to compete and provide better services than what already exist. 
Some U.S. technology trade associations have remained noncommittal on the issue. The U.S. financial sector has similarly remained neutral.
Net neutrality regulations are also opposed by free market advocacy groups, such as Americans for Prosperity and their website No Internet Takeover, as well as minority advocacy groups such as the National Black Chamber of Commerce and LULAC. The Communications Workers of America, the largest union representing installers and maintainers of telecommunications infrastructure, opposes the regulations. One commonly-made argument against net neutrality is that it would benefit industry lobbyists and not consumers due to the potential of regulatory capture with policies that protect incumbent interests.
Many net neutrality opponents also oppose telecom common carrier regulations and regulated transparency to customers. Conversely, not all net neutrality proponents emphasize transparency to customers, and most proponents do not phrase net neutrality in terms of existing telecom carrier restrictions even when the desired state is equivalent. In many cases, a return to treating internet service links as telecommunication rather than information carrier services would re-invoke sufficient restrictions on discrimination and refusal to carry to satisfy most definitions of net neutrality. It would also return the carriers to the conditions of limited liability that were in part breached by the 2005 FCC decision that DSL services are information services not telecom services, and thus not subject to common carrier rules.
An alternate position is the 'Third Way', proposed by then-FCC Commissioner Julius Genachowski, which would have narrowly reclassify internet access as a telecommunication service under Title Two of the Communications Act of 1934. It would apply only six  common carrier rules under the legal principle of forbearance that would sufficiently prevent unreasonable discrimination and mandate reasonable net neutrality policies under the legally sound concept of common carriage. Incumbent internet service providers such as AT&T have opposed the idea saying that common carrier regulations would "cram today's broadband Internet access providers into an ill-fitting 20th century regulatory silo" while parties like Google have stated "In particular, the Third Way will promote legal certainty and regulatory predictability to spur investment, ensure that the Commission can fulfill the tremendous promise of the National Broadband Plan, and make it possible for the Commission to protect and serve all broadband users, including through meaningful enforcement". 
A number of net neutrality opponents have created a website called Hands Off The Internet to explain their arguments against net neutrality. Principal financial support for the website comes from AT&T, and members include technology firms such as Alcatel, 3M and pro-market advocacy group Citizens Against Government Waste.   Corporate astroturfing is alleged. For example, one print ad seems to frame the Hands Off the Internet message in pro-consumer terms. "Net neutrality means consumers will be stuck paying more for their Internet access to cover the big online companies' share," the ad claims.
Some of the arguments associated with net neutrality regulations came into prominence in mid-2002, offered by the "High Tech Broadband Coalition", a group comprising developers for Amazon.com, Google, and Microsoft. However, the fuller concept of "net neutrality" was developed mainly by regulators and legal academics, most prominently law professors Tim Wu and Lawrence Lessig and Federal Communications Commission Chairman Michael Powell most often while speaking at the Annual Digital Broadband Migration conference or writing within the pages of the Journal of Telecommunications and High Technology Law, both of the University of Colorado School of Law. However, the ideas underlying net neutrality have a long pedigree in telecommunications practice and regulation.
Proposals for net neutrality laws are generally opposed by the cable television and telephone industries, and some network engineers and free-market scholars from the conservative to libertarian, including Christopher Yoo and Adam Thierer. Opponents argue that (1) net neutrality regulations severely limit the Internet's usefulness; (2) net neutrality regulations threaten to set a precedent for even more intrusive regulation of the Internet; (3) imposing such regulation will chill investment in competitive networks (e.g., wireless broadband) and deny network providers the ability to differentiate their services; and (4) that network neutrality regulations confuse the unregulated Internet with the highly regulated telecom lines that it has shared with voice and cable customers for most of its history.
By late 2005, net neutrality regulations were included in several Congressional draft bills, as a part of ongoing proposals to reform the Telecommunications Act of 1996. They would generally require Internet providers to allow consumers access to any application, content, or service. However, important exceptions allow providers to discriminate for security purposes, or to offer specialized services like "broadband video" service. These regulations generally forbid ISPs from offering different service plans to their customers.
In April 2006, a large coalition of public interest, consumer rights and free speech advocacy groups and thousands of bloggers -- such as Free Press, People for the Ethical Treatment of Animals, American Library Association, Christian Coalition of America, Consumers Union, Common Cause and MoveOn.org -- launched the SavetheInternet.com Coalition, a broad-based initiative working to "ensure that Congress passes no telecommunications legislation without meaningful and enforceable network neutrality protections." Within two months of its establishment, over 1,000,000 signatures were delivered to Congress in favor of a net neutrality policies. By the end of 2006, SavetheInternet.com had collected more than 1.5 million signatures effectively stalling legislation in Congress that didn't write Net Neutrality protections into law.
The two proposed versions of "neutrality" legislation to date would prohibit: (1) the "tiering" of broadband through sale of voice- or video-oriented Quality of Service packages; and (2) content- or service-sensitive blocking or censorship on the part of broadband carriers. These bills have been sponsored by Representatives Markey, Sensenbrenner, et al., and Senators Snowe, Dorgan, and Wyden.
The following legislative proposals have been introduced in Congress to address the net neutrality question:
|Title||Bill number||Date introduced||Sponsors||Provisions||Status|
|109th Congress of the United States (January 2005 – January 2007)|
|Internet Freedom and Nondiscrimination Act of 2006||S. 2360||March 2, 2006||Senator Ron Wyden (D-Oregon)||Prohibits blocking or modification of data in transit, except to filter spam, malware, and illegal content; mandates common-carrier rules for subscriber network operators.||Killed by the end of 109th Congress.|
|Communications Opportunity, Promotion and Enhancement Act of 2006||H.R. 5252||March 30, 2006||Representative Joe Barton (R-Texas and Chairman of the House Commerce Committee)||Proposes to create a national franchise for video providers, and additionally addresses net neutrality, e911, and municipal broadband.||Passed 321-101 by the full House of Representatives on June 8, 2006- but with the Network Neutrality provisions of the Markey Amendment removed. Bill killed by end of 109th Congress.|
|Network Neutrality Act of 2006||H.R. 5273||April 3, 2006||Representative Ed Markey (D-Massachusetts)||Amends the Communications Opportunity, Promotion, and Enhancement Act of 2006 (COPE) to make its existing neutrality provisions more strict.||Defeated 34-22 in committee with Republicans and some Democrats opposing, most Democrats supporting.|
|Communications, Consumer’s Choice, and Broadband Deployment Act of 2006||S. 2686||May 1, 2006||Senators Ted Stevens (R-Alaska) & Daniel Inouye (D-Hawaii)||Aims to amend the Communications Act of 1934 and addresses net neutrality by directing the Federal Communications Commission (FCC) to conduct a study of abusive business practices predicted by the Save the Internet coalition and similar groups.||Sent to the full Senate in a 15-7 committee vote and defeated by the Senate Committee on Commerce, Science, & Transportation on June 28, 2006. Killed by the end of 109th Congress.|
|Internet Freedom and Nondiscrimination Act of 2006||H.R. 5417||May 18, 2006||Representatives Jim Sensenbrenner (R-Wisconsin) & John Conyers (D-Michigan)||Makes it a violation of the Clayton Antitrust Act for broadband providers to discriminate against any web traffic, refuse to connect to other providers, block or impair specific (legal) content; prohibits the use of admission control to determine network traffic priority.||Approved 20-13 by the House Judiciary committee on May 25, 2006. Killed by the end of 109th Congress.|
|110th Congress of the United States (January 2007 – January 2009)|
|Internet Freedom Preservation Act (casually known as the Snowe-Dorgan bill)||S. 215 (110th Congress) formerly S. 2917 (109th Congress)||January 9, 2007||Senators Olympia Snowe (R-Maine) & Byron Dorgan (D-North Dakota), Co-Sponsors: Barack Obama (D-Illinois), Hillary Clinton (D-New York), John Kerry (D-Massachusetts) and other Senators||Amends the Communications Act of 1934. Introduces a ban on the blocking/degradation of lawful content, forbids tying Internet access to purchase further services, and a ban on QoS deals between network providers and specific content providers. However, it still allows prioritizing content as long as it origins from the provider's own network, see Sec. 12 (a) (5). Makes the FCC responsible for enforcing complaints and conducting reports on the state of the broadband market.||Read twice and referred to the U.S. Senate Committee on Commerce, Science, and Transportation.|
|Internet Freedom Preservation Act of 2008||H.R.3458||February 12, 2008||Representatives Edward Markey (D-Massachusetts) & Charles Pickering (R-Mississippi)||To establish broadband policy and direct the Federal Communications Commission to conduct a proceeding and public broadband summits to assess competition, consumer protection, and consumer choice issues relating to broadband Internet access services, and for other purposes.||Introduced to the House Energy and Commerce Committee|
|112th Congress of the United States (January 2011 – January 2013)|
|Data Cap Integrity Act of 2012||S. 3703||December 20, 2012||Senator Ron Wyden (D-Oregon)||To improve the ability of consumers to control their digital data usage, promote Internet use, and for other purposes.||Read twice and referred to the Committee on Commerce, Science, and Transportation.|
|(D) = a member of the House or Senate Democratic Caucus; (R) = a member of the House or Senate Republican Conference|
Congressman Adam Schiff (D-California), one of the Democrats who voted for the Sensenbrenner-Conyers bill, said: "I think the bill is a blunt instrument, and yet I think it does send a message that it's important to attain jurisdiction for the Justice Department and for antitrust issues."
Although no new bills regulating net neutrality have been introduced in the 111th Congress, Senator Dorgan (D) was reportedly preparing a bill in December 2008. In any case, net neutrality bills are referred to the Senate Committee on Commerce, Science, and Transportation. The Committee Chair, Rockefellar (D) has expressed caution about introducing unnecessary legislation that could tamper with market forces; therefore it is unlikely to pass. In the House, Representative Markey (D) has also discussed reintroducing a net neutrality bill. For 2009, Rep. Markey has reintroduced it.
Opposition to legislation
Given a rapidly-changing technological and market environment, many[who?] in the public policy area question the government's ability to make and maintain meaningful regulation that doesn't cause more harm than good.[vague]
For example, fair queuing would actually be illegal under several proposals[which?] as it requires prioritization of packets based on criteria other than that permitted by the proposed law.[dubious ] Quoting Bram Cohen, the creator of BitTorrent,"I most definitely do not want the Internet to become like television where there's actual censorship... however it is very difficult to actually create network neutrality laws which don't result in an absurdity like making it so that ISPs can't drop spam or stop... attacks." The Internet Freedom Preservation Act of 2009 excludes reasonable network management from regulation, although because it doesn't contain any language or technical specifications to describe such management schemes, it remains unclear the degree of autonomy network operators would have in managing traffic.
The Wall Street Journal believes that: "Government’s...role here, properly understood, is not to tell Comcast how to manage its network. Rather, it is to make sure consumers have alternatives to Comcast if they are unhappy with their Internet service." This is despite the fact that the overwhelming majority of residential consumers subscribe to Internet access service from 1 of only 2 wireline providers: the cable operator or the telephone company, something cannot be changed by the FCC, (who had called the hearing) but could be changed by Congress with the Broadband Conduit Deployment Act, and/or with the promotion of municipal broadband.
George Mason University fellow Adam Thierer has argued that "any government agency or process big enough to control a major sector of our economy will be prone to influence by those most affected by it," and that consequently "for all the talk we hear about how the FCC's move to impose Net Neutrality regulation is about 'putting consumers first' or 'preserving Net freedom and openness,' it's difficult to ignore the small armies of special interests who stand ready to exploit this new regulatory regime the same way they did telecom and broadcast industry regulation during decades past."
In her recently published research, Aparna Watal, Legal Officer at Attomic Labs, puts forward three reasons for resisting any urge "to react legislatively to the apparent regulatory crisis". Firstly, she explains, "contrary to the general opinion, the Comcast decision does not uproot the Commission’s authority to regulate ISPs. Section 201(b) of the Act, which was cited as an argument by the Commission but not addressed by the Court on procedural grounds, could grant the Commission authority to regulate broadband Internet services where they render “charges, practices and regulations for, and in connection with” common carrier services unjust and unreasonable." Secondly, she suggests, it is "undesirable and premature to legislatively mandate network neutrality or for the Commission to adopt a paternalistic approach on the issue...[as] there have been few overt incidents to date, and the costs of those incidents to consumers have been limited."  She cites "prompt media attention and public backlash" as effective policing tools to prevent ISPs from throttling traffic. She suggests that it "would be more prudent to consider introducing modest consumer protection rules, such as requiring ISPs to disclose their network management practices and to allow for consumers to switch ISPs inexpensively, rather than introducing network neutrality laws." Finally, she explains that while "by regulating broadband services the commission is not directly regulating content and applications on the Internet; however, to say that content will remain unaffected by the reclassification is inaccurate. The different layers of the Internet work in tandem with each other such that there is no possibility of throttling or improving one layer’s performance without impacting the other layers. If that was the case, then network neutrality would be maintained regardless of what happened at the transmission layer. To let the Commission regulate broadband pipelines connecting to the Internet and disregard that it indirectly involves regulating the data that runs through them will lead to a complex, overlapping, and fractured regulatory landscape in the years to come."
For over ten years ISPs, have offered unlimited data transfer at a specified maximum download/upload speed at a monthly rate. This pricing model helped ISPs to capture market share and quickly grow demand for high-speed internet access during the 1990s. Content providers or businesses could also purchase unlimited data transfer at a flat-rate, a practice that has become an industry standard.
Some ISPs like AT&T and Verizon have argued that providing varying levels of service to websites at various prices could be a way to manage the costs of unused capacity. It will allow selling surplus bandwidth (or "leverage price discrimination to recoup costs of 'consumer surplus'") by moving them to the content providers. However, purchasers of connectivity on the basis of Committed Information Rate or guaranteed bandwidth capacity must expect the capacity they purchase in order to meet their communications requirements.. This would effectively create a 'tiered' internet that will violate some conceptions of net neutrality.
Other ISPs are trying to move to usage-based pricing models. Time Warner Cable, attempted to introduce "consumption based billing" with caps on internet usage much like the model used in the mobile phone industry. They offered packages of 10GB, 20GB, 40GB, and 60GB with $1 overage charges capped at $75 a month. It was met with massive public disapproval and on April 16, 2009, Time Warner was forced to abandon their plan.
The industry is currently looking for alternative pricing models that will be accepted by the market.
Originally, the Internet was not legally available for commercial use. It became available in the late 1980s.
In the late 1990s and early 2000s, consumers and businesses began to attach new devices to their Internet connections, and use Internet services that were not in existence in the mid-1990s.
One reaction of many broadband operators was to impose various contractual limits on the activities of their subscribers. In the best known examples, Cox Cable disciplined users of virtual private networks (VPNs) and AT&T, as a cable operator, warned customers that using a Wi-Fi service for home-networking constituted "theft of service" and a federal crime. Comcast blocked ports of VPNs, forcing the state of Washington, for example, to contract with telecommunications providers to ensure that its employees had access to unimpeded broadband for telecommuting applications.
These early instances of "broadband discrimination" prompted both academic and government responses. In the early 2000s, legal scholars such as Tim Wu and Lawrence Lessig raised the issue of neutrality in a series of academic papers addressing regulatory frameworks for packet networks. Wu in particular noted that the Internet is structurally biased against voice and video applications.
Federal Communications Commission Chairman Michael Powell in 2004 announced a new set of non-discrimination principles, which he called the principles of "Network Freedom." In a speech at the Silicon Flatirons Symposium in February 2004, Powell stated that consumers must have the following four freedoms:
- Freedom to access content.
- Freedom to run applications.
- Freedom to attach devices.
- Freedom to obtain service plan information.
As remarked upon by David Isenberg, Chairman Kevin Martin later modified these four freedoms to read:
- 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; and
- Consumers are entitled to competition among network providers, application and service providers, and content providers.
On August 5, 2005, the FCC adopted a policy statement stating its adherence to these principles.
Under pressure from the FCC and consumer groups, the broadband operators generally relaxed their most glaring restrictions on network usage.
In early 2005, in the Madison River case, the FCC for the first time showed a willingness to enforce its network neutrality principles by opening an investigation about Madison River Communications, a local telephone carrier that was blocking voice over IP service. While it is often thought that the FCC fined Madison River Communications following the investigation, it did not. The investigation was closed before any formal factual or legal finding. Instead, there was a settlement in which the company agreed to stop discriminating against voice over IP traffic and to make a $15,000 payment to the US Treasury in exchange for the FCC dropping its inquiry. Since the FCC did not formally establish that Madison River Communications violated laws and regulation, the Madison River settlement does not create a formal precedent. Nevertheless, the FCC's action established that it would not sit idly by if other US operators discriminated against voice over IP traffic.
On 1 August 2008, the FCC formally voted 3-to-2 to uphold a complaint against Comcast, the largest cable company in the US, ruling that it had illegally inhibited users of its high-speed Internet service from using file-sharing software. The FCC imposed no fine, but required Comcast to end such blocking in the year 2008. Then-FCC chairman Kevin J. Martin said the order was meant to set a precedent that Internet providers, and indeed all communications companies, could not prevent customers from using their networks the way they see fit unless there is a good reason. In an interview Martin stated that “We are preserving the open character of the Internet” and “We are saying that network operators can’t block people from getting access to any content and any applications.” The case highlighted broader issues of whether new legislation is needed to force Internet providers to maintain network neutrality, i.e. treat all uses of their networks equally. The legal complaint against Comcast related to BitTorrent, software that is commonly used for downloading movies, television shows, music and software on the Internet.
As of April 6, 2010, the FCC’s 2008 cease and desist order against Comcast (due to Comcast’s efforts to slow, and stop BitTorrent transfers) has been denied. The U.S. Court of Appeals ruled that the FCC has no powers to regulate any Internet provider’s network, or the management of its practices: “[the FCC] ’has failed to tie its assertion’ of regulatory authority to an actual law enacted by Congress.”
Regulatory history of broadband
In the United States, broadband services were historically regulated differently according to the technology by which they were carried. While cable Internet has always been classified by the FCC as an information service free of most regulation, DSL was once regulated as a telecommunications service subject to unbundling requirements. As the two types of networks have increasingly provided the same services, it has become difficult to justify different sets of rules, leading to the question of which rules should apply to both.
Towards the end of 2004, the US legal system voided the rules requiring telephone operators to unbundle certain parts of their networks at regulated prices, which had as a consequence the economic collapse of many competitors in access services.
In the U.S., DSL and cable Internet access were formerly regulated by the FCC according to different rules, but in 2005 the FCC re-classified DSL according to the more permissive cable rules  which was the same year that the US Supreme Court in Brand X upheld the classification of cable Internet access as an information service.
An additional regulatory complexity is that cable operators and telephone operators are competing beyond broadband Internet access: cable operators by providing telephone service, and telephone service providers by upgrading their networks with FTTX in order to provide enough bandwidth to support television services.
Advocates of network neutrality wish to re-classify both under the old rules for DSL, which require unbundling and several other restrictions.
Towards the end of 2009, FCC Chair Julius Genachowski announced at the Brookings Institute a series of proposals that would prevent telecommunications, cable and wireless companies from blocking certain information on the Internet, for example, Skype applications. Some in the industry, such as David Young of Verizon Communications, consider the proposal to be the first rules for the internet imposed by the U.S. government.
On December 21, 2010, the FCC voted on and passed a set of net neutrality principles:
1. Transparency: Consumers and innovators have a right to know the basic performance characteristics of their Internet access and how their network is being managed;
2. No Blocking: This includes a right to send and receive lawful traffic. This prohibits the blocking of lawful content, apps, services and the connection of non-harmful devices to the network;
3. Level Playing Field: Consumers and innovators have a right to a level playing field. This means a ban on unreasonable content discrimination. There is no approval for so-called "pay for priority" arrangements involving fast lanes for some companies but not others;
4. Network Management: This is an allowance for broadband providers to engage in reasonable network management. These rules don't forbid providers from offering subscribers tiers of services or charging based on bandwidth consumed;
5. Mobile: The provisions adopted today do not apply as strongly to mobile devices, though some provisions do apply. Of those that do are the broadly applicable rules requiring transparency for mobile broadband providers and prohibiting them from blocking websites and certain competitive applications;
6. Vigilance: The order creates an Open Internet Advisory Committee to assist the Commission in monitoring the state of Internet openness and the effects of the rules.
These measure have been denounced by net neutrality advocates as a capitulation to telecommunication companies such as allowing them to discriminate on transmission speed for their profit, especially on mobile devices like the iPad, while pro-business advocates, especially in the Republican Party, complain about any regulation of the internet at all.
Legal definition in AT&T/Bell South merger
The AT&T/Bell South merger agreement defines net neutrality as an agreement on the part of the broadband provider: "not to provide or to sell to Internet content, application or service providers ... any service that privileges, degrades or prioritizes any (data) packet transmitted over AT&T/BellSouth’s wireline broadband Internet access service based on its source, ownership or destination." 
Complicating the discussion is the practical reality that the Internet is a highly federated environment composed of thousands of carriers, many millions of content providers and more than a billion end users - consumers and businesses. Prioritizing packets is complicated even if both the content originator and the content consumer use the same carrier. It is much less reliable if the packets have to traverse multiple carrier networks, because the packet getting "premium" service while traversing network A may drop down to non-premium service levels in network B.
Further, the discussion has been very U.S.-centric and very terrestrial-network centered, even though the Internet is inherently global and mobility is the fastest growing source of new demand.
The immediate debate over "neutrality" does not capture the many dimensions of this topic; for example, should voice packets get higher priority than packets carrying email? Or, should emergency services, mission-critical, or life-saving applications, such as tele-medicine, get priority over spam?
Alternatives to cable and DSL
Much of the push for network neutrality rules comes from the lack of competition in broadband services. For that reason, municipal wireless and other wireless service providers are highly relevant to the debate. If successful, such services would provide a third type of broadband access with the potential to change the competitive landscape. For similar reasons, the feasibility of broadband over powerline services is also important to the network neutrality issue. However, as of the Spring of 2006, deployments beyond cable and DSL service have created little new competition.
Cable companies, in response to this threat, have lobbied Congress for a federal preemption to ban states and municipalities from competing and thereby interfering with interstate commerce. However, there is current Supreme Court precedent for an exception to the Commerce Power of Congress for states as states going into business for their citizens.
It has been argued, however, that neither municipal wireless nor other technological solutions such as encryption, onion routing, or time-shifting DVR would be sufficient to render possible discrimination moot.
3GPP cellular networks provide a practical broadband alternative known as EVDO, which, along with WiMax, represents a fourth and fifth alternative. WiMax has been deployed in limited areas, and 3GPP in much wider ones.
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