Encyclopedia of Opinion
Question
What are the positions on net neutrality?
Position‹2 of 2
Net neutrality is bad
Argument1 of 3›

Net neutrality raises the cost of the internet for consumers

Net neutrality limits internet providers to a user-based revenue model, which results in the consumer having to pay more—ultimately resulting in lower industry demand and revenue, reducing consumer welfare.

The argument

The demand for data is vast, and with millions of new users compared to just 15 years ago. In 1995, Internet providers like Prodigy and America Online would charge $9.95 as a base fee for 5 hours of online access and $2.95 for each additional hour per month. Nowadays, monthly billing with the 1995 standard would be extremely expensive considering Americans in the present-day average over 23.6 hours a week online! Fortunately, we don't foot this bill today due to successful innovations and efficiency, but under net neutrality laws, internet providers have no choice but to rely on consumers for the bulk of their revenue. A business model emerges where consumers pay a fixed monthly subscription rate for their internet services, and this makes up the lion’s share of the providers' revenues. In a study conducted by the American Consumer Institute, it was found that customers could lose up to $69 billion in potential benefits over the next ten years, with lower-income broadband consumers seeing the highest increases in cost. Returning to the idea of average time spent online, there could even be discrepancies between consumers in cost under the Net Neutrality Paradigm. Naturally, some consumers, who extensively browse the web, will be undercharged, and others, who browse less, will be overcharged. Clearly, with such a one-size-fits-all policy, the nuances of internet use and services are not fully captured.

Context

Net neutrality forces internet providers to pursue a business model that relies on consumers for revenue, rather than businesses.

Premises

[P1]Under net neutrality, internet providers cannot diversify revenue and must rely on consumers paying fixed subscription fees for the bulk of their income. [P2] This fixed-fee model raises overall consumer costs, with studies projecting up to $69 billion in lost consumer benefits over ten years, hitting lower-income users hardest. [P3] A uniform pricing structure also fails to reflect actual usage, overcharging light users and undercharging heavy users. [C] Therefore, net neutrality is bad because it raises and distorts the cost of internet access for consumers.

Counter-arguments

Although there may be some increase in cost associated, this type of measure ultimately prevents future price gauging in contexts where the market is no longer competitive if Net Neutrality is repealed. In a scenario where certain sites or companies are favored by those controlling the market, those with the largest presence could increase costs as they wish due to having fewer competitors than if net neutrality was in place.

Rejecting the premises

[Rejecting P3] This is not guaranteed. The inverse could prove true.

Framing

With other business models available, telecom companies might adopt one that doesn't put all the financial pressure on the user. Under net neutrality, there is no revenue model available that does not involve leveraging the internet user.