Why Net Neutrality Matters for Businesses
Over the past two decades, the internet has changed the way consumers communicate, access information, and participate in the economy. Just as consumer behavior is evolving, technology is also creating new opportunities and challenges by changing the way businesses engage with customers.
As a result, traditional businesses and their trade associations have an important role to play in technology policy – and a strong, politically potent voice given the presence of retailers, grocers, realtors, banks, restaurants, and other types of businesses in nearly every city, county, and town in the U.S.
What is Net Neutrality?
- Net neutrality is the principle that consumers who use the internet should be able to access the content and applications they want, without their internet service provider (ISP) (e.g., Comcast, AT&T, Verizon, etc.) blocking, slowing down, or redirecting internet traffic, or extracting rents by prioritizing some sites or applications over others.
- For businesses that use the internet to reach, interact, and transact with customers, the presence of strong net neutrality rules ensures that businesses don’t have worry about a customer’s ISP blocking or slowing the customer access to the businesses’ site, favoring competing businesses (or the ISPs own affiliates), or requiring businesses pay ransom to avoid degradation or slow page loads.
What are the Existing Net Neutrality Rules?
- The Federal Communications Commission (FCC) adopted net neutrality rules in 2015. The rules prohibit ISPs from blocking or slowing legal content, or prioritizing some websites and applications over others.
- The FCC’s rules also include a “general conduct rule,” giving it flexibility to address further threats to consumer choice and business access to consumers online not expressly spelled out in the three bright-line non-discrimination rules.
What is the FCC Proposing to do to Net Neutrality?
- The current FCC is proposing to eliminate the existing net neutrality rules, undermine the agency’s legal authority to enforce any rules that remain on the books, and essentially allow ISPs to voluntarily decide their own policies on whether to adhere to any form of net neutrality, and to change those company policies at any time.
Preserving the Open Internet (or Net Neutrality) is Market Access Issue
- Without strong net neutrality rules, ISPs could charge subscribers for internet access, then turn around and double dip, charging websites and applications that those subscribers use extra fees under threat of blocking or slowing the consumer’s access to the content, or degrading the content so consumers may choose migrate to competitors.
- In markets where an ISP has an affiliated business, the ISP will have a strong incentive to discriminate against competing services and applications, and would stand to financially benefit from degrading competitor traffic, or extracting rents.
- For example, some ISPs now sell home alarm systems. ISPs would have incentives to degrade traffic from competing home alarm system vendors to drive its internet access subscribers to also purchase the ISP’s home alarm product.
- ISPs would also have strong incentives to sell the fastest, priority access (e.g., internet “fast lanes”) and subscriber exemptions to ISP data caps to businesses that can afford to pay the most to give themselves a critical advantage over competitors.
- Businesses that can’t or won’t pay for fast lanes would see their websites load slower for consumers, potentially driving those consumers away.
ISPs Have a Track Record of Degrading Competing Applications, Self-Dealing
- ISPs have the technical capacity to degrade and prioritize traffic, and identify the sender and contents of data traveling on its network.
- There are numerous documented instances of ISPs blocking applications that compete with their own services, and giving affiliated content priority access to consumers via exemptions to data caps. Without net neutrality rules, those practices will likely be monetized on a large scale.
- ISP executives have long claimed they would like to charge businesses for access to ISP subscribers, and Verizon’s attorney told judges on the D.C. Circuit Court of Appeals that Verizon would actively pursue paid prioritization, or fast lane arrangements, if not for the FCC’s net neutrality rules.
What can Businesses and Trade Associations Do to Protect Their Access to Customers?
- The FCC is accepting written comments on its proposal to kill net neutrality until mid-August.
- The FCC typically hears from the same repeat players – telecom, cable, and wireless companies, and consumer and public interest groups. Businesses that rely on the internet to reach customers make up the vast majority of the economy, but are rarely represented in the FCC’s rulemaking proceedings.
- Explain to the FCC (and Congress) how your business benefits from and relies on an open internet where ISPs can’t charge ransom to reach customers, favor themselves, or give priority deals to firms with deepest pockets. Describe the negative economic effects of eliminating net neutrality for your business and industry sector.
To learn more about getting involved or to have questions answered regarding Net Neutrality please contact Ryan Tolley at email@example.com.