Early History—the 1970s
What’s now called the “net neutrality debate” is really a restatement of a classic question: How should a network’s owner treat the traffic that it carries? What rights, if any, should a network’s users have versus its owners? The question is ancient enough to be relevant to medieval bridges, railroad networks, and other “common carriers.” But let’s skip 500 years or so and keep the focus on telecommunications networks, where what we now call net neutrality policy really has two ancestors, both dating from the 1970s.
Those ancestors can be understood as reactions to the great AT&T monopoly, its ideology, and its comprehensive control over communications networks. In the late 1960s, (in a sign of how the politics have changed), the Nixon administration’s FCC sought to increase the prospects for competitors in telephone markets. At that point AT&T had been the nation’s communications monopolist for many decades, and as a matter of ideology the firm believed in “one system”—namely, that it, and it alone, should control everything on or attached to the network.
The FCC became interested in a new group of businesses that ran “over the top” of AT&T’s nationwide network. These were at the time newly formed companies, now lost to history, with names like Tymshare, National CSS, CompuServe, and Dial Data, which offered computer services “over” the network to businesses. These were the first ancestors of today’s “over-the-top” operations like Netflix, Wikipedia, Google, and so on. In the jargon of the day, the companies were described not as “apps,” “over the top,” or “internet companies” but as providers of “data-processing services.”
The FCC recognized the great potential in such “over-the-top” services and the importance of what it called the “confluence of computer and communications technologies taking place.” In 1971 the commission declared the data-processing industry “a major force in the American economy,” and predicted “its importance to the economy will increase in both absolute and relative terms in the years ahead.” But it was also obvious that the new industry, as it ran on AT&T’s lines, was vulnerable to and could be destroyed by the monopolist, whose jealousy was legendary. As the commission stated in 1976: “We were concerned about the possibility that [the Bell companies] might favor their own data processing activities by discriminatory services, cross-subsidization, improper pricing of common carrier services, and related anticompetitive practices and activities.”
As US district judge Harold Greene later put it:
That the ability for abuse exists as does the incentive, of that there can also be no doubt. As stated above, information services are fragile, and because of their fragility, time-sensitivity, and their negative reactions to even small degradations in transmission quality and speed, they are most easily subject to destruction by those who control their transmission.
By 1970, the commission had put in place the first rules meant to protect over-the-top services from discriminatory or unfair treatment by AT&T. By 1976 it had a working framework to distinguish “basic” communications services from what it then called “enhanced” services—that is, the equivalent of today’s applications, like Skype, or the web. A major goal of these rules, known as the Computer Inquiries, was to protect the stuff “on” the network from the network carrying the traffic. They are therefore fairly described as the “first” net neutrality rules, or the direct ancestor of today’s net neutrality rules.