The topic of net neutrality has received an extraordinary amount of press in recent months because of a landmark case brought by Verizon as a challenge to established rules. The establishment of net neutrality was designed to ensure that access providers like Verizon, Comcast, and TimeWarner couldn’t charge companies extra for bandwidth.

Without net neutrality, companies offering streaming services, such as and Netflix, could be forced to pay extra to ensure their content could be delivered successfully to customers. Indeed, Netflix recently signed a contract with Comcast to pay extra to ensure that it would receive enough bandwidth from Comcast to deliver services.

History of Net Neutrality

The origin of net neutrality and how it became a hot-button item started in 2004 after months of debate regarding internet service providers and internet traffic. The document created by the FCC contained four standards intended to ensure neutrality between service providers and companies delivering internet-based content.

These rules were designed, in part, to help facilitate migration to broadband networks, which was important a decade ago due to America’s lack of widespread broadband access when compared to other industrialized nations. In addition, the rules were meant to encourage competition and the entry of new businesses into the marketplace.

The four freedoms guaranteed in the document included:

  • Freedom to access content
  • Freedom to use applications
  • Freedom to attach personal devices
  • Freedom to obtain service plan information

The Chairman of the Federal Communications Commission in 2004, Michael Powell, asserted in the document that adherence to these rules of net neutrality would reduce the likelihood that private sector companies providing internet access would need to be regulated by the federal government.

Providers Start to Complain

Soon after the implementation of net neutrality, internet service providers started to see their bottom lines erode due to economic stagnation. An executive at SBC (which would become AT&T) publicly complained about the rules and how they were stifling the ability of internet service providers to make money on traffic.

Other companies didn’t complain and instead used the power of negotiation to secure massive deals. For example, AT&T promised that they would abide by the rules of net neutrality if the federal government would approve its purchase of rival internet service provider BellSouth.

Over the next few years, widespread complaints regarding the speed and performance of internet service during the use of certain programs enraged customers using programs like BitTorrent. One of the biggest offenders was Comcast, who admitted that they throttled network traffic when it was under heavy use.

FCC Order Results in Landmark Case

After learning that companies like Comcast were purposefully slowing traffic, the FCC demanded that the service providers cease throttling traffic from certain content providers. Several years of arguing on all sides: government, consumer, and business, would lead to a Republican attempt in 2011 to overturn the rules.

That attempt would fail; however, giant communications conglomerate Verizon would challenge that rule and come out victorious in the U.S. Court of Appeals. In the case, it was Verizon’s assertion that the FCC overstepped its bounds by introducing net neutrality.

The court agreed with Verizon; however, the decision denied Verizon’s suggestion that the FCC didn’t have jurisdictional rights over broadband access. Essentially, the court’s position sent the rules for net neutrality back to the drawing board.

Although the court’s decision does make some consumers and businesses hopeful that net neutrality will return, the separate agreement between Netflix and Comcast might be the beginning of the end of net neutrality.