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.
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?
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,