First publishedin ITS International
Under the new FCC rules, your ISP could charge companies offering cloud services - such as IBM - a premium to offer their cloud services to you
A key US vote may have changed what internet service providers are allowed to charge and how they restrict content: Joe Dysart explains why this has consequences for ITS companies.
While most people were rushing around last December, grabbing last-minute gifts for the holidays, the US Federal Communications Commission (FCC) voted to drive a stake into the heart of the free and open internet. In a majority vote, the agency killed ‘net neutrality’ - a policy that has prevented your regional internet service provider (ISP) from becoming the gatekeeper between you and all the internet has to offer. In essence, the new FCC rules, scheduled for official publication in the Federal Register in early 2018, enable your ISP - such as Verizon, Comcast or Cablevision - to start charging you extra to use Facebook, extra to ensure your ITS business’ website downloads quickly and extra for all sorts of other information and services you now get for free. The issue is so hot-button, numerous ITS industry companies were reluctant to comment on the record about the move.
Not surprisingly, the vote has also triggered turmoil in the US Capitol. “Once again, the Trump administration has sided with ‘big money’ and against the interests of the American people,” says US senator Bernie Sanders. “The FCC’s vote to end net neutrality is an egregious attack on our democracy. With this decision, the internet and its free exchange of information as we have come to know it will cease to exist. The end of net neutrality protections means that the internet will be for sale to the highest bidder, instead of everyone having the same access regardless of whether they are rich or poor, a big corporation or small business, a multimedia conglomerate or a small online publication.” FCC chairman Ajit Pai fiercely disagrees, countering that the death of net neutrality will instead usher in a wave of new internet infrastructure development, along with the emergence of more ISPs, which will rise to compete aggressively for customer dollars in numerous regional markets - a win-win for consumers. “Broadband providers will have stronger incentives to build networks, especially in unserved areas, and to upgrade networks to gigabit speeds and 5G,” Pai wrote in his public statement on the agency’s new stance. “This means there will be more competition among broadband providers.” Paul Ryan, speaker of the House of Representatives, agrees: “The Trump administration’s action to roll back this egregious government overreach into the most innovative space will benefit all users of the internet.” Noble words, for sure. But many following the FCC’s ruling most closely - including major content providers like Facebook and Google - fully believe your ITS business could take a major hit on how it gets to advertise on their internet and how it gets to use internet services, thanks to the FCC vote.
With this decision, the internet and its free exchange of information as we have come to know it will cease to exist,” says US senator Bernie Sanders
Why the ruling matters
If the new rules are adopted, the situation will be as follows: your ISP - be it Verizon, Comcast, Cablevision or a similar monolithic company - will be the bouncer at your doorway to the internet. Your ISP will now completely control what content you will see, what content you won’t see - and how much it charges you for that privilege. It will also have the right to charge you extra to use Facebook, Twitter, LinkedIn and any other social media site: you’ll most likely be paying more to use social media, sooner or later. Plus, social media as an advertising medium could become less attractive to you, given that the major draw of social media is that accessing it has been free. YYour ISP will now have the right to charge you extra for YouTube. For years, YouTube has been an unprecedented boon for businesses, allowing them to post marketing videos there for free, and allowing those videos to be downloaded to their potential customers for free.
With the FCC’s ruling, ISPs can completely trash this incredible deal for businesses, force YouTube to pay a surcharge to them - and force YouTube to start thinking about charging you a fee to post your marketing videos there, too. The same holds true for your favourite business services: under the new rules, ISPs have the right to charge cloud service providers access to their customers - customers like you. Your ISP now also has the right to make your favourite content disappear: ISPs that are also in the content creation business (and there are a lot of those) have the ability to simply make competitive content disappear. For example, an ISP looking to market a service where businesses can post marketing videos can simply choose not to offer YouTube on its services - or make it prohibitively expensive for YouTube to do business on its service. Your ISP can now offer your deep-pocketed competitor much faster, much more reliable content transmission to your customers. If you start noticing that your website seems to be downloading more slowly than your competitor’s, and that the marketing videos on your site seem to falter while your competitor’s play flawlessly, thank the FCC. With the new rules, your ISP can offer faster, more reliable transmissions to competitors who pay for such premium service - and leave your company to slowly limp along, deliberately engineered to be an also-ran.
With net neutrality as the prime directive, anyone with an incredible idea and no funding could still go toe-to-toe with a corporate goliath with armies of creatives, lawyers and banks. The reason? Everyone had free and equal access to potential customers. No more. Under the new FCC rules, there’s a good chance that the story of a kid who started a website in his dorm room and later went on to become the CEO of one of the most influential corporations in human history - for example, Facebook - will become a rarity, if not just a seemingly fanciful tale from days of yore. Anyone with an incredible internet idea will now have to pay their ISP significant money to see if their idea will fly on a statewide, national or international level. That pretty much leaves kids in dorm rooms - who have great ideas but no cash - dead in the water. We’ve all grown accustomed to paying our ISP one price each month for all the broadband service we care to consume. With the
FCC ruling, ISPs now have the right to limit the number of hours you spend on the internet each month, and charge you a premium for additional usage. Moreover, as the gatekeeper of all internet content, your ISP also has the right to study which content and information services you use most - then hit you hard with surcharges if you want to continue to access those services.
You’re now completely at the mercy of your ISP, given that ISPs are generally a monopoly or duopoly in any given region: while the FCC’s Pai has argued that a newly-competitive marketplace with the new rules will safeguard consumers from ISPs that become unreasonable about their pricing or policies, reality suggests otherwise. More often than not, consumers looking for reliable, high-speed broadband services generally have only one or two companies from which too choose. And while satellite is often a third choice, satellite suffers from latency issues. A number of consumer watchdog groups, state attorney generals and Democrats in Congress have vowed to vigorously fight the new FCC rules – and as ITS International went to press it was still possible that the vote could be overturned. But the hard fact is Congress and the presidency is currently controlled by the Republican party. And overwhelmingly, Republican party leaders think the new FCC rules are just ducky.