Net Neutrality: What It Means for You and Your Money

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What Is Net Neutrality?

Net neutrality is the concept that all internet service providers (ISPs), governments and corporations should treat all data on the internet the same way. Under net neutrality, ISPs would not be able to block legal content or slow down its transmission. Data access and speed would be the same for all traffic.

Think of the internet as a highway. With net neutrality, all of the vehicles on the road would have to adhere to the same speed limit. Whether you’re traveling in a limo or on a motorcycle, you have to go at the speed limit.

Without net neutrality, different vehicles could have different speed limits. Eighteen-wheelers from Walmart might be able to go 90 miles per hour, while the pickup truck from the local greenhouse could only go 45 miles per hour. And you might have to commute to work in your compact car at just 30 miles per hour.

Is Net Neutrality Gone?

Net neutrality is not the law of the land at the moment, but it could make a return.

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Net neutrality laws were put into place in 2015 by the Obama administration and upheld by the U.S. Court of Appeals in the District of Columbia in 2016. In 2017, during the Trump administration, the FCC repealed these laws, and in 2019, the DC Circuit Court of Appeals upheld the repeal, but not a provision that forbids states from passing their own net neutrality laws.

Some states have their own net neutrality laws, including Washington, Oregon and California, although California’s law is being challenged by the federal government. In Hawaii, Montana, New Jersey, New York and Vermont, state agencies are prohibited from doing business with broadband providers that don’t practice net neutrality.

Now, in 2022, President Biden has nominated a net neutrality supporter to the FCC, which would swing the five-member commission toward support of the policy. So, net neutrality could once again become law.

Benefits of Net Neutrality

Net neutrality would create an equal playing field for established companies and newcomers alike since service providers would not be able to give preferential treatment to specific websites. Small companies with innovative products and services would be able to provide them to consumers at the same speed as big companies.

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Take streaming services as an example. With net neutrality, internet service providers would have to stream content from an independent, startup streaming service at the same speed and with the same availability as content from Netflix or Hulu. Without net neutrality, ISPs could slow down the content of any company they chose.

It’s also well within the realm of possibility that, without net neutrality, ISPs could charge content providers for preferential service. They could offer the fastest speeds to the companies that can pay the most — a situation that will further discourage competition and discriminate against smaller content providers.

What are the Negatives of Net Neutrality?

Detractors of the concept of net neutrality say it would discourage innovation since no matter how fancy your website or content is, it will still get delivered the same way as everyone else’s. There is also concern that investment in new infrastructure would be discouraged by the government.

Many of the most vocal critics of net neutrality are the big broadband and telecommunications providers, who benefit from the current status quo. Some of these providers have the ability to slow down content from independent streaming services, for example, while providing their own content at faster speeds.

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The Impact of Net Neutrality on Consumers

Net neutrality increases competition by allowing smaller and newer companies to compete effectively with large, established companies. Anything that increases competition is usually good for the consumer since competition drives prices down, and net neutrality is no different.

Net neutrality would let consumers choose their broadband provider based on cost and other preferences, rather than based on what kind of content the provider would block or would deliver the fastest.

Needless to say, the big broadband providers are putting a lot of money behind efforts to prevent net neutrality from once again becoming law, in the hopes of maintaining their margins.

Since a final decision on net neutrality has not yet been made and debate continues, ISPs have not yet begun blocking or slowing down content from their competition, but if the FCC fails to back the concept, you may see them start to flex their muscle — and this will likely cost you money.

Final Take

As the internet becomes a ubiquitous part of our daily lives, the discussion around net neutrality is sure to continue. And the results of that discussion could affect your monthly budget, as your internet bill could go down if net neutrality becomes law once again, or up if it does not.

FAQ

Here are the answers to some frequently asked questions about net neutrality.
  • Which country has net neutrality?
    • Many countries throughout the world have net neutrality, including all European Union countries, Canada, India, Israel, Russia, Japan and more.
  • Is net neutrality a law?
    • As of June 29, 2022, net neutrality is not the law in the United States. It was law during part of the Obama administration, was repealed during the Trump administration, and may be reinstated in the future.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Karen Doyle is a personal finance writer with over 20 years’ experience writing about investments, money management and financial planning. Her work has appeared on numerous news and finance websites including GOBankingRates, Yahoo! Finance, MSN, USA Today, CNBC, Equifax.com, and more.

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