Net neutrality is bad
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Net neutrality raises the cost of the internet for consumers
Net neutrality limits internet providers to a user-based revenue model, which results in the consumer having to pay more—ultimately resulting in lower industry demand and revenue, reducing consumer welfare.
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Net neutrality forces internet providers to pursue a business model that relies on consumers for revenue, rather than businesses.
The demand for data is vast, and with millions of new users compared to just 15 years ago. In 1995, Internet providers like Prodigy and America Online would charge $9.95 as a base fee for 5 hours of online access and $2.95 for each additional hour per month. Nowadays, monthly billing with the 1995 standard would be extremely expensive considering Americans in the present-day average over 23.6 hours a week online! Fortunately, we don't foot this bill today due to successful innovations and efficiency, but under net neutrality laws, internet providers have no choice but to rely on consumers for the bulk of their revenue. A business model emerges where consumers pay a fixed monthly subscription rate for their internet services, and this makes up the lion’s share of the providers' revenues. In a study conducted by the American Consumer Institute, it was found that customers could lose up to $69 billion in potential benefits over the next ten years, with lower-income broadband consumers seeing the highest increases in cost. Returning to the idea of average time spent online, there could even be discrepancies between consumers in cost under the Net Neutrality Paradigm. Naturally, some consumers, who extensively browse the web, will be undercharged, and others, who browse less, will be overcharged. Clearly, with such a one-size-fits-all policy, the nuances of internet use and services are not fully captured.
Although there may be some increase in cost associated, this type of measure ultimately prevents future price gauging in contexts where the market is no longer competitive if Net Neutrality is repealed. In a scenario where certain sites or companies are favored by those controlling the market, those with the largest presence could increase costs as they wish due to having fewer competitors than if net neutrality was in place.
With other business models available, telecom companies might adopt one that doesn't put all the financial pressure on the user. Under net neutrality, there is no revenue model available that does not involve leveraging the internet user.
[P1] Without net neutrality, internet providers could charge businesses for the tier of internet services they provide. [P2] This would allow for alternate revenue models that do not put all the financial pressure on the consumer. [P3] Therefore, net neutrality forces the consumer to pay higher prices for their internet. [P4] Higher prices are bad. [P5] Therefore, net neutrality is bad.
Rejecting the premises
[Rejecting P3] This is not guaranteed. The inverse could prove true.
In the Wild
- Net Neutrality Would Make the Internet More Expensive
- How You'll Know Net Neutrality Is Really Gone
- California Plans to Socialize Wholesale Internet Pricing via Net Neutrality
- U.S. FCC votes to maintain 2017 repeal of net neutrality rules
- In Singapore Hotstar launch, Disney will be violating Net Neutrality in second Asian market
- New York State Legislator Introduces a Very Bad “Net Neutrality” Bill