At the NRF event in NYC a couple of weeks ago, a CIO friend of mine casually asked, “So, this net neutrality thing – should we care? ” The answer is an unequivocal “yes, ” with several “!!! ” for emphasis. But before getting into the importance of the issue, here’s a quick description of what it is. Back in an August 2010 Retail Paradox Weekly column, I used a quote from the University of California Open Computing Forum (ocf.berkeley.edu) that described net neutrality this way:

“‘Simply put, net neutrality is a network design paradigm that argues for broadband network providers to be completely detached from what information is sent over their networks. In essence, it argues that no bit of information should be prioritized over another. This principle implies that an information network such as the internet is most efficient and useful to the public when it is less focused on a particular audience and instead attentive to multiple users.’ In other words, traffic should be handled on a first-come/first-served basis. “

For many, net neutrality is a non-issue, perhaps because they don’t think it will affect them personally. Verizon, who spearheaded the successful challenge to U.S. government regulations that preserved net neutrality, released a statement saying:

“Today’s decision will not change consumers’ ability to access and use the Internet as they do now. The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet. Verizon has been and remains committed to the open Internet that provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want. “

Here’s the problem: Verizon is just one of many commercial players that deliver Internet connectivity and performance to you as a consumer and potentially to your company. While its good that Verizon remains “committed to an open Internet “, there are already plans in the works to monetize preferred access. For example, AT&T has announced a feature called “sponsored data ” that businesses could pay for, to deliver content to your mobile device without it impacting your data plan. Sounds good, right? But the Internet doesn’t have infinite bandwidth, and as businesses compete in “pay to play ” schemes that give them access to express-lane bandwidth, what’s left for the rest?

Founding Principles

It’s important to remember that Internet bandwidth is delivered by commercial (as in “for profit “) enterprises. But think of the U.S. interstate highway system. As far back as 1785, U.S. President George Washington said, “the credit, the saving, and convenience of this country all require that our great roads leading from one public place to another should be straightened and established by law . . . To me these things seem indispensably necessary. ” 170 years later, President Dwight Eisenhower (called “The Father of the Interstate System “) said, “our unity as a nation is sustained by free communication of thought and by easy transportation of people and goods. The ceaseless flow of information throughout the Republic is matched by individual and commercial movement over a vast system of interconnected highways crisscrossing the country and joining at our national borders with friendly neighbors to the north and south. “

If you’ve ever driven from Arizona to Texas on U.S. Interstate 40, you can see Eisenhower’s dream in action. It’s full of Walmart, Walgreens, and other retailers’ 18 wheelers, bringing products to market day and night. Now imagine if Walmart paid for preferential access to the left lane. That’s what the court’s action enables on the Internet.

Dwight Had It Right

The operative word in the Eisenhower quote above is “free “. At the risk of inflaming my libertarian friends (you know who you are!), I think that Dwight had it right. If the economic well-being of a nation and the market is dependent on infrastructure being reliable and accessible to all, then it needs to be policed. And that means “government ” needs to step in and establish the rules that mandate that the infrastructure (road, water, electricity, AND network) will be reliable and accessible to all.

My question is, what does the industry have to say about the issue? Back in 2006, the NRF leadership at the time supported the introduction of a bill to the U.S. Congress (H.R. 5417, the “Internet Freedom and Nondiscrimination Act of 2006 “) to regulate network neutrality. That bill never got anywhere, but in 2007, The Federal Communications Commission (FCC) issued a ruling intended to “preserve and promote the open and interconnected nature of the public Internet “. That was contested in courts by Comcast. After a back-and-forth fight with the cable network, the FCC responded by adopting the “Open Internet Order, ” which imposed the following three net neutrality rules:

• Transparency – fixed and mobile broadband providers must “publicly disclose accurate information regarding their network management practices, performance, and commercial terms; ”
  
• Anti-blocking – fixed and mobile broadband providers are prohibited from blocking their customers from accessing or using “lawful content, applications, services, or non-harmful devices, subject to reasonable network management; ”
  
• Anti-discrimination – fixed broadband providers only are prohibited from unreasonably discriminating in the transmission of lawful network traffic, meaning that discrimination based on the type or source of traffic would be prohibited, while discrimination based on network management, such as to reduce congestion, would be permitted.
  

It is the “anti-discrimination ” and “anti-blocking ” parts of the rule that the court has thrown out. To my knowledge, the NRF hasn’t issued an opinion about this issue recently. Neither to my knowledge have the trade groups RILA, NACDS, or NACS.