A Government Ruled for Net Neutrality. Too Bad It Wasn't Your Government

By Dan Gillmor, Guardian UK

06 June 14

SEE ALSO: Cable Companies Reportedly Funding Fake Consumer Groups to Oppose Net Neutrality

In America and Europe, the internet is going mobile out of convenience. In the developing world, mobile is the internet. Here's what happens when companies take advantage of that

he net neutrality debate has focused in America on wired lines – not mobile. But what just happened in Chile is a precursor to the real battle in at least the medium term: the mobile internet.

Chile's telecommunications regulator, the Subsecretaria de Telecomunicaciones, recently imposed some short-term pain on some of the nation's internet users, hoping to ensure a long-term gain: Chileans' ability to make their own choices about how they want to use the internet. Mobile carriers had wanted to partner with giant internet services (including Facebook and Google) to offer what they call "zero-rating" connections: an increasingly common arrangement in which mobile phone customers got no-cost mobile data as long as they used those specific services. But the regulator instead insisted that Chile's network neutrality law meant what it said, and nixed those arrangements.

Those of us who believe that the principle of net neutrality is crucial to a truly open internet – the kind of web required to ensure innovation and free speech – need to recognize that in many places, including the United States, we've already lost the near-term battle when it comes to mobile. The carriers, supported by regulators and even supposedly open-internet-friendly companies like Google, have seized control, re-centralizing a medium that was designed to be decentralized. This is a dangerous mistake.

In America and Europe in particular, internet use is going mobile at a rapid rate, largely due to its convenience – but, in much of the developing world, mobile essentially is the internet. Zero-rating services are training people to believe that Facebook Zero, Twitter Zero et al are synonymous with what it means to be online.

Defenders of these arrangements have one reasonable argument: without zero-rated services, a lot of people wouldn't be online at all. Think of the benefits, they say, while downplaying or even ignoring the long-range damage to the open internet.

The non-neutral mobile internet emerges from the assumption that mobile networks are so bandwidth-constrained that carriers must heavily tinker with what users can do and impose penurious data caps. So why do people in Finland pay a small fraction of the price for much more mobile bandwidth – which they use – than people in Germany, Spain and the US? It's simple, according to persuasive research from a Helsinki consultancy, Rewheel: Finland has genuine competition not dominated by an dominant state-preferred (or owned) carrier. According to Rewheel, the dominant European carriers are trying to create a "digital OPEC" – a cartel designed to maintain high prices.

In America, meanwhile, two national mobile carriers already have a dominant market share: Verizon and AT&T are far ahead of Sprint and T-Mobile – and a host of smaller companies that resell minutes and data from the networks of big carriers. For its part, AT&T is planning an "over the top" service that will maintain data caps but not charge for "Sponsored Data" – a blatant slap at net neutrality.

Meanwhile, Sprint wants to buy T-Mobile, arguing that a combined company will have the needed heft to truly compete with Verizon and AT&T. But it seems much more likely that a "SprinT-mobile" would simply join the big guys to create a cartel that ratchets up the caps and prices for phone users, and makes special deals with "data sponsors".

The competition policy people at the US Justice Department – in a rare example of it doing its job under the Obama administration – already blocked AT&T from buying T-Mobile – a deal that would have been even worse, to be sure – but the smart money seems to be betting that this one will be approved.

A Sprint / T-Mobile deal would be just the latest in a global race for media/telecom consolidation. In Europe, German chancellor Angela Merkel has actually called for more telecom mergers. The European Union's chief antitrust official objected to Merkel's approach, but cross-border consolidation seems more likely to proceed than stop.

We could well be headed toward an era in the not too distant future in which a handful of telecom carriers – with national units allied with governments – dominate global communications.

Meanwhile, we keep hearing a common refrain: everything is going mobile. In Silicon Valley, internet startups almost always say that they are "mobile first" and the traditional web second. It's true that users, especially younger ones, prefer mobile devices to desktop and laptop computers. But a mobile-first strategy will put startups and established companies alike – including news organizations – under the thumb of an industry that will, sooner than later, be extracting tribute from every company that wants to do business on the mobile internet.

So I'm baffled that we're framing network neutrality in such a constrained way. We definitely need to save it for our wired-line services. But if we ignore the ways in which mobile carriers are trying to create a new cartel of their own, we'll be in even worse trouble.