The Debate Over Network Neutrality in the EU and the USA

1. Introduction

Network neutrality (also known as net neutrality or Internet neutrality) refers to a general principle that Internet service providers (ISPs) should not control how their customers lawfully use the Internet. For example, the ISPs should not restrict any Internet traffic or charge differently for different types of traffic.

Ever since the commercialization of the Internet, there has been an extensive debate on whether the principle of network neutrality should be implemented in the law. The increased demand for video content is adding heat to the debate over network neutrality. The present article provides an overview of the arguments for (Section 2) and against network neutrality (Section 3). The article then outlines some of the key moments of the net neutrality debate in
the European Union and the United States (Section 4). Finally, a conclusion is drawn (Section 5).

2. Arguments for Network Neutrality

There are at least six arguments in favor of network neutrality.

First, network neutrality protects the right of freedom of speech. The reason is that network neutrality restricts ISPs from blocking or prioritizing content on the Internet. Countries that have not implemented the principle of network neutrality in their legislation often control or suppress the publishing or accessing of information on the Internet. For example, in China, the government uses a system that does not allow the residents of China to access certain online content. As a result, if an Internet user searches in Google or other search engines for the word "Tibetan independence," "democracy movements," or other blacklisted words, he or she will be redirected to a blank page stating "page cannot be displayed."

Second, ISPs have no right to control data transmitted between end-users. According to this argument, the network's only function is to move data, not choose which data to move. In this context, Vinton Cerf, a co-inventor of the internet protocol (IP), stated that "the Internet was designed with no gatekeepers over new content or services."

Third, network neutrality does not allow ISPs to restrict content and/or services provided by their competitors. As known, restrictions of competition may lead to increased prices of services and/or goods. For example, in 2009, Deutsche Telekom announced plans to prohibit the use of Skype over iPhones. Such a prohibition will harm the interests of consumers who can otherwise save money on calls by using Skype.

Fourth, the involvement of ISPs in determining what content or services reach consumers will stifle innovators. For instance, if Google can pay ISPs to deliver YouTube videos faster than other sources of Internet video, any startups offering better services than YouTube will have tremendous difficulties enter the online video market.

Fifth, network neutrality preserves the existing Internet standards. The reason is that, at present, the Internet runs on technical standards created by variety of organizations, such as the internet engineering task force (IETF). By using the existing Internet standards, computers, services, and software created by different companies can be integrated together. Without network neutrality, the Internet will be regulated by ISPs under standards chosen by them.

Sixth, network neutrality maintains the end-to-end principle. It "allows nodes of the network to send packets to all other nodes of the network, without requiring intermediate network elements to maintain status information about the transmission" (Daly, 2010). The principle allows people using the Internet to innovate free of any central control.

3. Arguments against network neutrality

There are at least three arguments against network neutrality.

First, the prioritization of bandwidth stimulates innovation because the ISPs can use the money paid for preferential treatment of Internet traffic to pay for the building of network infrastructure that would increase broadband access to more consumers. This argument is well implemented in Cisco's position regarding neutrality. An excerpt from Cisco's position can be found below.

"Cisco and other opponents of net neutrality regulation believe that this approach is unnecessary and potentially harmful. Many of the Internet's benefits come from its open nature and the ability of anyone to develop new and innovative devices and services that connect to it. Such innovation has created entirely new industries and has fostered competitive markets in Internet applications and equipment. Allowing broadband service providers to innovate freely and differentiate their networks will enable them to provide consumers with to enhanced service offerings and richer content."

Second, the recently added video sharing websites, such as YouTube (www.youtube.com), Vimeo (www.vimeo.com), and Vevo (www.vevo.com), take up a lot of bandwidth. According to Cisco, global Internet video traffic was 57 percent of all consumer traffic in 2012. The global Internet video traffic will be 69 percent of all consumer Internet traffic in 2017. This statistic does not include video exchanged through peer-to-peer (P2P) file sharing. Cisco states that the sum of all forms of video traffic, including P2P, will be in the range of 80 to 90 percent of global consumer traffic by 2017. In order to deal with the increased bandwidth requirements, ISPs will need to charge more high-bandwidth websites.

Third, network neutrality decreases the revenues earned by the ISPs. The decreased revenues of the ISPs increase the level of the employment and decrease GDP. Moreover, the decreased revenues of ISPs prevent them from deploying and maintaining networks, and improving them over time. In order to recoup the decreased revenues, the ISPs may charge their customers increased fees.

4. The Key Moments of the Network Neutrality Debate inthe European Union and the United States

The table below displays the recent developments related to network neutrality in the EU and the US. The list of developments is not exhaustive.

5. Conclusion

The debate on network neutrality in the EU and the US has been going on for years. There is no straightforward answer to the question whether or not network neutrality should be mandatory. On one hand, network neutrality guarantees the right of freedom of free speech, provides users with full control of their data, promotes the competition between ISPs, provides Internet startups with a greater chance to enter the market of online services, and preserves the existing Internet standards and the fundamental end-to-end principle.

On the other hand, mandatory network neutrality may decrease the revenues of ISPs and, thus, prevent them from expanding their Internet infrastructure. Moreover, mandatory network neutrality may prevent ISPs from meeting the increased bandwidth requirements. This is because ISPs would not be able to charge more for the high-bandwidth websites. A mandatory network neutrality may also decrease the revenues of the ISPs, which may lead to increase in the prices of the access to the Internet, lost jobs, and decreased GDP.

Therefore, any regulations concerning network neutrality should be based on an adequate balance between the different interests concerned. The developments related to network neutrality in the EU and the US presented in Sections 4 of this article clearly indicate the efforts of the EU and the US to find the aforementioned balance. Any major involvement of the ISPs in the way their customers lawfully use the Internet leads to a wave of social protests and initiates political discussions. In turn, any proposal for a mandatory network neutrality raises fears about excessive government intervention in the market of Internet services and unintended consequences on the players of that market.

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