Read part one here.

The first part of this article addressed the basic factors of the debate and provided a good platform for entering into this section (hint – go read it if you haven’t already!). In this section we examine the existing regulatory framework in the United States and European Union, and look at the options most likely to be enacted in the future. Exploration of the political paths leading to adoption of net-specific regulation are left to our colleagues in journalism, who happily are providing quite a lot of compelling content.

As a reminder of the current situation faced by both America and the European Union, we’ll begin with the following quote from the European Commission.

There are no clear rules on net neutrality today… leaving 96% of Europeans without legal protection for their right to access the full open internet. In Europe, both electronic communications providers and end-users face inconsistent rules, leading to uneven levels of protection and a variety of diverging rules in different Member States. This fragmentation is costly for operators, unsatisfactory for end-users, hinders the provision of services across borders and negatively impacts end-users’ willingness to consume them.

In other words, our starting point is almost a complete lack of government internet regulation. While some would prefer to keep it this way, it is important to remember that having no regulation is not equivalent to users enjoying unimpeded access. Rather it equates to each entity which controls infrastructure having complete power over how it is administered. Because the marketplace in which these companies operate is intrinsically monopolistic, based on the high investment required for entry and the traditional role of the government in supporting build-out, market forces cannot be considered a viable means for assuring delivery of optimal benefit. In this environment, examples of traffic management practice resulting in a weakening of competition, decreases in innovation, and degradation in quality of service are rampant.

These practices come in many forms, such as the denial and throttling of Peer-to-Peer (P2P) services and Voice over Internet Protocol (VoIP) (new competitors in the telecommunication space), and exploitation of online content providers, requiring money in exchange for adequate access. One of the most recent examples was covered in the first portion of this article and involves Netflix, whose content was slowed by one ISP over the course of several months to such an extent that Netflix ended up agreeing to pay “large” but undisclosed sums for faster content delivery. These and other similar maneuvers make companies with internet infrastructure web service kingmakers – sometimes even of themselves.

Based on these behaviors a dystopian future is not hard to imagine, one where the core of the democratized internet which provides an arena anyone can enter, knowing they will have a relatively equal opportunity of being heard, no longer exists. With this as the starting place, there are few who would disagree that some form of regulation is necessary. What that regulation should entail is the contested piece, and the US and EU each appear to be in the final stages before broad options are solidified into specific practice. Slightly simplifying the unlimited array of possibilities however is the fact that both territories are approaching the matter first from the standpoint of one overarching question, specifically, whether the internet should be regulated in the same manner that other telecommunications already are.

Covering intricacies of US and EU telecommunications regulations in one short article is literally impossible, however at their base the protocols in the two territories are remarkably similar. Both are primarily aimed at pre-internet services and utilize as their guide the same ethos which applies to other publicly-regulated private utilities such as electricity, natural gas and radio – namely, in exchange for providing broad and equal coverage over their infrastructure, companies are allowed some degree of monopoly. The reasons for this are straightforward, and require only a simple thought experiment to explain.

Imagine a country in which anyone could dig up the streets and lay telephone wires. Companies would be justifiably nervous about entering a marketplace where their investment might be undone overnight by a new competitor. This would result in service only being provided to the richest few and those who lived in the densest areas. Additionally, the streets would end up in a constant state of disrepair as individuals started and gave up on projects, or went bankrupt, and the bottom line would be inefficient use of resources and inadequate delivery of service: unsatisfactory for all parties.

One seemingly straightforward means of establishing internet regulation therefore is to declare it bound to the same laws already governing telecommunications. Under this scheme, companies would be required to deliver all legal internet content at equivalent rates, regardless of their source (net-neutrality). In the same way that a telephone service provider is not allowed to tell you which brand of telephone you need to own in order to access its wires, or to provide clear connections only to telephone makers which pay them kickbacks, so all websites would receive common treatment. This is essentially the option which President Obama is now supporting, and is at the core of the European commission’s proposal.

The primary complicating factors are two. Firstly, unlike telephones which require roughly equal telecom infrastructure per call-minute, different kinds of websites have vastly different bandwidth requirements. While loading a text document that takes an hour to read might take one megabyte, an hour of streamed video could easily necessitate 2000 times that amount. If all websites are promised equally speedy delivery, this results in a tyranny of businesses that demand higher bandwidth at the expense of a slowdown of the rest of the internet; a modern day free-rider problem. The second difficulty relates to consumers, who might prefer the option of choosing either a net neutral or a non-net neutral company depending on their personal usage. In this instance those who didn’t require significant bandwidth could enjoy reduced rates compared with those with more data intensive habits. Why should users whose primary online activity is checking email once a week, subsidize those sitting at home streaming and downloading all day?

This last point is the main focus of Angela Merkel, who has recently come out in support of a two-tiered system on the grounds that certain services such as police, or driverless cars or doctors using internet during surgery all need failsafe access, and that only with that assured should the rest of the bandwidth be distributed. Her stance on the situation confuses the issue by implying that net-neutrality correlates to all internet access being delivered at the same speed. Contrary to her statements, and those of many telecoms who tout similar rational, net neutrality has no effect on whether the user is able to pay more money for faster or more reliable data. On the user side, the marketplace is unaffected. Rather, net-neutrality only addresses whether content providers can be forced to pay for different rates of bandwidth being delivered to consumers relative to other websites, or to the possibility of services being blocked all together.

While divergent users will have different priorities, it can generally be agreed that the most open availability of services at the fastest speeds and lowest price is the ideal at the consumer level. The good news is that the internet is only at the middle of the beginning of its development, and whatever happens in the next year regarding regulations, it will continue to get faster and enjoy increased availability based on technological progress and the opening of untapped markets. Countries however which provide the best access in these areas and which protect new services, even if they compete with traditional telecoms, will enable their populations to develop the online tools of tomorrow, and thus enjoy the financial and influential benefits that accompany them. Getting to that point must incorporate some degree of net neutrality, because without it, development slows as overall infrastructure receives less pressure to improve.

What is politically possible is another matter, especially given that telecoms are powerful lobbying blocks and bring not only money but often personal access to media coverage as well. What is sure is that the longer these corporations continue under the current murky regulatory conditions, the less incentive there is to move forward developing the networks, services and websites of the future, and the more of a loss it is for us all.

In the United States the Federal Communications Commission (FCC), a semi-nonpolitical governance body has the last say regarding future regulation, and has promised to provide guidance in early 2015. In the European Union the path forward is still rocky, however both the Commission and Parliament have committed to addressing the issue head-on in the first half of 2015. Whether you live in one of these regions or not the issue is relevant because there is a very real chance that these decisions will have reverberations which reach the rest of the world, whether they are based on connections of policy or infrastructure. This is why it is important to stay abreast of developments and use the means available to you in order to push for the path your desire. Perhaps you could even start your own website. If you’re poor, now may be your best chance.