Debates over how government should regulate the Internets evolution heat up whenever anyone mentions net neutrality. Here are the two sides of the debate: The Case for Net Neutrality This side argues that carriers selling Internet access Verizon, AT&T, and Comcast, for instanceshould not discriminate for or against different content providers or applications. All traffic should be routed neutrally, and the carriers should not make special deals to favor some content by giving it more bandwidth so movies will play more smoothly and web pages load faster. The Open Internet Coalition strongly supports net neutrality and includes dozens of companies that provide content over the Internet. Amazon, eBay, Google, Lending Tree, Facebook, Skype, Paypal, and Netflix are all members. The coalition also includes nonprofits that advocate for openness, such as the American Civil Liberties Union, American Library Association, and Educause.

The Case Against Net Neutrality On the other side of the debate are the carriersAT&T, Verizon, Comcast, and others. They argue that incentives are needed to encourage their investment in the network infrastructure, and that their networks have to be managed to provide the best service at reasonable costs. Video downloads, in particular, hog bandwidth to the detriment of other users who just want to read the news or send email. In fact, this issue gained considerable steam when Comcast began throttling download speeds for subscribers using BitTorrent, software widely used to download movies. Comcasts move, while helpful to most customers, was a violation of net neutrality.

Even though adherence to the net neutrality principle was voluntary, the Federal Communications Commission (FCC) reprimanded Comcast for what it considered an outrageous violation. Comcast sued, and the courts decided the FCC didnt actually have jurisdiction to reprimand anyone because the Commission has no authority over broadband communications. The FCC went on to establish rules supporting net neutrality anyway. To no ones surprise, the carriers objected to the FCCs rules. Verizon filed a lawsuit in 2012, arguing that the FCC went way beyond its authority when it made rules about net neutrality, as the court determined in the Comcast case. Verizon also claimed that the rules violated the companys freedom of speech by taking away their control over their own propertytheir networks. Whether network traffic is speech is an interesting question, of course. This somewhat technical topic attracts intense lobbying efforts targeting government agencies and politicians. The outcome will affect strategy for any organization with an Internet presence, and all the players have much at stake. Their members do not want the risk that carriers could disadvantage their content in favor of a competitor or make it cumbersome for customers to access their sites. All businesses that have an online presence have a lot at stake, too, and so do consumers. If the carriers can make deals with some companies so that their pages load faster, big, cash-rich companies might have another edge over small businesses. Or, if your carrier favors traffic coming from Amazon Instant Video over Netflix, you might drop your Netflix subscription. On the other hand, your own web browsing would be slower if neighbors who share your cable connection are downloading movies 24 hours a day, and the cable company cant throttle them down. The outcome of Verizons lawsuit is an important ingredient in the Internets future, and in the way governments treat the nets development. One outcome may be that lawmakers decide its time to rewrite the 1996 Telecommunications Act, which will undoubtedly spur debates for years to come.

From the case study above, answer the following questions:

1. What are the strategic interests of carriers? What are the strategic interests of websites?

2. How do the interests of carriers differ from the interests of websites? What are the implications for websites from a value chain perspective?

3. What is the basis for Verizons lawsuit against the Federal Communications Commission? Why did they claim a violation of free speech?

4. What are relevant considerations on the role government could play to resolve differences between carriers and websites?