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'Net neutrality' is likely to be rolled back: What it means for consumers

FARGO - Brandon Medenwald grew annoyed by dismal office "in and out" boards - so annoyed that he decided to build a smartphone application to better track people as they came and went from the workplace.

Emma Steger, Chair of the District 45 Dem. Non-Partisan League, protests the planned reversal of net neutrality Tuesday, Dec. 5, 2017, in front of Congressman Kevin Cramer’s office in Fargo. (Michael Vosburg / Forum News Service)
Emma Steger, Chair of the District 45 Dem. Non-Partisan League, protests the planned reversal of net neutrality Tuesday, Dec. 5, 2017, in front of Congressman Kevin Cramer’s office in Fargo. (Michael Vosburg / Forum News Service)

FARGO – Brandon Medenwald grew annoyed by dismal office “in and out” boards – so annoyed that he decided to build a smartphone application to better track people as they came and went from the workplace.

In collaboration with a couple of friends, he developed an app called Simple In/Out, which they made available free over the internet. Over time, users flocked to the app, and many were willing to pay for a version with more features.

A small company was born, Simply Made Apps, based in downtown Fargo with Medenwald as its co-founder and web developer. Now, six years later, Medenwald worries that the firm might die in the face of regulatory changes he believes could drastically alter the way people experience the internet.

The threat: the Federal Communication Commission’s expected repeal next week of so-called “net neutrality” regulations intended to keep the internet open to all, without fast and slow lanes, tiered pricing, or “throttling back” download speeds for heavy users.

“Our entire business is based on the internet,” Medenwald said. “We have thousands of customers all around the world.”

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His worries that costs could rise and internet access could become more restrictive are based on abuses that happened before the FCC adopted the net neutrality regulations in 2015.

In one case, large internet providers including AT&T, Verizon and T-Mobile temporarily blocked Google Wallet, a service for making electronic payments.

“Google’s a very large company with a lot of money and even they couldn’t overrule them,” he said.

If net neutrality rules go away, Medenwald worries that he could be forced to negotiate individually with internet service companies, and could be forced to pay more to maintain high-speed access – or be stuck with slow speeds that will turn away customers.

“If that happens to me I’m firing my employees and I’m out of business. Now, why would Verizon pick on me? Hopefully, that won’t happen. I’m a very small fish.”

He added, “On the internet, speed is a big deal.”

Local protests Medenwald is hardly alone in fearing that access to the internet, as well as price competitiveness and quality of services, could deteriorate without net neutrality protections.

Opponents have staged protests all over the country, including planned demonstrations outside Verizon stores in Fargo, Bismarck, Grand Forks and Minot. Last week, 15 or 20 protesters showed up outside the Fargo field office of Rep. Kevin Cramer, R-N.D., who supports repealing the regulations.

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One of them is Karen Halsa, who telecommutes from her home in Moorhead. She works as an analyst for a Twin Cities-based health insurance company.

She fears that internet service providers will charge more for big-data customers, such as services that stream music or movies.

“Are they going to charge certain websites more?” she asked. “That’s what I’m worried about. They’re going to separate out fast lanes and slow lanes. Maybe not right away. Down the road, who knows?”

Halsa logs online for her job every workday from home, and her six children also are heavy internet consumers, including sons who play video games, so any price increases or deterioration in service will be disruptive, she said.

“I work from home, so I’m on there every day,” Halsa said. In today’s world, fast and reliable internet service is essential, comparable to electricity, and should be regulated as a utility, she said.

‘Regulatory overreach’ Cramer disagrees. Utilities are monopolies, he said, and consumers are not fans of monopoly services.

The congressman argues that net neutrality was an attempt to fix a telecommunications marketplace that wasn’t broken, and the “regulatory overreach” resulted in a decrease in investment in broadband networks of 5.6 percent by the 12 largest internet service providers  that will hurt consumers.

“They’ve rolled back their investment,” he said. Also, the net neutrality regulations placed broadband internet services under archaic, 1930s-vintage regulations drafted to regulate monopolistic “Ma Bell” telephone service, unsuited to today’s telecommunications marketplace.

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Cramer conceded that there had been a few abuses before net neutrality, but said the Federal Trade Commission has the authority and expertise to address those complaints. Also, Cramer said, it wasn’t in the internet service providers’ self-interest to treat their customers poorly.

Medenwald disputes Cramer’s claim that internet service providers have decreased their investment in the net neutrality era. The study bolstering that argument is flawed, he said, failing to capture important investment categories, and it measures only a small window of time. Also, Medenwald said, the flawed study ignores public statements the companies have made to investors about their plans to continue to invest significantly in their networks.

Sen. John Hoeven, R-N.D., has a position similar to Cramer’s. “The FCC’s proposed order will give Congress, the FTC and FCC the opportunity to work in a bipartisan, transparent fashion to update our communications policies to ensure the internet remains open, continues to attract investment, promotes competition and drives innovation,” Hoeven said in a statement.

Sen. Heidi Heitkamp, D-N.D., said she is “very concerned” about the FCC’s plan to repeal net neutrality rules, which she said protect basic fairness on the internet.

“Strong net neutrality rules protect consumers from harmful practices such as blocking, throttling and prioritization,” she said in a statement. “North Dakotans and small businesses lose out if their internet provider is allowed to infringe upon these basic principles – particularly if there is only one internet provider in your area, which is often the case in rural areas.”

‘We’ve never throttled’ Meanwhile, representatives of Midcontinent Communications, Cable ONE and the North Dakota Association of Telecommunication Cooperatives – all broadband providers – said customers will not be disadvantaged if the net neutrality regulations are lifted.

“I’d say for our Midco customers this will mean nothing at all,” said Justin Forde, Midco’s director of public policy in North Dakota. “We’ve never throttled traffic, prioritized it, blocked it, and we don’t intend to do those things when these regulations go away. It’s not the way we’ve done things.”

Trish Niemann, Cable ONE’s director of corporate communications, said the company supports “net neutrality provisions for a free and open internet” and has “always been committed to an open internet that gives our customers the freedom to be in charge of their online experience. And that will not change.”

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David Crothers, executive vice president and general manager of the North Dakota Association of Telecommunications Cooperatives, said his members will not penalize customers if net neutrality regulations are scrapped.

“We will never throttle traffic, we will never block, we will never slow it down,” he said. “That is something we would never do.”

On the other hand, he said North Dakota’s rural cooperatives and small independent broadband providers, whose territory covers more than 96 percent of the state, would like to be able to charge big content providers for the massive traffic they bring to networks.

Netflix, the popular movie-streaming service, for example, imposes huge demands on networks, which the co-ops and independents spend between $80 million and $100 million per year to upgrade – costs borne by customers, Crothers said.

“It’s every night, between 7 and 10 o’clock at night, over 50 percent of our traffic is Netflix,” he said. Crothers’ members would like the FCC to have the authority to adjudicate disputes broadband providers have with content providers, but that is not part of the proposed rule changes, he said.

Still, abuses of the kind Medenwald fears rarely occurred before net neutrality regulations took effect in February 2015, Crothers said.

“They all seem to be isolated examples,” he said, adding that the telecommunications world will, in many respects, essentially revert to the regulatory landscape before 2015 if the rules are repealed.

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Brandon Medenwald, right, and Brian Pattison work in their office space at Simply made Apps in downtown Fargo. Medenwald is a critic of the move by the Federal Communications Commission to eliminate "net neutrality" rules that defenders say ensure affordable and fair access to internet services. (David Samson / The Forum)
Brandon Medenwald, right, and Brian Pattison work in their office space at Simply made Apps in downtown Fargo. Medenwald is a critic of the move by the Federal Communications Commission to eliminate "net neutrality" rules that defenders say ensure affordable and fair access to internet services. (David Samson / The Forum)

Patrick Springer first joined The Forum in 1985. He covers a wide range of subjects including health care, energy and population trends. Email address: pspringer@forumcomm.com
Phone: 701-367-5294

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