The Future of Net Neutrality Regulation

Due to the tumultuous election upset in 2016, the composition of the federal government is set to change dramatically for the next year. This will have far-reaching consequences for a variety of political issues, including net neutrality, which we will focus on in this post.

Imminent changes are coming to Congress and the White House as the Republicans will hold control over both the House and Senate, in addition to holding a record number of state legislatures. So, what does this mean for net neutrality regulation? In recent history, GOP lawmakers have been largely against net neutrality legislation promoted by tech-minded Democrats and the Obama administration. As such, many new and emboldened Republicans are looking to revise or dismantle the 2015 net neutrality standards within the next four years, if not sooner. In short, the new administration could signal a serious shift in legislative action concerning net neutrality and other policies.

This also raises questions about how IT professionals, businesses, and Internet users will be affected by the coming changes. Because this is a very complex issue, we can only theorize what may happen in the coming year. However, with new appointments and executive action unfolding within the new administration’s first 100 days in office, we can provide an idea of what the future of net neutrality will look like, and how it will affect IT professionals and businesses across all industries.

What is Net Neutrality?

For those new to the debate, it is worth brushing up on what net neutrality means. Net neutrality is a basic principle that states that all data on the Internet should be treated the same by Internet service providers and governments. In other words, service providers shouldn’t be able to discriminate by charging different rates for different users, types of content, websites, platforms, applications, and other types of variables.

What exactly would this discrimination look like? Let’s say you have Comcast’s Xfinity internet service, and Comcast has a contract with Google in which Google pays Comcast for faster service to its users. In the interest of benefiting this arrangement, Comcast may choose to slow down or block the service of Google’s competitors. In this extreme case, you would only be able to access Google’s sites if you wanted to use those types of services effectively. There are many other ways to affect Internet traffic for the benefit of interested parties, so you can see that the Internet would become a different place altogether if net neutrality were to go away.

Net neutrality regulation ensures that the Internet is treated like a public utility, much like telephones, railroads, home electricity, and running water. The government body tasked with upholding this regulation is the FCC, which is responsible for regulating interstate communications technologies like radio, television, phone line, satellite, and cable.

The 2015 Legislation

The telecommunications industry has seen several key mergers over the last decade resulting in growing concern about anti-competitive and monopolistic practices that could endanger the regular operations of the Internet and endangering its status as a public utility.

The debate took a decisive turn in 2005 when AT&T contemplated charging certain digital companies more for preferential treatment on their service, right after the FCC eliminated rules that kept cable and phone companies from discriminating against content providers. The FCC maintained a relatively slack view on net neutrality regulation, content with promises from telecom companies that they wouldn’t interfere with normal Internet operations. However, public perception of outsized telecom power was growing, and instances of covert telecom manipulation began to surface such as Comcast’s “throttling” activity.

After temporarily considering the allowance of fast and slow broadband lanes, the FCC finally shifted to a solid net neutrality stance. In 2015, the FCC introduced firm legislation to reclassify broadband Internet as a “common carrier”, which would mean it would be regulated like other public utilities. All data that moved through the Internet was to be treated equally by service providers. This solidified protection of internet access under the principle of net neutrality.

A Changing of Seats

The current FCC stance on net neutrality, and the Internet’s designation as a common carrier, is expected to be reversed with the coming administration changes. One of the most important of those changes has to do with the departure of FCC Chairman Tom Wheeler, who is one of the strongest establishment supporters of the 2015 net neutrality regulation.

As one of the main proponents in Washington for the net neutrality legislation, Wheeler constantly found himself at odds with lawmakers and telecommunications companies such as Verizon and Comcast that voiced opposition to the legislation, citing net neutrality as an impediment to investment and growth.

After January 20, Wheeler left his post to make way for the incoming presidential administration. President Trump is expected to choose Ajit Pai as the next FCC chairman, a serious proponent of deregulation for the telecommunications industry, and a firm opponent of net neutrality regulation. Additionally, Trump’s transition team is full of telecom and cable industry insiders, as reported by Wired. The FCC itself will have a 2-1 Republican majority after the administration changes.

Pai and his Republican lawmaker peers are expected to get to work dismantling the 2015 net neutrality legislation in short order, and President Trump himself has targeted FCC regulations in speeches and tweets. The changing tide of lawmakers represents a dramatic reversal on previous policy choices, which will have profound consequences throughout the economy and our greater society.

2017 at a Glance

So what exactly does the future of net neutrality have in store for us? Based on our previous analysis, the new presidential administration is expected to roll back net neutrality regulation to favor corporate interests.

Of course, this policy reversal isn’t set in stone, and lawmakers still have several hurdles to clear before they gut the legislation entirely. Lawmakers and tech industry professionals who advocate for net neutrality will put up a fight before their legacy is wiped away, but theirs is definitely an uphill battle.

If the new administration and GOP lawmakers are successful, it will result in further deregulation of the telecommunications industry. With net neutrality gone, the telecom and cable industries will have far more decision-making power to shape the Internet in ways beneficial to them and the tech companies sharing their interests. What isn’t so certain however is how exactly this future is going to pan out.

This is because the Internet is a very large and complex entity that is maintained and governed by many different interests. Our society is now heavily dependent on the Internet’s many utilities. Once politicians and service providers start to tinker with how the Internet functions, we will see pronounced effects that will reverberate throughout businesses owners’ and consumers’ lives. It may be that the telecoms and cable companies are able to make lasting improvements to the Internet for the benefit of consumers and businesses, or it may be that the abolition of net neutrality causes economic chaos for companies that make extensive use of the Internet. All of these possibilities will have political consequences that the administration has to respond to.

Net Neutrality and IT Professionals

Given the likely future of net neutrality, how can we expect IT professionals and tech businesses to be affected? First let’s consider the pro net neutrality stance, which views an open and free Internet as a net positive for IT and tech companies. Many tech businesses, activists, and individual Internet users have actively promoted net neutrality regulation for a number of reasons.

Net neutrality ensures that the Internet remains an equal-opportunity public resource, in which anyone can access any content whenever they want. As long as users are paying for a basic Internet service, they can go where they want to. This is key for businesses that sell their products and services over the Internet, such as tech companies, eCommerce sites, and IT services.
This holds true especially for newer and smaller businesses that want to reach as many online customers across as possible. Without net neutrality, it may be possible for Internet service providers to slow down or even block small Internet businesses that aren’t paying a service fee, which counts as just another overhead cost that many small businesses can’t afford to pay compared to behemoths like Amazon and Walmart. On top of the increased overhead, businesses that are stuck outside of premium networks may lose out on customers from those sources, creating an inhospitable and unequal business climate for new entrepreneurs and start-ups.

Don’t take our word for it, IT professionals themselves have plenty to say on the matter. In a survey of 411 U.S.-based IT professionals, a majority expressed serious reservations about the loss of net neutrality regulation. The top stated concerns had to do with slower Internet speeds from “throttling”, blocked access to lawful content, free speech violations, privacy violations, impacts on various business’ revenues, increased Internet costs, degraded Internet access, blocked access to customers, censored content, and more.

Without a free and open Internet, there is more incentive for both Internet service providers and governments to put up more roadblocks to access, whether for political or economic reasons. These roadblocks may affect Internet-based businesses in adverse ways by blocking access to online utilities, customers, online markets, and other resources. Activists warn of Internet “fragmentation” in which the Internet is more likely to resemble cable TV, where industry incumbents remain entrenched, and entry costs are high.

Another Perspective

The Internet service providers and allied tech companies see things a little differently. One of the major arguments against net neutrality is that it dampens investment and innovation for companies that handle infrastructure. Internet service providers want to be able to charge higher rates for faster speeds, which frees up more investment money to build out additional infrastructure and make upgrades to broadband services.

However, the Internet has changed radically over the last two decades, and there are now services like video streaming and peer to peer sharing that take up a much larger amount of bandwidth. These are the services that have been subject to throttling by the Internet service providers in the past. Telecom and cable companies complain that tech companies like Netflix are enjoying a free ride on their broadband infrastructure and that these businesses need to pay their fair share for bandwidth access.

For IT and tech professionals, this could ultimately mean faster Internet services. Internet service providers do need to manage their own broadband systems, and if slowing some services in order to prioritize others is necessary to increase broadband efficiency, IT professionals may benefit from these changes.

At the heart of the matter is a basic conflict between companies that maintain the physical Internet infrastructure, like Verizon and Comcast, and those who offer services on that infrastructure, such as Netflix and Google. In addition to these corporate relationships, net neutrality is also another component of partisan debates over who is responsible for upholding Internet services and who benefits from the existence of a functional online economy.

The gutting of net neutrality regulation could transform the Internet in dramatic ways, some of them unforeseen. IT and tech businesses are especially reliant on the many resources available across the Internet, and if toll booths are put between them and those resources, they may find more obstacles to their business plan and face higher costs. Internet service may improve thanks to rejuvenated telecom and cable companies, but the landscape of the Internet is still likely to change dramatically, creating a new set of winners and losers.

The Bottom Line

The complete gutting of net neutrality regulation is not a done deal by any means, but the new administration is definitely going to work hard at getting it done. There are going to be significant struggles over the future shape of the Internet, which will affect consumers and entrepreneurs in many varied ways in the coming months.

For IT and tech companies, it is important to stay well-informed and communicate businesses interests very clearly. IT and tech businesses should not be afraid to advocate for their own needs, which could include organizing and communicating with elected representatives. The future of net neutrality may appear uncertain, but it is a pretty good bet that big changes are on the horizon.

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