Net neutrality, according to Wikipedia is:
…a principle of network design. It asserts that, in order to promote innovation, network service providers such as telephone and cable internet companies should not be permitted to dictate how those networks are used (i.e., not permitted to ban certain types of programs, to ban certain types of devices connecting to the network, or to favor carriage of traffic to certain web sites over others).
Many countries actually have laws that protect Net neutrality – the United States is NOT one of those. This sets the stage for earlier this year, when Congress decided to update the Telecommunications Act of 1996, which covers phone, cable TV, and Internet access. As the need for more and better bandwidth increases, the telecoms – companies like SBC, Verizon, and Comcast have been looking for ways to increase their revenue so they can improve and enhance their services like video on demand, and online gaming. That sounds reasonable, except when you remember that the telecoms are in fact government-granted monopolies (that’s why you don’t have a choice of cable companies when you want to get cable TV, for instance). Net neutrality supporters argue that those very government-granted monopolies can at any time they choose (unless they are federally regulated) suddenly cut or choke bandwidth for services they don’t like/don’t support/don’t see the need for. The telecoms argue that, rather than limit what consumers get on the Internet, it will enhance what they get, at least for those who can afford the (potentially) increased costs of those services.
You can read more about the arguments for and against Net neutrality in this L.A. Times article, and you can also listen to a Senate hearing from Februrary 2006 (Real Player format audio) on the subject.