The Death of Net Neutrality: A Net Loss for Your Business?
Company Note: This opinion article does not necessarily reflect the philosophy of Simply180. Like many companies, we are comprised of people with varying views, which we accept and protect.
The whole concept of net neutrality has been floating around for a number of years and now spans two administrations with their own views of the role of government. Obama was pro-regulation, based on the idea that the people needed to be protected from unchecked business practices. Trump, the deregulation president, is systematically changing or ending many of Obama’s regulatory policies, based on the concept that what’s good for (big) business is good for the economy and, ultimately, good for the rest of us.
The purpose of this opinion article is not solely to promote my view. I will examine both sides of the issue and present my view on the net effect on the FCC’s policy on small-to-medium-sized businesses who are increasingly leveraging digital media (e.g., PPC and SEO) to build their businesses.
What is Net Neutrality?
One of the great, democratizing effects of the internet has always been its openness to ideas and the unfettered distribution of information. That’s the way it’s been and that’s what most people and businesses like about it. Net neutrality has been maintained to level this playing field of access to data, ideas and technology. And the key concept: ISPs are obligated to treat all legal Internet data equally. They can’t throttle (slow down), block websites or applications, or determine who pays for faster access. There’s no pecking order of free or paid information (Of course, I’m not talking about Google Adwords, Facebook Ads or other forms of paid digital, which I will get to a bit later).
Why Is the FCC Abandoning Net Neutrality?
I will be presenting the various sides of this story. And quite frankly, it could take some time after the potential December 14, 2017 enactment, before any of us know what it means for marketers, businesses and consumers. Right now it’s all speculation. I don’t even know exactly how it will affect my company, Simply180, a digital marketing and advertising agency in Boca Raton, FL.
So let’s take a look at the pro and cons of dismantling or preserving net neutrality, beginning with the FCC’s favoring the demise of the concept. Their argument is based on a viewpoint proposed by the new FCC Chairman, Ajit Pai, who wants to “restore internet freedom and eliminate heavy-handed internet regulation. (Many opponents say this “freedom” could have a very steep price!) Following are some of the key anti-net neutrality tenets:
- Regulating the internet and allowing business to take its course will open up many new profit centers. If access is more highly monetized, then the communication giants who “own the pipes” will also be motivated to invest more in to internet-related technologies.
- New technologies will encourage the development of data and video/graphics driven applications that require wider pipes.
- In a pure market-driven economy, there may be more options for both consumers and businesses. People can choose how much speed and access is worth to them, similar to the cable company model, which provides various programming levels (like basic cable vs. premium), as well as standard vs. high-speed connection.
The Other Side: Caught in the Net
Having heard the FCC side, it’s now time to look at some of the real reservations I have about the demise of net neutrality, including the following issues:
- Access to internet content is provided by a handful of communication giants, like Verizon, Comcast and AT&T. Giving them power over internet access i.e., the pipes, may be even more impactful than the Fed setting interest rates. The FCC is telling us that we should trust that what they do is good for businesses and consumers.
- The aforementioned giants are in much stronger position to decide what content will be served through their pipes and the speed in which the content is served. So in the case of Netflix, for example, which streams movies and TV shows, the pipe providers can charge content owners or creators more money. Most likely, Netflix would then pass this new overhead on to the consumer. This concept would apply to many other business-based content providers.
- For PPC –– it could usher in a new era for digital media.
There is a seismic shift coming with virtual and augmented reality content. This is one of the more anticipated developments for our industry because of the immersive experiences for consumers. Platform providers, mobile device manufacturers, content creators, agencies and brands are at the early stages of experimenting with it. Eventually AR and VR will be rolled out and it will require very fast internet speeds to be successful. While this new era of digital content is exciting, the end of net neutrality gives the ISPs the ability to carve up service into fast and slow lanes, charging more for higher speeds. If content makers or distributor don’t want to pay (or small businesses can’t afford to pay), ISPs could make them so slow that they’re content is unwatchable or even block access to competitors’ sites.
- In case you haven’t checked, the pipes own content, too! Comcast owns NBC. Verizon acquired Yahoo! and AOL. AT&T acquired Time Warner. So whose content and whose digital advertising media will they push? Whose will they block, throttle, or overcharge? If I were Google and Facebook I’d be more than concerned. On one hand, it could be a positive development that Google and Facebook will have competition. On the other hand (or slight of hand), the ISPs have every reason to push their own content offerings while charging or suppressing competitor content. Hey, competition is great – on a level playing field. The FCC says self-interest won’t drive the pie owners. Do you believe it?
- Many small-to-medium-sized companies are already taking advantage of the relatively low cost of entry of digital advertising. But what about start-ups? They may be discouraged by the threat of higher costs. And these companies, which may be incubators of innovation, may never get off the ground without deep pockets. Advertising agencies like Simply180 will need to be even more creative and clever to help small businesses compete with deep-pocketed brands who are able to pay ISPs.
More Questions than Answers.
As I said earlier, the end game is still in question. But the questions remain, including the following that businesses of various stages of development must consider:
- What will the potential financial impact be on small business?
- Will there be democratized organic search via Google and Bing?
- Will we have to pay the pipes for a direct search of our company website to appear, or worse, have to pay the pipes and Googles of the world?
- Will those companies that can afford to pay one or both have an unfair advantage?
- Will internet “pay to play” discourage start-ups that face an uphill battle from the get-go?
- Will free sites now need to include advertising or charge membership fees to offset the cost of paying the pipes for their sites to be recognized?
As both a marketing and media professional, and a consumer, I have serious concerns how the consolidation of power benefits anyone but those that have it. While I believe in a free enterprise system, there are plenty of cases where deregulation can hamstring small business owners and strap consumers. Prior to the mortgage meltdown of 2007, only a handful of banks controlled the U.S. financial system. When a small group of big businesses go unchecked, it’s usually consumers and small businesses that get hurt.
The pipe owners argue that the FCC’s recent decision will introduce a new era of innovation and competition. I believe that to be true but at what cost and who can afford to pay it?