Friday, February 27, 2015
What the Railroads can Teach Us about Net Neutrality
Yesterday, the Federal Communications Commission voted to reclassify broadband Internet as a public utility. While this topic may seem completely unrelated to trains, there are many apt parallels between the social changes caused by the railroads almost two hundred years ago, and the Internet in our own time. In both cases, the American government and legal system had a learning curve in deciding how to regulate the new technologies and the practices of the companies that owned them.
To briefly recap, American railroads developed at an unchecked pace during the mid nineteenth century. Beyond authorizing thousands of new railroad companies* and granting the industry large tracts of land, the Federal government remained mostly aloof from this process. The network of rails grew exponentially, and quickly became inherent to the country’s economic and social livelihood.The railroads allowed population and agriculture to expand into much more diverse areas than before. However, as there was at the time no other method of transportation, America’s rural hinterlands were at the mercy of the railroad to import vital supplies and more their crops and livestock to centers of commerce.
In a very practical sense, the Internet is an railroad for ideas. Information is a “cargo" that runs over a network of physical “rails." In fact, a map of major railroad corridors and Internet switching points match up all most exactly. Although the coding and machines necessary to link multiple computers up together were first developed by DARPA with military use in mind, an initially hands-off approach from the Federal government in its early stages made it as open a frontier to individuals with capitol and technical know-how as the American west was to the railroad builders.
Thousands of different companies and freelance inventors contributed to building the Internet as we know it today. It is now inseparable from almost every aspect of our daily lives.
The first iterations of the Internet were regulated as an extension of telephone utilities. As such, Internet provides could not discriminate against users or content providers. When broadband and wireless services separated Internet usage from a physical phone line, though,** the Federal Communications Commission did an about-face and began to regulate Internet access as information service, and not as a means of communication in and of itself. The practical effect of this was that at the same telecommunications providers were beginning to realign into a trio of large conglomerates--Verizon, Comcast, and Time-Warner***-- the Federal government removed prohibitions that prevented them from strangling bandwidth and favoring some users over others.
Businesses merging together to strangle out competition is perhaps their natural trajectory. By the late nineteenth century, the owners of several different railroad companies had implemented the then-novel idea of managing several companies together under a board of trustees. This form of management allowed the railroads to conspire to set prices as high as they pleased, and to offer lower prices or faster shipping to favored customers. It is directly analogous to the way some Internet content providers, such as Netflix, have attempted to purchase faster rates for their content.
The railroads' shady practices disproportionately impacted farmers, ranchers and other people living in rural areas, as their livelihood was absolutely depended on the railroads moving goods in and out of their area. Not surprisingly, these individuals put out the most passionate calls for better regulations against the railroads and other conglomerates. An entire political faction--the Grange Movement--sprang up around rural people’s transportation frustrations. A number of other political parties, most notable the Bull Moose party and the Progressive Party of 1924, continued to call for closer regulation of railroads and other industries as part of their platform.
So far, no modern political party has made Internet regulation a core of its platform, but the fact that the FCC received more than four million public comments protesting a proposed regulation that would have allow Internet providers to provide faster rates for higher-paying customers and content providers shows that the public is keenly aware of issues surrounding Internet regulation. The FCC abandoned the proposal in early 2015, and yesterday voted to regulate the Internet as a public utility. Essentially, the Federal government returned the Internet to its original status as a common carrier.
In legal terms, a common carrier is a public service that is deemed so vital to society that it cannot refuse to move goods (or information), except in cases where safety issues arise or the shipper desires service that is significantly outside the carrier’s normal business. In the late 19th century, the United States government also turned to this line of thinking to reign in the railroad companies. The core of their argument--the railroads own the tracks and rolling stock but have no right to regulate which cargo they carry--is mere words away from net neutrality advocates’ claim that the telecommunications company’s role should be limited to owning and maintaining the infrastructure regardless of what data goes through them.
Railroads had actually been considered common carriers almost as soon as they were invented, but they began operations in earnest before the United States legal system developed the teeth to prevent or reign in monopolies. The public mood could not be denied, though, and the United States Congress passed the Interstate Commerce Act in 1887. This legislation clarified the Federal government’s role in regulation commerce--the Constitution had reserved them that power, but was too vague in defining the situations and types of transactions in which it could legally intervene. Two important amendments sponsored by President Roosevelt further clarified the role of the newly-created Interstate Commerce Commission: The Elkins act in 1903 forbade railroads from giving rebates to favored customers, and the Hepurn Act in 1910 authorized the ICC to set maximum prices on rail freight. This legislation, as well as a number of lawsuits which broke up railroad and oil monopolies, leveled the industrial playing field.
Keeping the Internet open to all is not quite the life-or-death situation as shipping grain or cattle was for 19th-century agrarians, but is still vital, considering how integrated it is to our economy, education, and daily communication. The critics of Internet neutrality (those who aren’t reflexively convulsing at the mention of the Federal government, that is,) fear that treating all data equally will result in high-bandwith operations, such as movie and music services, slowing down other operations. It is impossible to tell what the effect of the net neutrality laws will, as the new regulations were enacted less than a day ago, but assuming that the laws are not overturned in federal court or repealed by an incoming Republican president in 2016, history may provide some indication of their future.
The laws passed to reign in railroad monopolies did provide some relief to shippers, especially those with low overall revenues. For several decades, the railroads themselves remained profitable overall, baring the major slump during the Great Depression. Their fates changed when road and air travel became viable competition. Not only did were these two budding industries not subject to the same restrictions curtailing the railroads’ operations, the Federal government invested large sums of money in both industries. The Interstate Commerce Commission finally deregulated the railroads in the 1970s and 80s. Many companies merged to form the large Class Is known today, but it was too little too late for the industry to regain its former prominence.
Net Neutrality legislation may provide yet another parallel to the legislation designed to reign in the railroad monopolies if, at some point in the near future, there is a major change in the way that the Internet functions or the way in which we access its content. Perhaps an alternate network will begin to rival the services we currently use, or ,it we really want to delve off into science fiction, one day we may be able to bypass personal machinery entirely and plug our brains right into the Internet . If these newer access methods did not immediately fall under net neutrality regulations, the conventional Internet might face the same troubles as the railroads did as they became subject to more competition. There is no way to know exactly how the Internet will developed in the future, but so far, its history continues to invite comparisons to the development of the railroads.
*Not all of the companies that were authorized by the United States government actually went on to build or operate railroads.
**Getting into the nuts and bolts of how the Internet actually functions is far beyond the scope of this article, but it should be noted that once information leaves a wireless network in one’s home or place of business, it is still transmitted over physical telecom lines.
***\Comcast and Time Warner are currently attempting to get permission from the Federal government to merge into an even larger company.