Thursday, 20 October 2016

Critical Analysis for Net Neutrality

Net neutrality emerged in a broadly fought against opinion, initiated by FCC’s Chairman Tom Wheeler in May 2014. His idea of allowing companies to apply charges and first priority to those companies that pay was widely opposed. In February 2015, new net neutrality rules were enacted that ensured an open and free internet. In Europe, the EU parliament enacted similar net neutrality rules that hinder charging online businesses. However, the EU’s Board did not articulate exactly as the FCC in USA; therefore, leaving an exception for some to be charged while others enjoyed net neutrality. The EU’s idea of Fast lanes and slow lanes also presents a giant loophole that gives freedom to the internet service providers to interfere with net neutrality. Actually, through introduction of fast lanes, new companies will have to struggle as the established companies reap from that loophole.

In the contemporary society, internet access ought to be considered a public good rather than its current condition of being a private good. The enactment of net neutrality laws in USA and Europe, seeks to make the internet a public good or necessity. Access to reliable internet by the general public is beneficial than the net benefit it offers to the private sector. Therefore, internet being a public good will enlighten the society in a cheaper manner and also neutralize the back breaking charges employed by the few internet providers.

Information ethics-part of antitrust regulation was one of the laws which were passed by United States to prevent unfair business operations and unwanted competitive behaviors. The rule was recommended for the purpose of promoting or encouraging spirit of competition in any market. The rule came into operation when it was realized that monopolists were taking control of the market late in 1800’s. After that, the policy has made tremendous amendments on the policy for the purpose of making it more efficient. Adoption of European Union’s BROAD net neutrality rules will help to scrap off internet providers who have been forming a cartel to charge business organizations fee for fast lanes in the beginning. The establishment of the rules was meant to encourage competition in the internet market so that there might many service providers. Presence of many service providers mean that the consumer which in our case are companies will have a choice between various options based on what service providers provide less charges.

Although competition is required for any economy that wants to prosper well, care must be taken to ensure that competitors are acting within the boundaries or limits set by authorities. Therefore, the government through the antitrust laws came up with means of controlling competition. The main reason as to why the government controls competition include preventing monopolies, setting up the required prices for commodities, preventing predatory activities, regulating the level of mergers and ensuring conformity in whatever is being advertised. Through the laws, there will be promotion of competition and provision of high quality services and products at an affordable price to the customers. The main agenda behind formation of these laws was to ensure that the manufacturers of products and services satisfied customers’ demands at level of price that was within their range. To achieve this objective, the laws have effected by the state government which has the control over the business transactions that take place. To promote a fair level of completion, there has been establishment of anti-monopoly laws which focus on four main areas. The areas include contractual business agreements between buyers and sellers, the pursuit of power of monopoly, mergers and business agreements between the competitors.

The rules seems close to those enacted by the United States congress but critics worry about the loopholes that the laws have not covered. Both the rules have serve the same purpose of ensuring the internet service providers are prevented from throttling traffic. Both EU and USA laws in relation internet have exceptions when it comes to “specialized services”. Zero-rating has also been adopted by both countries whereby the laws exempt particular internet services from counting against data caps. Both of them seems to work in tandem in relation to the work they were initially meant to do but tech companies like BitTorrent and WWW founder Sir Tim Berners-Lee have found a reason to criticize the European Union’s proposal. Their criticisms are based on the following;

Fast lanes and specialized services. The proposal prohibits paid prioritization or in other words fast lanes. This prohibition will mean that online service providers will be paying more than normal in order to access to consumers. On the other hand, for cases of specialized orders, there is an exemption. Under the proposal, it is referred to as “electronic communication services other than those meant for internet access under which particular level of quality other than those assured by Internet access services are important”. The opposite happens in US where the rules state that specialized services without any violation of the ban on paid prioritization.

The proposal also does not need a different capacity in case of specialized services and general access to internet. This must not be the case according to van Schewick. He says that having a separate capacity for specialized services is better than having them use the same capacity for the purpose of general access to internet.

Zero rating. The proposal of EU doesn’t ban zero rating which is also called sponsored data. This means that some contents may not count against the user data cap. This might bring in a problem as a mobile carrier may choose to promote its own particulars by accepting payment from other organizations that may require zero rated data.

There is also the issue of impending congestion whereby the ISPs will take control in case there is an impending congestion on the network. But now the problem is that there is no clear regulation on what ISPs is supposed to do in case of an impending network congestion.

To promote innovation in the market, it is important to allow various individual companies to engage other companies in provision of goods and services. One advantage in allowing this is to promote the concept of innovation into the economy. The new upcoming entrepreneurs will be able to come up with ways of either improving the already existing concept in the market, solving the problem that has been into the market for a long period of time or even sometimes come up with something unique that will change the entire industry. Encouragement or removal barriers will help to promote this concept. The end user who in our case is the customer will be the one to benefit more from this. Also, the initiative will help to promote the spirit of competition where companies will be struggling to on how to improve on their products. On the other hand, a free entry into the market may sometimes cause more troubles into the market balance. This is especially when the new entrants are only coming without making any changes instead what they do is just copy- pasting the already existing technology. Problems already existing into the market might remain unsolved and may lead to possible price wars.

In case the internet providers, large companies and small startup groups chooses to defy or act in contrary to the set laws to prove the ineffectiveness of the rules, the government will have to reconsider the rules the rules and come up with rules which in one way will not favor both the consumer or the provider of the services. Meanwhile, the service providers will continue to provide services based on previous policy before the application of the new laws.

Global perspective of Antitrust also on the hand tend to have some limitations in regards to its applicability. Allowing the domestic monopolists to abuse foreign customers is not a good move. This practice will discourage importation of goods and services between countries due to fears by customers of being abused by foreign monopolists. The practice will means also that the prices that will be charged on customers will depend whether they are foreigners or not. This will likely lead to price discrimination.

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