Switzerland is a blissful land of chocolate, really expensive watches, and untraceable bank accounts. And neutrality. Switzerland doesn’t piss off anyone. Kind of like the Internet, right?
Not quite, and certainly, if we’re to believe the panic-stricken headlines, not anymore. Reading the press reports about net neutrality we’re either headed for the bullet train of Internet access or a return to 9600 baud modems and “You’ve Got Mail!”
This article from Fortune deciphers things about as clearly as I’ve seen.
In a nutshell, new FCC Chairman Ajit Pai is set to rescind the 2015 regulations covering carriers that prohibit them from, essentially, establishing favorites on the Web and throttling access speed up or down, accordingly. ISPs would no longer be regulated like wheezing old telecoms, which in line with this current regulation slashing administration, should only spur economic growth.
On the one hand, perhaps this isn’t a big deal. Carriers already throttle access, but at least it’s universal. I pay more for more speed, but I get to access everything on the web at the same speed. That is net neutrality. Carriers also charge for premium content such as Netflix, Hulu, etc., but, again, speed isn’t an issue.
So who will the fall of net neutrality hurt? Porn. The original Internet pioneer. Still very, very popular. But this is a family column…..
Predictably, Google, Facebook, Snapchat, Netflix, etc., are screaming bloody murder. If carriers charge more to those companies to put them on a “fast-lane” pipe it will, obviously, cut into their bottom line. Shareholders will insist the only neutrality they are interested in is revenue neutrality, so any additional costs will have to be passed on to advertisers, consumers, or both. Facebook says it’s free and always will be. Not in Portugal.
Despite EU net neutrality rules, the Portuguese have found a way around the regulations by lumping in social media into the same bucket as premium content channels. Again, the issue isn’t speed.
As a CIO, net neutrality can be a pain. Despite locking down the Internet, you’ve still got whiny users – many above your pay grade – that insist on the company being their ISP. A sluggy Facebook might get those slackers back on the productivity train.
What if you’re CIO of the Washington Post, and reporters need access to Facebook to research stories? What if you’re the CIO of a sizable hospital campus where researchers need access to complex images found at the CDC? Will the CDC get a pass from carriers? In my former life as a legal vertical CIO, the two legal research behemoths, Lexis and Westlaw, were always up on attorneys’ devices.
As CIO, you won’t have much choice about what content your users can access; they will dictate that decision. They will also dictate from which budget the non-net-neutral fees will come: yours. That means less funding for projects, upgrades, innovation…and maybe staff.
Access, of course, isn’t just an internal issue. For most companies, it’s more of an external one. Cyber Monday generated $6.5 billion in a feeding frenzy of online sales. Traditional retail is already on life support, with brick and mortar stores shuttered in ghostly, abandoned strip malls. If retail is to survive, the argument could be made, it will survive online. Whatever ransom is demanded by the highwayman carriers, they’ll gladly pay – at least on Cyber Monday.
In the pay-to-play model, the consumer may see a nominal bump in access price, but the lion’s share will be borne by the content provider or retailer. They will pass costs along to consumers. At least in social media’s case, advertisers may bear the brunt of the end of net neutrality.
However, if carriers decide to charge consumers for premium access fast lanes, the economic model changes. What will be the pain point for consumers? What is the magic monthly fee number?
I’m lucky in my little part of North Carolina. I live in the county seat and have good Internet access. Drive 10 miles outside of my city, population 35,000, and you’re in farm country. Two-bar country. Ratchet back already slow Internet speeds, and people with limited ability to pay a premium access fee will simply stop using services.
So will small businesses. My brother-in-law has a jewelry store. His web site enables him to be a citizen of the world. Charge him a premium access fee, and he has to look at online sales vs. the monthly fee.