Net Neutrality – Time To Catch Up?

On 18th May 2017, a pivotal vote was cast by the Federal Communications Committee in America. This vote began the reversal of what is commonly known as Net Neutrality, the regulation that all internet traffic is to be treated of equal importance, irrespective of its contents.

 

July 12th saw the unprecedented coming together of some of the largest companies (including Netflix and Twitter), consumer groups (such as Greenpeace) and small start-ups in a planned protest in support of an open internet. It was essentially an internet blackout, where websites were changed to reflect a potential future without net neutrality. But why all the fuss? Is it really that newsworthy?

The strict regulation of Internet Service Providers (ISPs), such as BT and Sky, back in 2015 was hailed as a landmark achievement for consumers, ensuring that they would be safeguarded against anti-competitive practices. The successful lobbying by ISPs means that the internet landscape could begin to change dramatically, and although these are American regulations under threat, there will likely be a far-reaching impact. Whilst the EU has its own net neutrality rules, there is a risk that Brexit will result in a fresh set of regulations, especially if coupled with pressure from UK Telcos. In fact, net neutrality in the UK is already under threat from both the government and the private sector.

Net neutrality, without the buzzwords

The main motivation for ISPs wishing to undo regulations is that some content providers are essentially using ‘more internet’ (i.e. bandwidth) than others, and it is understandable that ISPs should be able to charge these customers more for the relatively larger use of their infrastructure. Whilst there is nothing necessarily wrong with this logic, it does pave the way for more troublesome scenarios.

For example, ISPs may allow companies to pay so that their customers can have faster access to content, which could result in a two-tiered internet. If you are a company that relies heavily on the internet to conduct business, you may wish to use this fast lane to get an edge over your competition. Now, whilst this appears an attractive proposition to those ISPs looking to bolster revenues and reinvestments, is this scenario likely to benefit anybody except the incumbent? With the barriers to entry potentially raised even higher, innovation could be stifled.

Implications for the consumer

The ability for an ISP to have an unreserved ability to control access to the internet should raise some eyebrows. Potential scenarios, from blocking VoIP (1, 2) calls to restricting certain protocols (such as BitTorrent file sharing) should worry you. In fact, it is entirely possible that all competition to the highest bidder could be blocked. There is no guarantee that the general public would be safe from the invention of a ‘slow lane’ – unless they pay up. The dangers of an unregulated internet supply are that ultimately, the internet could end up more like cable TV (with its pay walls) than the open to all public library or Google search.

Fortunately, a dual-carriageway style internet would never be considered where there is no upside to the consumer, and there are real world benefits even today. Virgin Mobile have been experimenting with what is called ‘zero-rating’ (allowing access to certain services without it eating into a user’s data allowance) for WhatsApp and Facebook Messenger. Although this makes WhatsApp and Facebook Messenger an even more attractive offering, Virgin are running the risk of stifling competition. Legislation also passed within the Digital Economy Bill to begin blocking undesirable websites. No one can argue that safety is of key importance, but societies must be wary of censorship as an erosion of freedom that can set a dangerous precedent for internet filtering as seen in less democratic countries.

ISP Benefits

From the ISP’s point of view, deregulation is a gateway to more competitive business practices. If an ISP is using a vast amount of their infrastructure to support just one customer (such as video behemoth YouTube), it is reasonable that higher usage means higher costs. The ability to charge content providers these variable premiums could reduce the barriers to entry and enable more start-ups, as a company would only pay more once they were successful and could afford it. The ability to increase revenues from those who can afford it means that reinvestment into infrastructure increases, resulting in affordable, lightning-fast internet access for all.

Conversely, this could also serve to suffocate competition by inadvertently raising the barriers to entry of aspiring ISPs. Those without the ability to offer attractive offerings to their customers would soon be ignored, guaranteeing another boon for established providers.

But it is not all doom and gloom, as there are innumerable potential benefits for the consumer. Examples include the implementation of co-play agreements between ISPs and content providers to provide a stronger, more distinctive offering, or a cheaper internet connection if it is essentially being subsidised. These are both attractive propositions, and by no means the only possibilities. At the very least, they must be as attractive as a well-regulated and competitive market, as these two drivers often provide the biggest benefit to the consumer.

The Future

It is difficult to say what the effects will be, as many internet-reliant companies do not operate solely in their country of operation. The only way to know how corporate operations will be impacted is to wait and see what future regulations dictate.

The internet has become a key part of the infrastructure that underpins society and as technology grows, we are still unsure how to treat it. No one can deny that mass communication can be a force for good, but equally for bad. There are arguments for unrestricted usage, and equally convincing ones for restricted access. Whilst many see open internet access as a future human right, others see it is a privilege and an opportunity to bolster their share prices.

The million-pound question is: at what point is regulation required, and how restrictive should it be, whilst not being overly burdensome? Net neutrality isn’t going anywhere just yet, but for how much longer will it remain recognisable? Only time will tell what a future version will look like, but given that the UK government has a track-record of adjusting European legislation, this is sure to factor in. It is probable that post-Brexit there will be a revamp to a plethora of digital rights laws, and that net neutrality will be one of the affected. Those within the Telco industry would do well to pre-empt these changes and be ready for the benefits they might offer.

 

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