Net neutrality (formerly known as the end-to-end principle) means that the people who provide connections to the Internet don't get to favor some bits over others. This principle is not only under attack, it's about to be regulated out of existence. Here's why it matters:
Innovation. Innovation on the Internet happens in Internet time because bits flow freely. A good idea can compete even if it comes from a kid in a garage because the kid doesn't have to ask permission and doesn't have to raise enough capital to make sure his bits are moving as quickly and reliably as everyone else's. If the carriers are allowed to charge for speedy and reliable delivery, the people most affected will be the beginners and the garage shops.
Open markets. In a non-neutral environment, carriers can provide incentives for using one service and disincentives for using others. For example, Shaw (a major Canadian cableco) offers its own Internet telephone service, but charges users $10/month to use anyone else's. The dominant — and frequently monopolistic — market positions held by carriers therefore gets extended into the market for online services.
Free speech. AOL recently "accidentally" blocked email critical of it. Canada's version of AT&T, Telus, blocked access to a site supporting workers with whom it was negotiating. How long before providers routinely block access to sites they deem inappropriate for their customers, for their customers' own good, of course?
Creativity. Net neutrality is being legislated away in part to make the Internet safe for Hollywood content. Carriers already block users from being full-fledged creators on the Internet by providing paltry upload capacity. Why allow the carriers to give fast-lane preference to Hollywood's content? And why give them the power to restrict content they think may rile the copyright totalitarians?
Democracy. Remember when democracy had something to do with all people being equal? With ensuring that our institutions don't get too powerful? Net neutrality has made the Internet a great equalizer, not just for Americans but for voices around the world. The end of Net neutrality puts control over the flow of bits in the hands of powers that are literally entrenched.