Repealing Net Neutrality: How Will Businesses be Effected?
2015, the Federal Communications Commission (FCC) reclassified Internet
service providers as entities akin to a public utility. This was known
as the Open Internet Order (OIO) and mandated that ISPs could not block,
throttle, or prioritize internet traffic. Prior to 2015, ISPs were
under the eye of the Federal Trade Commission and giants like Comcast
and Verizon were held accountable by the Telecommunications Act of 1996.
The act made a clear distinction between the fledgling information
services, and telecommunication services like phone carriers. The
distinction—information services were lightly regulated; phone providers
were highly regulated.
That light-touch regulation is what the current FCC Chairman would like to return to as he seeks to repeal what is known as Net Neutrality with the Internet Freedom order. But what a difference 20 years has made. To individual consumers the Internet has become a necessity, and the landline phone is going the way of the dinosaurs. However, both remain critical to businesses of all sizes. And, while a major hubbub has been made about how repealing the OIO would affect individual consumers, how will it affect businesses?
What has happened in the past is bandwidth throttling. Comcast was found guilty of this in 2007. They were throttling bandwidth to BitTorrent, a known file sharing institution. Earlier this year the state of New York sued Time Warner Cable (now Charter Spectrum) for throttling speeds to Netflix and Riot Games customers. They also forced Netflix and Riot Games to pay more for access to their customers; once they paid, service improved.
The FCC recently released a Myth vs. Fact sheet about the Internet Freedom order which states:
MYTH: Broadband providers will charge you a premium if you want to reach certain online content.
FACT: This didn’t happen before the Obama Administration’s 2015 heavy-handed Internet regulations, and it won’t happen after they are repealed.
MYTH: This will result in “fast lanes” and “slow lanes” on the Internet that will worsen consumers’ online experience.
FACT: Restoring Internet freedom will lead to better, faster, and cheaper broadband for consumers and give startups that need priority access (such as telehealth applications) the chance to offer new services to consumers.
Dubious use of the word fact aside, this release offers no proof that ISPs will do what the FCC is assuming they will. Interestingly enough, one of their “Facts” basically states that the Internet Freedom order will indeed lead to fast and slow lanes. In their words: “priority access.” Comcast and Time Warner have already proved that they are willing and able to choose the bandwidth at which consumers visit certain websites.
This is how the repeal of Net Neutrality may affect businesses, especially small to medium-sized businesses. It will be possible for ISPs to charge companies to provide “premium” or “fast-lane” access to their websites. This could be especially troubling for businesses that create Internet-based content, online-only retailers, or companies in competition with ISPs or ISP subsidiaries. For example, a regional fiber Internet provider offering cheaper, faster Internet to a specific part of a metropolitan area. Imagine typing “fastest Internet in my city” into Google on your Comcast Internet connection and the only results you see are for Comcast Xfinity services, or websites for other ISPs that take minutes to load.
Millions of people research businesses or restaurants online prior to obtaining their goods or services. Research has shown that users will leave a web page that takes longer than three seconds to load, and are not likely to return. With the Internet Freedom order, ISPs will have the ability to effectively censor what sites consumers see simply by slowing down load times. This could potentially cripple any online retailers that do not, or cannot pay ISPs to enable high speed access to their online presence. Larger businesses may be more willing and able to pay fees associated with bandwidth and load times.
On the other hand, a return to light-touch regulations could be a boon for small, regional ISPs in situations where they are they only provider of broadband services. They would be allowed to create new services like fast and slow lane packages and more than likely increase profit as consumers would have few, if any alternatives. Whether this would spur innovation as the FCC claims, remains to be seen.
Overall, the repeal of Net Neutrality rules will impact us all. We will not know the full impact until the rules are repealed and ISPs return to pre-2015 regulations. But, with what we know ISPs have been accused of or proven to do previously it is rather safe to bet that once deregulated, corporate giants like Comcast, Verizon and Charter Spectrum will take advantage of the situation to raise their profits and advance their other business interests as much as possible. It will be up to consumers, businesses and individuals alike, to provide feedback as to whether or not they will pay for altered services.