It has been reported that the Federal Communications Commission (FCC) officially ended the network neutrality rule, signaling the possible end of the era of free internet. While 2018 may bring a resurgence to the communications industry, operators are likely to be the least benefited in this transformation.
At the "2017 China Communications Industry Conference," Professor Lu Tingjie from Beijing University of Posts and Telecommunications highlighted how OTT services have disrupted the traditional telecom pipeline. He also pointed out that the separation of the network industry has led to the loss of intermediate products and final consumption. According to Lu, the internet has remained largely free because the costs were shifted onto telecom operators.
On December 14, the FCC formally repealed the network neutrality rule. This principle was designed to ensure fairness for all users—except for telecom companies. With this change, the era of free internet may be over, and the communications sector could see a revival starting in 2018.
The concept of network neutrality was first introduced by Professor Wu Xiuming from Columbia University in 2003. It states that internet service providers should treat all data equally, without discrimination.
In simpler terms, if we compare telecom operators to a “roadrunner,†then internet companies act as the “drivers.†If road access is fair and equal, it aligns with the principles of network neutrality. However, if certain vehicles are given preferential treatment on the highway, such as faster lanes or special access, it violates the core idea of net neutrality.
From Lu Tingjie’s perspective, the regulation of the internet is heavily influenced by planned economy principles and is essentially anti-market. In a system that appears fair to everyone, telecom operators are the ones who suffer the most.
Therefore, he argues that the U.S. decision to repeal network neutrality serves three main purposes: First, it aims to address the funding challenges faced by U.S. telecom operators, enabling them to rebuild their infrastructure and remove regulatory obstacles. Second, as a fundamental industry, the telecom sector is undergoing rapid changes and cannot afford to miss strategic opportunities due to political correctness. Third, it is an urgent need for the U.S. to bridge the digital divide and foster telecommunications innovation.
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