What is Net Neutrality and internet fast lanes, and why is Obama stepping in now?

You've probably heard a lot about Net neutrality in recent months but still have no idea what it means. You're not alone.

Technology is a wonderful thing, but the tech lingo that comes along with it is both confusing and boring. Pocket-lint wants to make technology interesting to read however, so we've tackled the topic of Net neutrality. We've delved into the controversy, giving you tolerable chunks of information that you'll be able to understand and retain.

We go over ISPs, web giants, and new FCC internet rules that threaten the idea of open internet in the US. If you'd like read more about how the future of the internet is at stake, including how that will affect tomorrow's start-ups and your wallet, keep reading.

What is Net neutrality?

There's no thrilling way of explaining Net neutrality, so we'll just go with the simple route: Net neutrality (also known as Network neutrality) is another phrase for open internet. It's the idea that internet service providers (such as AT&T, Verizon, Comcast, etc) should treat technology companies, websites, services, and apps (such as Netflix, Google-owned YouTube, Facebook, and Microsoft-owned Skype) the same. Better yet, they should treat data from these companies the very same. Google therefore shouldn't get special treatment over Netflix, and so forth.

Internet fast lanes

There's just one problem with the open internet idea.

Internet service providers - also called ISPs - want to treat data and companies differently. In fact, they want to create two types of broadband speed lanes. The first lane would be a fast lane, and providers would charge technology companies like YouTube for access to this lane. YouTube would be forced to pay the premium in order to continue piping quality video and content at high speeds to users. If it didn't pay, users would only be able to stream stream slow, choppy video.

The second lane, widely called a slow lane, would be for everyone who couldn't afford the fast lane. So, if you wanted to launch a YouTube competitor, you'd need to pay for the fast lane in order to give your users access to a YouTube-comparable video streaming service. You might not be able to afford the fast-lane premium however, meaning you'd have to use the slow lane. This would give you an instant disadvantage to YouTube, thus hurting your startup.

Content delivery servers

You should know most consumers and technology companies alike (such as Netflix and Google) are against the ISPs' dream of internet fast lanes, sort of. No one really wants to see the current state of open internet split into a two-tier setup, where the rich get fast internet and the poor get slow internet. Even more specifically, technology companies don't want to start paying for a faster internet. They think it should be standard, for all.

According to Wired, complaints about an internet fast lane don't make much sense in 2014. Technology companies (such as Netflix and Google) already have a fast-lane setup within ISPs. They already run dedicated computer servers, called peering connections or content delivery servers, inside of ISPs.

Content delivery servers do exactly what you think: deliver popular photos, videos, and other content. But they deliver this content faster to home users (aka you), because they’re stationed inside of ISPs and are therefore closer to home users. Google was the first technology company to implement a content delivery server inside of an internet service provider years ago, so it could pipe content from data centers more quickly to you.

Most ISPs have special arrangements with web giants and technology companies. As Wired noted, ISPs are happy to have Google on the inside, because Google's servers speed up service for their customers and reduces the amount of traffic that flows out of their network. This setup has allowed you to watch Ultra HD 4K video on the internet, versus from a disc.

However not every technology company has the same financial resources and can afford content delivery servers or special arrangement. You should also keep in mind that most technology companies don't have enough traffic to require a Google-like setup inside of ISPs.

That said, only 30 technology companies account for half of the internet's traffic (down from 150 in 2009).

Netflix vs Comcast

Netflix and Comcast reached an agreement earlier this year, in which the video-streaming company agreed to pay Comcast for direct access to its broadband network (aka a fast-lane setup). Before the agreement, Netflix wanted to connect to Comcast's broadband network free of charge. It didn't want to pay for a broadband/speedier fast lane. The cable giant sought compensation for the heavy traffic though, arguing it was expensive to deliver internet video.

As the debate heated up, Netflix suggested Comcast customers were experiencing their connections to Netflix degraded. Netflix released data, for instance, that showed the average Netflix streaming speed declined 27 percent since the debate started. In other words, it looked like Comcast was punishing consumers because Netflix was refusing to pay a fast-lane premium.

When Netflix and Comcast finally came to an agreement (called paid peering), the details, which involved Netflix connecting directly to Comcast's network instead of going through intermediaries, were announced less than two weeks after Comcast revealed a $45 billion deal for Time Warner Cable. The merger would basically reduce competition in the market even further and create a cable kingdom serving 33 million customers across the US.

No competition

The way the internet works right now is changing, for the worse.

As evident by the Netflix and Comcast agreement, ISPs can pick who gets a fast-lane connection and at what price. There's nothing to stop them. There's no definite internet rules to outline what's fair or not fair, meaning ISPs could conceivably make the two-tier setup we mentioned earlier (where the rich get fast internet and the poor get slow internet) a standard practice.

The problem is there's hardly any competition among ISPs. Only a few companies have control over the enter market in the US. More specifically, a broadband study recently claimed 96 per cent of Americans have access to two or fewer ISPs. These providers creating a new-age monopoly or mafia of sorts, by not encouraging market competition. They instead are growing larger and dictating how much fast internet will cost certain companies.

What's even more scary: big ISPs have fat wallets and many friends in Washington. Comcast spent $18.8 million last year on lobbying, for instance, according to the Center for Responsive Politics, more than any company in the US except defense contractor Northrop Grumman. They have the muscle to get legislation to work in their favour, and that's exactly what they are doing.

What about the FCC?

New internet rules

The idea that all internet content should be treated equally as it pipes through cables to consumers is becoming more of a fairy tale every day, thanks to the US Federal Communications Commission.

The FCC introduced a legislative proposal (or internet rules) in April that would negatively affect Net neutrality. The proposed internet rules would allow ISPs to charge technology companies for access to faster lanes, speeding up delivery of video and other content to their customers. This proposal would go against what is known as Net neutrality.

For a visual breakdown of Net neutrality and the whole fast-lane idea, check out this infographic theOpenInter.net.

The internet of tomorrow

It is widely thought the FCC's proposed internet rules will eventually raise prices for customers. Netflix would need to charge subscribers more in order to compensate for the fast-lane costs, for instance. Several consumer groups have attacked the FCC's proposal, claiming it would cause costs to rise and even hurt small start-ups with innovative business models. After all, start-ups don't have the same financial resources as Netflix to pay for fast-lane internet.

Want more information about the FCC's proposed rules? Watch the video below. British comedian John Oliver explained the controversy on his HBO show. He also asked viewers to argue against the new set of internet rules proposed by the FCC, emphasising how they would essentially end Net neutrality. The FCC website went offline one day after Oliver's rant aired due to an overload of traffic, according to Wired.

There's still time to fight and save Net neutrality. The FCC's proposed rules are likely to be put to a vote by the full commission by the end of the year. That means you should contact the FCC and voice your opinion today.

What is Obama doing?

Public internet groups have largely opposed FCC Chairman Tom Wheeler's new Internet traffic rules that were proposed in May. The rules aim to stop ISPs from blocking content but allow content providers to pay ISPs for faster delivery of traffic. Since May, nearly 4 million comments have flooded the FCC.

President Barack Obama on 10 November pressed the federal communications regulator to tighten internet traffic rules, emphasising that costly fast lanes should be banned. Obama even published a statement and a video message online, in which he called upon the FCC to ban "paid prioritization" and classify ISPs as public utilities.

The White House's new Net Neutrality website offers the following explanatory message: "And as the FCC considers new rules for how to safeguard competition and user choice, we cannot take that principle of net neutrality for granted. Ensuring a free and open Internet is the only way we can preserve the Internet's power to connect our world.

"That's why the President has laid out a plan to do it, and is asking the FCC to implement it."

You can watch Obama's video message above, and you can go to White House's Net Neutrality site to read his statement in full.