What It Is
The underlying principle of Net neutrality is that Internet access should be considered a utility (like water, gas, or electricity), and treated like any other. As long as you pay your bills, the electric company doesn't care how you use their power. So it should be, with Internet Service Providers (ISPs).
Users should be able to use their bandwidth however they like - as long as it's legal.
Service providers shouldn't be able to give priority to any one aspect of the Internet.
Every website should be treated equally, when giving users the bandwidth they need.
The Internet should be (and remain) a free and open platform.
Advocates of Net neutrality don't want to give the ISPs too much power, because they fear it could be abused.
Net neutrality opponents argue that ISPs have the right to preferentially distribute their network between different services.
ISPs in turn consider themselves a technological driving force, and require additional sources of income to create even better, faster connections to the Internet.
Netflix, the streaming video service, is often quoted as an example. Unlike other sites like YouTube (which try to optimise their content), Netflix will generally use as much of the data stream as it can - often up to a third of all Internet traffic. If there's loads of bandwidth available, it'll send UltraHD. Only if the pipe is slow will Netflix compress and optimise.
Asking Netflix to pay extra, for its additional consumption seems only reasonable.
Going further, anti-Net neutrality advocates stress that ISPs should be able to compete freely, without government intervention. They should be allowed to manage their networks differently, and provide alternatives.
Don't like it, that Netflix is slower on Comcast than it is on AT&T? Switch to AT&T. And so on.
If Net neutrality isn't observed:
ISPs will be able to distribute bandwidth differently, depending on the service.
They'll be able to create tiers of Internet service; tariffs for priority access, rather than bandwidth speeds.
ISPs could charge high-bandwidth services extra money, for using their platforms.
Users could be charged extra, to access services like Netflix, or Facebook.
Certain services could be provided at different speeds - or not at all, if unwilling (or unable) to pay the premium.
What The Law Says
In the US, the Federal Communications Commission (FCC) released a set of Net neutrality rules for ISPs on December 21, 2010:
The FCC requires ISPs to publicly disclose their network management practices, so users can make informed decisions when purchasing Internet service. An ISP has to say what speeds it offers, what types of applications work over that speed, how it inspects traffic, etc.
Providers of home Internet (so-called "wired ISPs") aren't allowed to block any legal Web content, applications, or services.
Wired ISPs also cannot slow down traffic, as this often renders a service unusable, and is really no different from outright blocking.
Wired ISPs can't discriminate against legal network traffic. This applies to the blocking of competitive services, or attempts to stifle free speech (e.g. by discriminating against political outlets with views different from the ISP or its parent company).
Mobile ISPs aren't subject to the same rules. They're still prohibited from blocking services that compete directly with their own - but they can continue to discriminate. You could therefore find an Internet service blocked or deliberately slowed down, when accessing it from your smartphone.
Mobile ISPs can charge you extra to access certain services, like Facebook or Netflix.
App stores are exempt from these rules. So the App Store and Android Market can be as closed as they wish.
Managed services (which companies pay extra for, and require a higher level of service) are also exempt.
What A Judge Said
The January 2014 ruling for Verizon vs. FCC came down in favour of the cable operators, forcing the FCC into a rethink of its own rules. Internet content can no longer be treated equally.
The FCC's five commissioners voted to seek public comment on "fast lanes" that allow your ISP to charge popular online services to connect you at higher speeds. This "paid prioritisation" is in direct contrast to the original intent of Net neutrality.
What This Means, for YOU
The Verizon ruling is a problem for online services that will have to pay new fees, budding entrepreneurs who can't, and Net neutrality advocates, who saw this coming.
ISPs are receiving money from their subscribers to access the internet - including "priority" services like Netflix. Now they're getting additional funds from Netflix, to access those same customers.
And ultimately, it's you and me - the largely unaware Internet population - who'll end up footing the bill.
What You Can Do
CollegeHumor has created an amusing video that explains Net neutrality and why it matters. It's worth checking out.
The FCC has a complaint system set up for citizens to air their views on communications-related topics. If your organisation has$200 to spend on the filing fee, you can lodge a formal complaint - which is often like a court hearing.
Net neutrality advocates can visit SavetheInternet.com, while HandsOff.org is for anti-Net neutrality voices. Each site has links to other ways you can talk to government officials, write letters, and sign petitions.