In 2018, California established the gold standard of what states should be doing on net neutrality by passing a model law for other states to copy. So, naturally, that makes the job of any legislator truly interested in protecting net neutrality pretty easy: just copy and paste. But that did not happen in New York’s state legislature this week. State Senator Kevin Parker, the Senate Telecommunications Chairman, has instead introduced S. 8020; legislation that not only ignores critical net neutrality issues such as zero rating, but it would legalize paid prioritization by Internet Service Providers (ISPs).
Zero Rating Harms Low Income Users and Makes Everyone’s Broadband More Expensive
Wireless ISPs eager to shape user traffic and give an anti-competitive advantage to their own content offerings engage in zero rating—the practice of exempting content chosen by ISPs from counting toward an account’s data cap. The Federal Communications Commission in the final days before the repeal effort of net neutrality began taking extraordinary steps to shut down investigations into ISP practices and rescind government findings that the zero-rating practices of AT&T had, in fact, violated the 2015 Open Internet Order.
When the fight to restore net neutrality came to California, organizations that advocate for the interest of low-income people fought hard to protect low-income users with zero-rating protections in the law. In hopes of preserving their anti-competitive conduct, AT&T issued phony studies about how zero rating was good for people and then later resorted to robocalling senior citizens about rising phone bills if the state passed net neutrality. But legislators in Sacramento saw through the ruse and enacted these protections. But, here’s the thing: zero-rating protections don’t only help low income users, they actually lower everyone’s wireless broadband bills. A comprehensive study in the EU that compared wireless broadband bills before and after countries prohibited discriminatory zero-rating practices found that countries with protections like California’s had lower bills. Not only that, Internet competition also improved. Without these protections, only large tech companies could engage zero-rating negotiations with several ISPs, hurting smaller technology companies that lacked the resources to strike multiple deals.
Paid Prioritization is Inherently Anti-Competitive and Favors Large Internet Companies
Paying the ISP to speed up your traffic—and effectively slow down their rivals—was categorically illegal under the 2015 Open Internet Order, and for good reason. But S. 8020 would give ISPs the right to engage in paid prioritization as long as the company believes it is good for Internet users. But there is no scenario, ever, that would justify allowing an ISP that is already compensated from user subscription fees such as your monthly cable bill, to pad their profits by giving preferential treatment to whichever companies pay them the most. Paid prioritization not only yields no discernible benefit to Internet users, it also advantages large corporations over small businesses, non-profits, and educational institutions unable to engage in a pay-to-play scheme.
So why legalize it?
It’s possible that the senator has bought into the myths ISPs like to share in favor of paid prioritization, such as claims that it is necessary for remote surgery (it isn’t) or that Content Delivery Networks (CDNs) are the same thing as ISPs. (They aren’t.) What is true is that far too many Americans are stuck behind monopoly access for their high-speed broadband choices, and that the future is leading towards more monopolization, not less. Giving companies that sell you an essential service the legal license to distort your Internet experience so they can extract rents from large Internet companies and disadvantage smaller Internet companies has no redeeming value. Arguably, the biggest lie the ISPs tell state legislatures is that they do not make enough money to pay for delivering broadband and therefore must charge Internet companies new fees. But it’s been nearly a decade since the cost of delivering one hour of HD video declined to less than a penny—a cost that’s continued to drop as network technologies improved. In other words, arguments in favor of additional fees are wholly unsupported by fact, and are merely the rent-seeking behavior of monopolists.
We are disappointed to see these behaviors promoted by S. 8020, and call on the state of New York to back a real net neutrality bill—one that protects consumers and promotes innovation, rather than one that protects the interests of powerful incumbents looking to pad their pockets.