Tiered service structures allow users to select from a small set of tiers at progressively increasing price points to receive the product or products best suited to their needs. Such systems are frequently seen in the telecommunications field, specifically when it comes to wireless service, digital and cable television options, and broadband internet access. When a wireless company, for example, charges customers different amounts based on the number of cellphone voice minutes, text messages, amount of data and other features they desire, the company is utilizing the principle of tiered service. This is also seen in charging different prices for services such as the speed of one's internet connection and the number of cable television channels one has access to. Tiered pricing allows customers access to these services who may not otherwise due to financial constraints, ultimately reflecting the diversity of consumer needs and resources. Tiered service helps to keep quality of service standards for high-bandwidth applications like streaming video or VoIP. This comes at a cost of increasing costs for better service levels. Major players in the net neutrality debate have proposed tiered internet so content providers who pay more to Internet service providers get better quality service.
History It was not until the Internet began its rapid evolution that tiered services became a controversial issue. And it was not until the early 2000s that Internet carriers considered the option of abandoning net neutrality policies. In 2005, the FCC changed the way broadband service providers are regulated. This made broadband service providers "information services" instead of "telecommunications services". This means broadband service providers were no longer subject to common carrier regulations. Since the beginning of the twentieth century, common carriage guidelines required the quality of service must be the same for all users, preventing one customer from being favored over another. During the first decades of the 1900s, this policy related directly to the telephone industry, and AT&T specifically. However, in recent decades, the policy has grown to encompass a broader range of communication services. Preventing preferential treatment of customers in the realm of the Internet is referred to as the policy of net neutrality. In the US, the former chairman of the Federal Communications Commission (FCC), Michael Powell, considered net neutrality to be fundamental to the success of the Internet and he viewed it as one of the basic rules to maintaining freedom on the Internet. The FCC continued its skepticism of tiered pricing for quite some time, and it was not until concerns about the availability of the spectrum began to surface that things began to change. In 2010, FCC Chairman Julius Genachowski announced that the benefits of tiered pricing include helping to prevent data backups on networks. Genachowski expressed his fear of a coming "spectrum crisis" as a result of the increase in smartphone usage ultimately clogging carrier networks. The FCC suggested a number of solutions to the problem including greater use of the unlicensed Wi-Fi spectrum, more femtocells, and more efficient arrangement of cellular towers, but even these measures were not believed to be enough to keep spectrum bands open. Attempts have been made to put price controls on tiered service. United States Congress put a bill forth to prevent a "two-tiered pricing scheme with priority service." The bill did not pass Congress, but allowed the FCC to stop ISPs from blocking websites. The way ISPs tier services for content providers and application providers is through "access-tiering". This is when a network operator grants bandwidth priority to those willing to pay for quality service. "Consumer-tiering" is where different speeds are marketed to consumers and prices are based on the consumers willingness to pay.
Net neutrality Net neutrality is the practice of keeping Internet service providers from offering tiered service and controlling the ability to block out competition by restricting certain pipelines within the Internet. By blocking these pipelines, the provider creates an unfair transfer of packets across the Internet, diminishing the quality of service. Internet service providers seek to discriminate against peer-to-peer (P2P) communication, FTP, online games, and high bandwidth activities, such as video streaming. This practice is called bandwidth throttling. In 2017, the FCC Voted to repeal "Net Neutrality" in their "Restoring Internet Freedom" Order. Fulling taking effect on June 11, 2018, the initiative removed barriers of the Title II regulations that had been placed on the Internet Service Providers in 2015. Due to the repeal, Internet Service Providers can initiate tiered internet services and are no longer required to treat all online traffic as equal. With the removed regulations, Internet Service Providers can move forward with creating tiered internet services. Proponents of the repeal argue that the tiered internet service will allow for increased innovation in the internet. Detractors argue that it will create anti-consumer measures that crowd out emerging businesses and create a bundling system that is not within consumer preference.
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