So Much for Net Neutrality: Web Giants Are Buying Up the Internet

In a blow to the concept of a neutral internet, it turns out Facebook, Google, Microsoft and other web giants have been paying broadband service providers millions of dollars in exchange for faster internet connections.

According to a Wall Street Journal report, the companies are skirting the Federal Communications Commission’s “Open Internet” policy in order to finagle preferential treatment from broadband carriers like Comcast, Time Warner Cable and Verizon.

The internet is growing at warp speed, and the size of the data we’re sending around is getting loads bigger—it takes a lot of bandwidth to stream a whole season of Mad Men without the dreaded “buffering” interruption. Demand is rising, and it’s giving the companies that hold the supply a whole lot of power. 

And where there’s power, there’s a way to make an extra buck. The Journal reports that Comcast was paid around $30 million and Time Warner Cable “tens of millions” from the web behemoths. It’s not that that’s a ton of money, relatively speaking. What’s so unsettling about these elitist side deals is that they’re perfectly legal under the current FCC rules, which throws the Pandora’s box of net neutrality wide open.

If broadband providers dealt out faster connections to the Googles and Facebooks of the world, who could afford to make it worth their while, but not, say, a scrappy startup trying to get off the ground or a worthy nonprofit strapped for cash, it would compromise the very open and equal ethos that makes the internet a transformative equalizer in an increasingly corporate world.

As competition among web companies increases, the dog-eat-dog mentality is challenging this romantic view of the open web. If Microsoft pays Verizon off for faster broadband, Google has to too, to stay competitive. This is exactly the kind of thing net neutrality advocates dread.

Hence, in 2010 the FCC pushed for a law requiring service providers give equal speed to all their customers, but a federal court struck the request down, saying the government lacks that level of authority.

This is why Comcast is within its legal rights when it decides streaming its own on-demand videos via the Xbox won’t count against its monthly data caps, because the traffic doesn’t travel over the public internet, the way content from HBO Go or Netflix has to. 

Or why AT&T can reserve part of its broadband access for its IPTV service, making sure other internet traffic doesn’t interfere. Or why ESPN is currently negotiating with at least one major wireless carrier to pay out in exchange for special exemptions from broadband data caps for its users.

Netflix is at the center of the fight. Broadband carriers like Comcast and Time Warner Cable are selling TV cable packages as well as the internet access that makes online video competitors like Netflix and Hulu function. Conflict of interest, anyone? It’s clearly in cable companies’ best interest to slow connectivity for the online video sites—which also happens to be exactly what Verizon, which owns Netflix-competitor Redbox, was accused of doing just last week.

All this preferential treatment spells out the danger of giving too much power to the companies that dole out the internet. (Thus, the Department of Justice is investigating cable providers for anti-competitive practices.)

In the meantime, the Journal reports that broadband carriers now want Netflix to pay extra like their buddies Google and Facebook for better connectivity. The way the service providers see it, if your company’s content needs are extra big, it’s only fair to pay extra big bucks.

These deals nonetheless circumvent the vague language of the FCC’s Open Internet rules, which state:

No Unreasonable Discrimination: Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. The no blocking and no unreasonable discrimination rules are subject to limited exceptions for “reasonable network management.”

Google, Microsoft and Facebook are connecting directly to the carriers’ networks, and so aren’t going through “a consumer’s broadband Internet.” With this logic, theoretically, the carriers could start charging anyone. Everyone!

The irony is not lost. As the FCC stated last year, the more preferential treatment giants like Google and Facebook manage to get, “the next Google or Facebook might never begin.”