Does net neutrality have a loophole?

Stan Alcorn Mar 20, 2015
HTML EMBED:
COPY

Does net neutrality have a loophole?

Stan Alcorn Mar 20, 2015
HTML EMBED:
COPY

The simple understanding of the FCC’s recent net neutrality regulation is this: it makes it so cable companies can’t charge the Netflixes of the world more for an Internet fast lane. 

But net neutrality applies only to the “highway” of data that is the public Internet. The cable companies have three routes into your house: the public Internet, pay TV, and “specialized services.” The Wall Street Journal reports HBO, Sony and Showtime are in talks with cable provider Comcast to bring their “Web TV” product to that “specialized services” highway, where fast lanes are allowed. 

Susan Crawford, co-director of the Berkman Center for Internet and Society, says this could present an opportunity for cable companies to cap bandwidth on the public Internet, and then charge web TV providers for special treatment for products delivered through the “specialized services” pipe.

But Ian Olgeirson, an industry analyst at SNL Kagan, doesn’t see, from the details we know now, how this would be a smart business proposition for the cable companies, since it would undermine their pay TV business.

“There’s sort of a tradeoff for the operators,” he says. “They’re giving up a revenue stream  to gain another revenue stream.” 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.