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Net neutrality protest
Obama in the Backseat: Rally to Save the Internet in July in California. Photograph: Free Press/flickr
Obama in the Backseat: Rally to Save the Internet in July in California. Photograph: Free Press/flickr

Cord cutters on net neutrality: 'It would be the end of wild wild west of the internet'

This article is more than 9 years old

The ‘awe-inspiring’ FCC internet protections leave cord cutters wanting. Their main complaint? Lack of competition among internet providers

Every morning as Carla Astudillo gets ready for work, she puts on the news. But instead of turning on the TV, Astudillo’s headlines come to her from her computer. Astudillo is a cord cutter and she’s not the only one.

About 7.6m US households no longer get cable. From 2010 to 2014, the number of cord cutters – those who have decided to forgo life with cable and opted to get their TV and news on the internet – increased by 44%.

It is a seismic shift that has helped trigger the largest cable merger in history, Comcast’s proposed takeover of Time Warner, and is at the heart of the fierce row being fought out in Washington over new rules to protect net neutrality – the concept that all legal content and applications should have equal access to the internet.

Many cable cutters are paying little attention to the clash of the titans. For them it’s about cost and convenience. But you can bet that the titans are paying attention to them.

Astudillo, a 27-year-old data journalist for NJ Advance Media, canceled her cable in 2012. Back then, even with cable channels at her disposal, she increasingly found herself watching shows on Hulu and Netflix. The two services made the transition easier. Of course, the $30 to $40 that she now saves each month didn’t hurt either.

Right now, she pays $59 a month for her Optimum internet connection and $7.99 a month for a Netflix account she was paying for anyway. She is considering upgrading to Hulu Plus, which would cost her an additional $7.99.

She says she has given little thought to how an end to net neutrality will affect her internet and TV-watching habits. She is, however, worried about the future of open internet and innovation that brought us services such as Netflix. “I feel like it would be the end of wild wild west of the internet, innovation and all of these good things,” she said.

Most consumers have remained blissfully unaware of the net neutrality debate or how its outcome might affect them. Broadband’s regulator the Federal Communication Commission (FCC) received a record 4m comments on its open internet proposal spurred on internet activists and aided by John Oliver. But in 2013, 74.4% of all US households told the Census bureau that they had internet. Four million is just a small fraction of that.

“I don’t pay enough attention to [the net neutrality debate], honestly,” says Lauren Pavin, a 32-year-old coffee shop manager in Baltimore.

She and her boyfriend are on the cusp of cutting the cord. This past Christmas, Pavin received Apple TV as a present. They already subscribe to Netflix and are just waiting for HBO to provide a stand alone service, before their do away with their cable bill. “Between [HBO] and Netflix, that’s all we watch,” she said.

Her cable and internet subscription with Comcast costs Pavin about $140 a month. Even after cutting the cable, she might have to stay with Comcast, as that’s the company that services the majority of the Baltimore area.

Pavin has little hope that net neutrality will fix her internet troubles.

“I wish the connection was faster but ... it’s Comcast. It’s a terrible internet service in general,” she says. In the six months that she has lived in Baltimore, she has experienced monthly internet outages.

comcast
Comcast: not exactly a favorite among consumers. Photograph: Matt Rourke/AP

Cutting the cord may sound like you’re hurting Big Cable but the money they lose on one end they make back at the other. Time Warner’s cable subscriptions have been declining for years and its revenue from video subscriptions drops millions of dollars a month. The upside is that the company’s high speed internet subscriptions are going up faster than its cable subscription was going down – making up for all the losses.

After intense lobbying by proponents net neutrality rules likely to be voted through this week will mean the cable firms can not slow online services or offer fast lanes to others. The regulations are meant to maintain a level playing field that should allow new video services to woo cable cutters just as Netflix and Hulu have in the past.

But those rules are already under attack from some Republicans and will be subject to an immediate challenge from the cable industry, which argues the FCC has gone too far.

cable map promo

And in the meantime cable cutters bemoaning their lack of choice face an even more consolidated market. If the Comcast/Time Warner deals goes through, according to the FCC’s measures some 63% of US consumers will only have one choice of broadband provider.

Proponents of net neutrality like Neil Hunt, chief product officer at Netflix, have previously bemoaned the lack of competition among internet service providers.

“The reality in this country is that we don’t really have competition for which cable provider you really get your broadband from,” Hunt told the Guardian last year. And as such, if companies like Netflix want to reach consumers in all parts of the US, they have to find a way to work with the particular providers servicing those individual areas.

The net neutrality debate will enter a new phase this week – but it won’t end here. Not long from now the FCC will decide whether or not to allow Comcast to takeover Time Warner. While cable cutters may feel they are reshaping an industry, close inspection suggests the industry is still very much in control.

Cable companies are “absolutely worried about the changing environment”, says Bruce Leichtman, president and principal analyst at Leichtman Research Group. “But – for the cable specifically – while they are worried about losing TV subscribers, they also are the providers of broadband service. So, if someone is going to get Netflix or Hulu, they are going to need broadband service and that, in the majority of places, is the cable company.”

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