The Demise of the Open Internet: Consumer Choice in Peril

Stan Ward

Stan Ward

July 11, 2017

It’s ironic that the very part of the electorate that propelled Donald Trump into the Oval Office – those in between the populous coasts – stand to be harmed the most by the anti-net neutrality posture of his administration. ‘Trump Country’ is already at the mercy of a broadband/telecom industry that is loathe to go into the hinterland. Soon, they may find themselves further behind the communication curve if the Republican-controlled Federal Communications Commission (FCC) has its way.

As it stands, about 21% of US consumers have no high-speed landline broadband provider. Meanwhile, 37% have only one option. In the main, 88% of the country has either no option or just one provider. As a result, the open internet is in its death throes across much of America. Rather than keeping it on life support, President Trump’s FCC seems intent on killing the patient by pushing an anti-competitive agenda at a time when more competition is really what’s needed.

US consumers are dependent on a precious few companies for their internet access. The top four providers – two cable and two telecoms companies – claim three-quarters of all residential customers. Because of the dearth of competition, and to ensure that it didn’t deteriorate further, in 2015 the FCC changed the rules to protect and promote competition and a free and fair internet. The purpose of the FCC’s Open Internet Order was to ensure consumers aren’t blocked or manipulated when they use their broadband connections. It also aimed to avoid competition and innovation being stifled.

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The FCC rules, which are now threatened, were developed to preclude companies from blocking, throttling, and demanding extra payments for prioritized, faster service. Somehow, lost in the debate is the rule proposed to protect, if not foster, competition – the General Conduct Rule. It, too, is in the new FCC’s crosshairs. We, and others, think this is a big mistake and needs to be rethought.

How Will the Demise of the Open Internet Affect You?

For example, are you among the millions currently enjoying programs on Amazon, Hulu, Netflix, and similar services? If so, you could very well be in for some disappointment. Those providers produce shows that compete with more established players in the entertainment industry. Big broadband companies, which provide similar programming, find their bottom lines are imperilled when consumers use their broadband connections to access competing video providers. Thus there is plenty of incentive for the big boys to stifle competition.

The now vulnerable 2015 Open Internet Order presented sixteen pages of economic and technical analysis, which demonstrated that “broadband providers (including mobile broadband providers) have the economic incentives and technical ability to engage in practices that pose a threat to internet openness by harming other network providers, edge providers, and end users.”

The seemingly always cost-conscious, anti-regulation Republicans like to argue that current anti-trust laws and a wary and robust Federal Trade Commission (FTC) pack enough punch to make the Obama-era FCC rules expensively excessive and superfluous. None other than the Supreme Court would disagree. In the argument about whether regulation is preferable to anti-trust laws, the Court opined that regulation was preferable due to “the considerable expense and delay inherent in antitrust litigation, and the great disparities in wealth and sophistication between (TV stations and cable systems).” The Court also noted the “considerable expense and delay” of bringing a case. One would think that this would give the FCC pause. Think again!

The End of Free Speech?

The supporters of the open internet also offer non-economic considerations, including First Amendment free speech issues. Some argue that the type of free speech upon which the US was founded, and under which democracy flourishes, is in peril. The FCC is pondering whether broadband providers should be allowed to block or interfere with consumers’ rights to express their thoughts or to hear the views they want.  Left to their own devices and unbridled by regulation, those providers could run roughshod over consumer choices and freedoms. Not to mention their wallets.

Personally, however, I think the issue boils down to the economics. The big companies are bent on making more money. No doubt the consumer will, once again, bear the economic burden. The irony is that it is the Trump supporters of Middle America who will take another financial blow if the FCC decimates the open internet. Unlike their well-heeled coastal cousins, they stand to lose what few choices they now have.

Opinions are the writer’s own.

Image credit: Fizkes/

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