New: A daily newsletter defining what matters in business and markets

Stories

Why it matters: Net neutrality's demise

illustration of vending machine with logs of Google, Amazon, Facebook, Vimeo, Ebay and other tech companies
Illustration: Sarah Grillo/Axios

Net neutrality rules are getting wiped from the books on Monday — a move that starts a new chapter in the wonky regulatory debate while also attracting new mainstream attention outside of Washington.

Why it matters: The decade-long fight over how bits and packets should travel across the internet has fallen victim to political ping-pong between parties and industries. In Washington, net neutrality fatigue has set in as lobbyists begrudgingly take the battle to Capitol Hill. But as the internet plays an increasingly central role in peoples' lives, the rest of the country is starting to take notice.

Changes are going to come in fits and starts, but bear watching to see how far and how fast the telecom conglomerates push their new freedoms — and how that changes consumers' access and bills. All that makes this a good moment to review how we got here and why net neutrality has become both a rallying cry and a murky buzzword.

How we got here

Net neutrality refers to the concept that all internet traffic should be treated equally (or neutrally) by internet service providers, so that no type or source of content gets preferential treatment.

Tech vs telecom: The debate goes back to the early days of the internet, when tech startups raised the concern that internet service providers — the phone and cable companies that own the pipes that carry all those bits and bytes — could intentionally slow down some while speeding up others in order to extract a fee or favor their own web traffic.

  • The core debate today is still largely the same — even though, ironically, the telecom and tech industries have changed dramatically and depend on each other more than ever to reach consumers.
  • It's become even more complicated by a slew of telecom-media-tech mergers trying to combine the pipes that carry the traffic with must-watch programming in pursuit of eyeballs and advertising dollars.
  • And the question of whether broadband should be viewed as a "utility" — and therefore be more highly regulated — has further muddied the conversation.

The politics: Since the Bush administration, the Federal Communications Commission has gone back and forth on whether it can — and whether it should — oversee the flow of internet traffic. And Congress can't decide whether to intervene.

  • Telecom companies (Verizon, AT&T, Comcast) already deal with numerous regulations inherited from the phone era and don't want to be saddled with new ones. Republicans agree and argue that ISPs should be able to manage their networks how they see fit (within reason).
  • Democrats sided with the tech companies (Google, Facebook, Apple), who argue that net neutrality regulations are needed to prevent the ISPs from playing favorites or acting like internet toll booths.
  • At the start of the Trump administration, FCC Chairman Ajit Pai made clear he was going to dismantle Obama-era net neutrality rules, which were the strongest such rules ever adopted by the agency. That process concludes Monday, when the 2015 rules officially end.

What they're saying:

  • “It’s going to be better, faster, cheaper internet access for American consumers, and more competition," Pai said on Thursday when asked if the internet would be better or worse after the net neutrality rules end.
  • The internet companies disagree. "Americans in every state and across the political spectrum support rules that ban ISPs from blocking, throttling and prioritizing web traffic," said Michael Beckerman, who leads the Internet Association. He added that the industry "will continue to advocate for protections that allow Americans to access the entire internet, not a version curated by ISPs."

What's next

On Capitol Hill: Congressional Democrats are trying to over-rule the FCC and restore the net neutrality rules. Last month, the Senate passed a Resolution of Disapproval to undo Pai's repeal of net neutrality rules. Now the measure moves to the House, where it will be much harder for supporters to get enough votes to pass.

In the states: Some states are taking matters into their own hands.

  • Some governors, such as New York's Andrew Cuomo and Montana's Steve Bullock, signed executive orders to keep the rules in place within their state borders.
  • Others are pushing state legislatures to act. Oregon and Washington have already passed state laws to hold ISPs operating in those states to rules banning blocking, throttling and fast lanes.
  • Two weeks ago, California's state senate approved a bill that reinstates rules like those the FCC struck down. It also goes further by specifically banning ISPs from using "zero-rating" programs that allow certain content to not count against monthly data usage caps. Opponents fear service providers will use these programs to give content they own an edge over competitors. That bill now heads to California's State Assembly for a mid-June vote.

Upcoming elections: Since millennials and up-and-coming voters care about the internet on a deeper level than previous generations, Democratic lawmakers are trying to make net neutrality an election issue.

Go deeper:

More stories loading.