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Ever since the Federal Communication Commission’s net neutrality rules went into effect earlier this year, we've been waiting for the other shoe to drop. The telecom industry and major internet service providers put considerable lobbying weight into stopping the FCC's new rules—anyone paying attention knew that the industry's initial loss wouldn't be the end of this saga.
And so it's now illegal for ISPs to slow down, block, throttle, or create "fast lanes" that privilege or discriminate against certain types of data. But telecoms still want to charge users as much as they can for data, and perhaps control what you’re watching. And it appears they have found a way to legally do so: data caps, combined with new, ISP-controlled services that don't count against those caps.
Over the last, say, 18 months or so, telecom companies have been ravenously snatching up and partnering with content creators. At first, it was easy to look at these acquisitions—Comcast investing in Vox and Buzzfeed, Verizon snatching up AOL, its ad network, and all of its media companies (Engadget, Huffington Post, etc)—merely as cable and telecom companies attempting to diversify in response to the potential economic crisis presented by cord cutters and people who never subscribed to cable networks in the first place.
But that’s too simple an interpretation. Instead, telecom is attempting to control the content, the means of getting it to you, and the advertising networks that support them.
And so, of course Comcast is piloting a streaming cable TV service, called Stream TV. And of course the data you consume while watching Stream TV won't count against your 300GB Comcast data cap for home internet.
So this is how net neutrality dies. Not with court battles, but with "free" data.
This practice is called "zero-rating," and on it’s face, it sounds like a boon for consumers. T-Mobile recently introduced “Binge On,” which lets you watch HBO Go, Netflix, and some other streaming videos without it counting against your data cap. But if you agree that the purpose of the FCC's net neutrality rules is to preserve both consumer choice and the open internet, well, it quite blatantly violates the spirit of those rules while not technically violating the actual regulations enacted.
"Zero-rating is pernicious; it’s dangerous; it’s malignant," Susan Crawford, codirector of Harvard's Berkman Center, wrote earlier this year. "Regulators around the world are watching how the US deals with zero-rating, and we should outlaw it. Immediately. Unless it’s stopped, it’s not going to go away."
So far, much of the conversation about zero-rating has centered around the developing world as Facebook and Wikipedia have launched programs that allow people with basic cell phone plans to access their services for free. Crawford spent much of that blog post arguing that zero-rating would prevent those in developing countries from freely accessing the open internet. How ironic, then, that the tactic is being used to do exactly that in the United States.
And these loopholes, this general data cap nonsense, is why increased internet competition is and always has been more important than net neutrality rules ever were or will be. Imagine the following scenario, which is or soon will be true for many, many people around the United States: Comcast is your only viable high-speed internet option, you are capped at 300 GB a month, and, now, the kicker—Comcast's Stream TV offers, say, 75 percent of what you would normally watch on Netflix or Hulu or Amazon Prime.
Competition is the only way a free and open internet will persevere.
Is it worth it to you to pay Comcast's overage fees to watch the new season of House of Cards? Maybe, I guess. But more likely, you'll watch whatever Comcast wants you to watch, which will include a slate of whatever content it exclusively controls via the likes of BuzzFeed or Vox.
But what if, in the above scenario, you had the option to go with a different carrier? Or multiple different carriers? Or maybe even a community-backed municipal option? Suddenly, Comcast isn't so appetizing. Competition is the only way a free and open internet will persevere.
"Volume limits, or usage-based-billing ... can clearly be abusive in a marketplace in which users have no or little choice of carriers and there is no relationship between the cost of providing that capacity and the volume limits being imposed," Crawford wrote.
It's not just Comcast, of course. T-Mobile's "Binge On" plan—which allows access to Hulu, Netflix, HBO Now, and other streaming services (but not YouTube, for example, which is the problem)—is the exact same thing. So is Verizon's new Go90 mobile video network (VICE Media, Motherboard's parent company, is a Verizon partner in this endeavor).
While people like Crawford see these plans as potentially disastrous for the open web, the FCC doesn’t seem to agree. In fact, FCC Chairman Tom Wheeler said Thursday that plans like T-Mobile’s are exactly what he envisioned when he approved the rules earlier this year.
“It is clear in the Open Internet order that we are pro-competition and pro-innovation and clearly, this meets both of those criteria," he said. "It is highly innovative and highly competitive."
Update: The FCC has emailed me a statement: "The Commission staff is working to make sure it understands the new offering.”
So this is how the spirit of net neutrality dies. Not with court battles, but with "free" data that forces you into an ecosystem in which you watch Verizon-approved content with Verizon-delivered ads on the Verizon network or Comcast-approved content with Comcast-delivered ads piped through Comcast cable lines.