Net Neutrality: A Big Day

Today in a 3-2 vote the Federal Communications Commission (FCC) approved “net neutrality”. This means that no one has control over a free and open internet. Before service providers like Comcast, handled different internet activities in different ways and at different costs. Now internet service providers will be regulated on how they handle the data flowing over their fiber and wireless networks. There will no longer be deals that determine a “pecking order” in terms of preferential treatment to providers. Netflix will not be able to pay Comcast for faster access and conversely the ISP cannot force Netflix to make the contract.

Reactions were varied across the social media world today and included this nasty tweet from Verizon.

verizon

Here they are comparing the regulations set today to regulations of 1930s standards. To me this just seems Ludacris because today’s world is connected in millions of ways that did not even exist in the pre WWII era.  Back to the drawing board for the lobbyists I guess…

For consumers this is considered a huge win and will protect their interests on many fronts. By blocking paid prioritization on the web, innovation, and economic growth can be spurred. In a world where more connectivity equals more influence and power, keeping a level playing field will strengthen the internet as an open platform.  For example, with the new rules, both Netflix and Amazon prime will load at the same speeds regardless of your provider. The question now is: will consumers notice a reduction or an increase in speed?

There could be some setbacks for consumers however. AT&T has warned that because they will be generating less revenue without deals struck with content providers, they may have to hold back on continued fiber optic investment.

The president also shared his opinion on the matter… notice the lower case initials?

wh tweet

The President also gave a shout out via twitter to the Reddit community for keeping the internet a free and open platform. I thought this was interesting because Reddit does not seem like a “presidential” website.

The split was 3-2, and no party lines were crossed as the Democrats won out on the day.

At the most general level, those applauding the FCC today consider the net neutral vote to be a victory for free speech. This makes some sense because I would argue that in today’s interconnected world American’s use the internet as their primary place for speech and expression.

Those opposed to the decision argue that the internet is no longer innovative and capitalistic (which is what has driven it to where it is today), rather with the new rules it will become a place for the government to micromanage at a costly amount.

I think that for small businesses in the service provider industry a very costly and hard barrier to entry may have been broken today. If all businesses can now leverage the internet in the same way, many businesses could enter the market. A deal would no longer have to be cut to get content delivered faster, and this I think is what makes it a great opportunity for smaller/ less heard of businesses. Big businesses are also applauding the deal despite having potentially more competitors. Netflix, like I mentioned earlier, no longer has to pay to deliver their content to consumers faster. The hope is that the money saved will go into innovation and spur future projects. If Netflix can get another House of Cards type response from the market, I am sure many would applaud.

I think both sides have valid points and I think that in the coming months the consumer and business implications will become more apparent.

Signing off and happy spring breaking,

RB

6 comments

  1. I really enjoyed this post. As you mentioned, net neutrality is a huge issue and it has massive ramifications for the future of the internet and business around the country. Though the FCC approved it, net neutrality will continue to be important in American politics. As this article discusses, there will be a ton of lawsuits challenging the FCC’s orders, furthering the political divide on the topic. http://arstechnica.com/tech-policy/2015/02/bring-on-the-lawsuits-fcc-chairman-says-net-neutrality-will-survive/. On another note, I wonder how this will affect big companies like Facebook. Maybe I’m still confused about what net neutrality really means, but I imagine that it will have an influence on the way Facebook and other large SM companies evolve their product.

  2. Great post and I agree, while the FCC decided, I don’t see this going away. The struggle we face is how to drive innovation while taking away a source of income from them. The US stands at #8 for speed so it will be interesting how this plays out as years pass and nothing changes. As a user, i am happy to see Net Neutrality because I wont see a rise in price in amazon prime or netflix. However, I do fear what this means to my cable/internet bill. If companies do want to improve their infrastructure, this will now place the burden entirely on the users unless any federal funds are used to offset the costs.

  3. For me, I never was able to wrap my head around the debate over net neutrality. It seemed like it should be a fair and easy way for everyone to level the playing field on the Internet. I saw it in the same way you did, with your freedom of speech comment. Why wouldn’t the answer be so simple? Part of my indifference to this topic probably stemmed from the idea that I do not currently pay for my own cable or wireless internet. As a result, I would not see an increase in rates since cable companies cannot be collecting funds from third party vendors. I simply saw it from the idea that every person (whether you are a small business or a part of the Big 4 Technology Giants) should have equal opportunity when it comes to the internet. I do call into question whether or not there was enough transparency and education regarding net neutrality. We discussed it in my E-Commerce class last semester, and many students were uneducated or unaware on the issues surrounding the topic. I agree with @tomaskj67 that this will probably not go away, but do we think that there could have been more information surrounding the issue so that the public was informed?

  4. Before reading this post, I was only vaguely familiar with the Net Neutrality vote the past week by the FCC. I think it is very interesting that something of this magnitude and that could effect our every day lives was left in the dark by so many. After reading this post, I too am happy (as a consumer) that I will not have to pay more for Netflix or other subscriptions not owned by the massive cable companies. I think it is interesting to think about if this would have passed… would Netflix survive or would Comcast launch a streaming site and eventually dominate the industry? Furthermore, I am very interested in the effects of this vote on social media. Although my insight on this topic is minimal, I think we would have seen a much more drastic effect on SM sites if the vote would have gone the other way. However, that is something we might need to ask Prof. Kane! Great post!

  5. I’m all for Net Neutrality. I do think the ISP’s have a point that certain companies (i.e. Netflix, which makes up 25% of internet traffic at times) are benefitting disproportionately from Net Neutrality. I have no objection to ISPs charging more in these very distinct situations.

  6. I really enjoyed this post! I recently learned the importance of Net Neutrality and agree with the FCC ruling. Thanks to Net Neutrality, all companies have the opportunity to grow. Today, we can’t live without Netflix, but it wasn’t always this big. At one point, it was also a small company fighting for market share. Because of Net Neutrality, new small companies have the same opportunity Netflix had years ago to disrupt an industry and change the way we do things.

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