The United States is in the middle of a decade-old debate on how to treat the internet. Some people believe that online access should be freely available to anyone if they can have access through an ISP of choice. There are also some that believe it should be a utility product that receives the same treatment that your power, water, and gas receive.
Although DSL and dial-up are not usually part of this conversation, broadband access is receiving significant attention. The Federal Communications Commission has wanted to reclassify it as a telecommunications service for a number of years, which would place this service under the regulation of the Communications Act of 1934.
If the decision to make the internet a utility goes through, then Americans (and any other nation making the same decision) would face a host of new local, state, and federal taxes and fees that would apply to the service. The total expenditure would total more than $15 billion, with the average person paying $67 more per month for landline broadband.
There are several pros and cons to consider when looking at the idea of turning the internet into a utility.
List of the Pros of the Internet as a Utility
1. It would give service providers more leverage to stop illegal content.
If net neutrality continues without any restrictions, then ISPs have little they can do to stop illegal content uploads or downloads. There is no say in what passes through the various servers and transfer mechanisms as people request content on their desktop, laptop, or mobile device. That makes it possible for sites like The Pirate Bay to thrive unless the government steps in to seize servers or domains. Making the internet a utility would make it easier to change how data delivery occurs, effectively shutting down pirating sites and other forms of illicit content because the speeds to them could be slowed to the lowest rate possible.
2. Regulations would stop the largest providers from controlling online access.
When the Obama administration first proposed the idea of turning the internet into a utility, the goal was to put some checks and balances on the largest ISPs operating in this space. Time Warner Cable, Verizon, and Comcast could all create a two-tier system that would funnel speeds into fast and slow lanes. If you want to pay the extra toll for faster speeds, then you could benefit under this proposed system. The government would stop this effort from taking place by creating regulations that stop it.
3. It would prevent companies from diminishing the quality of service from competitors.
Imagine that someone who subscribes to the internet through Comcast decides that they would to watch TV using Sling instead of Xfinity. Without regulations over speed adaptation, the ISP could purposely diminish the speeds from video-only services like Netflix or Disney that might try to lure even more customers away from them. It’s Netflix who is one of the primary proponents of changing the regulations governing internet access in the first place because of this very fear. Government regulations would stop anyone from diminishing the quality of service that consumers provide because all of the speeds would remain equal.
4. This legislation would stop the pay-to-play model that businesses currently run.
Did you know that Netflix already pays AT&T, Verizon, and Comcast an undisclosed fee that gives consumers more direct access to their networks? If the FCC were to adopt rules that would let the internet be treated as a utility, then this arrangement would become unnecessary. Everyone would have the option to connect to the internet in a way that suits them the best. That means you could get on cheaply while still accessing broadband speeds – or you could opt to pay a little more to get a boost for your personal needs or business.
Some critics argue that the legislation would limit choice, but it would create more options for consumers to enjoy. There would be some people who pay more, but there would also be the potential benefit of being able to pay less.
5. It would place low-quality websites in a separate category.
When FCC Commissioner Ajit Pai announced the desire to reclassify the internet from Title II carriers to Title I information services carriers, the goal is to create an infrastructure of access where apps and websites receive fair treatment based on the amount of access and value they provide to the end user. Under the current setup, the distribution of data is uneven although it is equal. That means a low-data website with little to offer are unfairly treated because they receive the same outcomes as a site that hogs a ton of bandwidth. Instead of creating more regulations, Pai argues that bringing the internet into the spectrum of utilities would deregulate it.
Fees would be charged based on what the market would accept. If prices were set too high, then consumers would abandon the internet to use alternative forms of information movement and communication.
6. This process could create local ownership opportunities.
If the internet were to become a utility, then it would likely be owned by the city that it serves. These businesses exist to provide a public service to the citizens of the community. Businesses and industries get to have access in a manner similar to that of the average resident. That means the provision of services, not the creation of profits, is the mission of the organization in charge of providing access.
The reason for this advantage is that the emphasis for utilities is to help achieve the long-term goals of each community. These companies provide the lowest cost and most reliable services to ensure that the greater good becomes achievable.
7. There would be local control over the internet.
Because most states allow communities to have local oversight over utilities, it is up to each town or district to determine how the services are provided to each household and business. That means the distribution system of the internet would fall to each city instead of relying on the ISPs to provide access. There would be more local resource matching for online access, special programs and incentives for those who qualify, and other unique advantages that are possible with municipal utilities that aren’t possible under the current structures that are in place through neutrality.
8. Access to the internet would become more reliable.
Although there are local offices for the larger ISPs in the United States, the response to an outage must go through the national center, reach the regional office, and then be distributed to the appropriate local providers or contractors. If the internet were to become a utility, then the local presence would provide a faster and more effective local response to this situation. You’d have access to the internet more reliably in an emergency situation because the company overseeing the internet locally would have people available to start the repair work immediately.
9. Turning the internet into a utility eliminates stockholder interest.
Municipal utilities operate for the benefits of city residents and not stockholders that might live thousands of miles away and have no interest in the community. Most ownership opportunities for utilities are local and private, which means there are fewer conflicts between customer interests and those who have money invested in the company structure. If the internet utility were to be publicly owned, then there would be zero conflict because the money spent on infrastructure would stay local.
Utilities make significant contributions and payments in lieu of paying taxes. Local ownership can create more jobs and provide additional resources for people to enjoy. It could even begin new economic development opportunities if the service provided for online access is far superior to that of a neighboring community.
List of the Cons of the Internet as a Utility
1. This idea would limit innovation from today’s entrepreneurs.
People are making money by working online because everyone has the same access to the content they need for success. You can implement cloud-based structures and other assets because the internet offers neutrality under its traditional structure. Moving it toward utility status would limit innovation because corporations could start restricting access to it unless the legislation authorizing such conduct was specifically geared toward equality. Neutrality allows small businesses to compete with the Walmarts of the world. Making it a utility would create more leverage for those with greater assets.
2. It could limit individual freedoms.
Anyone can legally operate a website, business, or blog online right now if they have permission to do so based on the rules of their jurisdiction. That means you might need a business license, some operating capital, or a profile on a platform like Fiverr to accept work. You have the power to post what you want or work when you want assuming that you’re following local guidelines. Moving the internet to a utility would nationalize this process, creating another layer of regulations that companies and individuals would need to meet before they could gain access to the same benefit that they already have today.
If small ISPs blocked access to every form of expression that they felt could be offensive to everyone, then there would be very little content to access online. Neutrality allows questionable items, but the law provides a remedy for those choices.
3. Internet regulation could threaten millions of jobs.
Broadband for America, which is an industry trade group, says that millions of jobs could be threatened in the United States if the government gets involved with the internet. There would no longer be an incentive to invest in projects that improve networks or expand into areas with little high-speed access because the costs of doing so would be so high. Although there is always a place for safety regulations in every industry, placing needless restrictions on ISPs to satisfy the needs of government control means it would cost more to receive less in a future where this outcome is possible.
4. The rules for internet regulation would be from a different era.
The government wants to put the internet as a utility under legislation that was passed during the Great Depression. The Telecommunications Act of 1934 was created at a time when only the biggest dreamers and sci-fi writers were thinking that the internet would become a possibility one day. At the very least, there would need to be updates to the legislation to ensure that online access received the regulations and oversight that is desired by this movement in the first place.
Because it is such an outdated law, organizations like Broadband for America compare the idea to the actions of the governments in Russia and China to gain more control over the content that people can access.
5. It would hold business owners hostage over the cost of the internet.
There are over 35 million workers in the United States who identify themselves as being part of the gig economy. That means most of them are working online, many of them every day, as they provide for their families. If the government were to make the internet a utility, then that’s an extra $60+ that would go toward business services instead of their rent, groceries, or bills. The idea that the market won’t support higher prices is false because so many people are wholly reliant on being connected today.
It might allow companies to charge higher fees to the high-data websites that they service, but consumers are going to pay more in additional costs through their ISPs and some of the companies with which they do business because of these issues.
6. It could limit infrastructure additions.
Utilities are generally something that municipalities use to offer access to needed items. If you want water or gas, then pipelines come from the city’s infrastructure straight to your home. You can receive a similar outcome living in a rural area, but you’d need to dig a well and maybe have a propane tank in the backyard. ISPs could decide to limit their access areas in a similar way, forcing rural customers to look for satellite internet or dial-up instead of having access to broadband resources.
7. There could be more residential caps on data use.
Ars Technica performed an examination of more than 2,500 home internet providers in 2017 and found that many of them already impose data limits on consumers. About 10% of them have regulations in place, although they might not enforce the rules consistently. Customers that go over their cap run the risk of paying overage fees because of the amount of data they use. The listed caps under the current infrastructure range from 3 GB to 3 TB. Large ISPs are more likely to use these limitations, often charging $10 for each extra block of data used. Comcast charges $50 more for an unlimited plan.
If the internet were to become a utility, then customers could see even more caps in place. You’d see speed caps based on the type of online access you want, with the cheapest plans giving you email, social media, and instant messaging access only.
8. Free internet access would go away if it were turned into a utility.
Some ISPs offer free access to the internet to consumers based on their household income, job status, or enrollment in schools. These options would likely disappear if the government is successful in turning it into a utility. Have you ever heard of homeowners receiving free water access each month? Do you receive your electricity without a cost unless you have solar panels or wind turbines in place?
This disadvantage means that more people would lose access to their internet access. At the very least, the speeds given to the free accounts would be much slower than what others would receive with paid subscriptions.
9. Customers will see price increases for their online service providers.
Netflix is already charging consumers more for original programming and the access they receive by paying for better network access. Imagine if the internet were turned into a utility and that forced the company to pay billions of dollars more in fees because of the amount of information they stream to consumers? That would cause prices to rise even more, and the only way to avoid the expense would be to stop your subscription to the service. We’d go back to the days when DVDs were the primary choice for movie purchases and rentals.
It is essential to remember that the number of business opportunities from digital-only enterprises has expanded rapidly in the era of net neutrality. In the last decade, we’ve seen movie distributors offer digital access to hit movies 3-6 weeks in advance of the traditional release. All of these conveniences would begin to disappear.
10. The internet as a utility could create slower access.
Companies that operate under governments that require significant bureaucratic requirements turn their poor services into an excuse. Even in places like Mexico, the time it takes to set up services for utility access is measured in days and weeks instead of hours. The FCC would slow things down in their regulations as well because that is the structure of the U.S. government. Americans believe a government that can move quickly is one that can take over a person’s life without permission. If the internet were to fall under the supervision of utility companies, the result would be the same.
11. American utilities are facing a slowing customer base.
People are trying to get away from traditional utilities instead of using their services more often. If you have a home that runs on electrical power, then a combination of solar panels and batteries can get you off of the grid without much difficulty today. People receive propane deliveries in the country when they’re not connected to a natural gas line. The internet would go through a similar transformation if it were forced to comply with the telecommunications legislation from the 1930s. It is a disadvantage where everyone will eventually pay more for the same service while seeing less overall innovation.
The pros and cons of having the internet be a utility depend on individual preferences. If you like the idea of having all content stream equally, no matter what its source happens to be, then you’re going to be against this idea. The individuals who like the idea of monetizing the internet in different ways to create online benefits for those who want it will prefer the idea of being able to prioritize specific forms of content.
There are times when regulations make sense, even on the internet. Almost everyone will agree that items like child pornography, murder videos, and terrorism propaganda should receive restrictions. Where disagreement occurs is when Netflix wants to sell different streaming plans through ISPs based on how much money homes are willing to spend.
How do you feel about the government wanting to put the internet under the same regulations as your electricity, telephone, or water services?
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