On December 14, the Federal Communications Commission will likely deliver a huge Christmas present to the nation’s large internet service providers by repealing the Obama-era network neutrality rule. For the rest of us, it’s a lump of coal in our stocking.
The reason this will be welcomed by the likes of Comcast, AT&T, Verizon and other large ISPs is because it will free them to make side deals with content providers, giving them preferential treatment in exchange for money or other considerations. And, in many situations, they won’t even have to negotiate with a partner. Several of the ISPs have merged into media companies themselves. Comcast owns NBCUniversal, Verizon owns Yahoo, AOL, HuffPost and numerous other media outlets. AT&T is attempting to purchase Time Warner, whose media empire includes HBO, Turner Sports, CNN, Warner Brothers and other brands. With network neutrality off the law books, it will be possible for these conglomerates to favor their content over the content of their competitors.
Click above to listen to Larry’s 1-minute CBS News Radio segment on network neutrality, including a comment from FCC Commissioner Mignon Clyburn
The term “digital toll-road” has been used to describe a world without net neutrality, but I’d like to refine that analogy. not so much like a toll-road for passenger cars (we already pay for internet service and some already pay higher fees for faster service) but it’s like a toll-road for delivery trucks. Imagine if Walmart paid the state for the right for its trucks to drive 70 miles per hour while Costco’s trucks were only allowed to drive 45 MPH. Walmart would get its merchandise faster, which would give it a competitive advantage. As it is, wealthy companies have all sorts of advantages when it comes to the ability to pay for high-speed servers and internet infrastructure but eliminating network neutrality gives them a further advantage when it comes to delivering content directly into our homes. As consumers of broadband, we already pay ISPs for service (including paying a premium for faster service) but if the FCC proposal goes through, there could be an extra fee for our information providers that they may pass on to us, resulting in higher bills for our information and entertainment services.
The most chilling possibility is the ISPs using their power to block or slow-down content based on business or even political criteria. I don’t want any company controlling what I can read, what I can watch or where I can express my opinion.
While none of the ISPs have said that they would use this soon-to-be-granted power to stifle competition or block content, it is certainly possible for an ISP to throttle down or even ban content from a rival company or a site they don’t agree with. More likely, what they’ll do is provide faster or better service to their subsidiaries, business partners and companies willing to pay for preferential treatment. Even with the network neutrality rules in place, a loophole called “zero rating,” allows some bundling such as AT&T exempting its own DirecTV Now streaming service from any mobile data plans
You might point to this and other freebies as a benefit to consumers and, in the short-term that might be true, at least for some. But there are some serious long-term issues. That’s one of the reasons that Congresswoman Anna Eshoo, who represents part of Silicon Valley, is opposed to this proposed FCC rollback. “The rules today protect consumers and small businesses from the worst possible harms ISPs can inflict online,” she wrote on her website. “Repealing these protections is an assault on what has made the internet what it is … an open and dynamic platform, with consequences for consumers and our economy.” Earlier this year, Eshoo met with several entrepreneurs to discuss net neutrality and how its repeal could hurt their ability to compete.
Imagine if you decided to create your own video streaming service to compete with Netflix, Hulu and Amazon Prime. After spending money on the usual start-up costs, including content deals, servers and high-speed internet connections, you could then be faced with additional fees — perhaps in the tens of millions — to internet service providers to deliver your content to their customers. The big players can afford those fees, but you might not be able to compete. Even if your video-streaming service does make it to people’s homes, it might be a lot slower than your well-financed competitors, which puts you at an immediate disadvantage. That not only hurts the entrepreneurs but the rest of us, who may never be able to take advantage of the better services or lower prices that competition brings.
The advocacy group Fight for the Future has a web page where consumers can reach out to Congress in an effort to get them to stop the FCC from overturning network neutrality.