In December 2017, the FCC voted 3-2 to reverse Obama-era legislation that restricted ISPs from delivering internet service to customers at different speeds and presumably price levels. That meant that if nothing changed, ISPs will be free to charge what they want for different speed levels on June 11 (provided they disclose what they are doing). Senate democrats pushed for a vote to keep the regulations in place. On May 16th, 2018 Senate Democrats won a vote to keep the internet speed-neutral.
What happens if it comes back? Should you care?
Even with this recent vote, the issue might not away. Here’s why you should care.
For consumers, the downside is relatively easy to explain. You are going to be charged more for high-bandwidth services like Netflix or YouTube. Nobody wants that. ISPs argue that a different revenue model will enable them to reach parts of the country that currently don‘t have coverage. Reading between the lines, your internet will cost more.
This reminds me of the early days of the internet when you paid for usage with AOL. Dating myself, I remember a month when AOL cost me over $400. Keyword: “Yikes!” We’re all getting back in the time machine and heading back to the 90s.
To understand how this legislation might affect your company, you need to think about how your company uses the internet. On the surface, you might think that the main impact to you and your customers is that maybe your web site might load a little slower. That’s not great, but it’s not the end of the world. Unless you are Netflix, you might be ok with that.
Your company’s use of the internet goes deeper than that though. You use email, right? Chat? Maybe project management software, Quickbooks online? Many companies have their infrastructure in the cloud. That includes potentially servers and systems that are owned as well as myriad 3rd party services. If you have a YouTube video on your website, will your customers be asked to pay for it by their ISP?
All that communication could be subject to choosing which internet lane the end provider has chosen to pay for. If your chat service provider needs to pay more for faster lanes so that chat is still real-time, you’ll get a bill. If your systems back up data to offsite storage every night, you’ll get a bill.
For years, we’ve all gotten used to how the internet works. We have an expectation about speed and performance. My assumption is that how you experience the internet now will be the top cost tier in the future. There isn’t a way to go faster, so ISPs will naturally have to create progressively slower and slower tiers.
Thinking about the cumulative effect, US businesses (outside of telecom) will suffer. Every internet service that businesses use will become more expensive overnight. It will be more and more difficult to do business at the same level as before.
The Net Net of Net Neutrality
The loss of Net Neutrality is an issue that will affect businesses significantly if it comes back. For now, it’s dead. We have an open internet. But ISPs will likely not give up easily. If the doors open up to new revenue streams, they will act on the opportunities.