The internet-streaming mogul Netflix announced plans last week to spend $800 million on financing the development of more original content. For fans of such hits as Stranger Things and Narcos, this news is music to their ears. However, it underscores the hurdles such content providers are beginning to grapple with. Netflix CEO Reed Hastings spoke at the Wall Street Journal Live Conference recently, highlighting the importance of net neutrality in the merger between AT&T and Time Warner. As the parent company of HBO, and a competitor of Netflix, Time Warner is primed to use the merger to its benefit in controlling users’ online experiences.
Net neutrality is becoming something of a buzzword lately, but for the unaware, it means that in an ideal world, internet service providers will not be able to block or manipulate the data they provide to favor certain websites and curate traffic toward their partnered websites. For Netflix and other big-data sites, net neutrality is a looming issue that could compromise the innovation that has been a cornerstone of the internet from the beginning. More importantly, though, is that the threat to net neutrality is already here.
In 2015, T-Mobile introduced consumers to Binge On, a service allowing their customers to stream unlimited content from partnered sites without it affecting their data cap. While this seems like a great plan for the consumer, it introduces an issue for competitors. This service only applies to partnered websites, such as Hulu and Netflix. Other websites such as YouTube, let alone smaller start-ups, aren’t apart of the coalition. T-Mobile even confirmed that users will experience slower downloads from websites that don’t participate in Binge On. In other words, if your website isn’t partnered with T-Mobile, you stand to lose website traffic.
Complaining about slow internet speeds may sound like the perennial first-world problem, but it’s a much more nuanced issue than inhibiting entertainment. Offering consumers a data-cap exemption for one site, while throttling the downloads from another, creates a situation in which ISPs can impede competitors from carving out a market share, or even prevent an innovative new streaming service from emerging into the market altogether. Competition in the marketplace is critical to keeping prices low for consumers and is a fundamental aspect of a healthy capitalist economy. Without it, the incentive to improve products and services for the consumer dwindles. Even more worrisome, though, is the effect that losing net neutrality can have on the availability of information, a key component to an engaged and educated electorate.
A 2014 report by the United States Commerce Department found that only 37 percent of Americans had access to two or more ISPs at download speeds of 25Mbps, a common speed if you’re interested in streaming or live in a multi-person household. Furthermore, at that speed, only 9 percent of Americans had access to three or more service providers. A lack of competition among internet providers means that there is room for manipulation, not only in terms of the entertainment industry, but also the news.
While the journalism industry is certainly going through some growing pains at the moment, the promise of digital news and the delivery of that content is on the rise. More people are getting their news from sites such as Facebook and Twitter. If ISPs can control the sites we use to stream the latest binge-worthy television series, they can also control the sites we use to gather our news.
Amazon recently reported it will begin selling broadband internet services to the European market. This is because in many European countries, but not the US, older ISPs are required to grant newcomers access to the existing network of internet infrastructure. Instead, American markets force emerging competitors to build their own infrastructure, which is impractical and prevents them from participating at all. While many Americans would appreciate leaving the uncouth service of Comcast and their ilk, they’ll have to dream until better laws are made to deal with this emerging sphere of the market.
Kyle Rempfer is a sophomore government & politics and Russian major. He can be reached at krempfer@terpmail.umd.edu.
