How the Repeal of the Net Neutrality Rules Might Affect Your Business

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The U.S. Federal Communications Commission’s repeal of the net neutrality rules has made many people apprehensive about how it will change Internet access and content. Here are two schools of thought on how it might affect businesses.

On December 14, 2017, the U.S. Federal Communications Commission (FCC) repealed the net neutrality rules it had put in place in 2015. The repeal has made many businesses, consumers, and even politicians apprehensive about how it will change Internet access and content.

To understand the possible effects that the repeal will have, you first need to know what net neutrality is referring to. Net neutrality is the idea that Internet service providers (ISPs) must treat all data equally. This means that ISPs cannot:

  • Block websites’ content, applications, and services (provided the sites do not break any laws).
  • Intentionally slow down (i.e., throttle) websites’ content, applications, and services.
  • Charge fees for favored treatment. In other words, they cannot create “fast lanes” of Internet traffic to and from websites for web content producers willing to pay extra for it. ISPs have to offer producers the same service for the same price.

It is too early to tell how the repeal of the net neutrality rules will affect Internet access and content. Here is a look at what both proponents and opponents think will happen.

Proponents’ Viewpoint

People who support the repeal believe that it will:

  • Spur innovation. New services (e.g., gaming) will pop up because web content producers can be guaranteed access to a fast lane of Internet traffic.
  • Allow ISPs to set fairer pricing. From the ISP perspective, all web content is not created equal. For example, live streaming a program requires much more of an ISP’s resources than loading a web page. Allowing ISPs to charge web content producers based on how much bandwidth they consume or how fast their content must be delivered will be a fairer system than having all the web content producers pay same price.
  • Lead to improved services. ISPs will be able to use the extra revenue generated to improve their networks. As a result, customers (both businesses and consumers) will have faster and better access to web content and services.
  • Reduce red tape and costs. Getting the government out of the Internet regulatory business will reduce red tape and regulation-related costs. This will enable ISPs to spend more time and money on improving their networks.
  • Promote the free market. With no regulations to get in the way, the free market will prevail, benefiting both customers and ISPs.

Opponents’ Viewpoint

People who oppose the repeal believe that it will:

  • Stunt innovation. Many innovators and startup companies will not be able to afford a fast lane for their web content. Having slow connections and their content buried in search engine results could lead to their downfall.
  • Increase the cost of doing business. To be on equal footing with competitors already in the fast lane, companies will have to pay for a fast lane. Businesses that do not have the money for this preferential treatment run the risk of losing existing customers and not attracting new ones.
  • Cost customers more money. Companies that pay the ISP fees to get in the fast lane will ultimately pass those costs onto the businesses and consumers that use their products and services.
  • Make ISP investors and executives richer. Most of the money generated from fast lanes will go straight into the pockets of ISP investors and executives rather than being used to improve networks.
  • Control what people see online. With no regulations prohibiting ISPs from giving preferential treatment to some websites while limiting the content of others, ISPs will have the ability to control what people see online, especially given that some telecommunications conglomerates own both ISPs and web content producers. For example, Comcast owns both Comcast Cable Communications (an ISP and cable TV provider) and NBCUniversal Media (a web content producer that operates many cable networks such as the USA Network and MSNBC). In these cases, ISPs will have incentive to limit or throttle competitors’ web content and give their own content preferential treatment.

Only Time Will Tell — But Maybe Not

It will take some time before we really know how the repeal is affecting Internet access and content — but there’s a chance we may never find out. Opponents are already taking action to try to reverse the decision. For example, the attorneys general of more than 20 states, several consumer groups, and even Mozilla have filed lawsuits to block the FCC’s repeal. Plus, some states are taking action at the local level. For instance, the governor of Montana has signed an order that says telecommunications companies cannot receive state contracts if they interfere with Internet traffic or favor higher-paying websites or apps.

There is one thing for certain, though. You will be hearing a lot more about net neutrality in the months to come.