• September 1, 2014
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Neutering Net Neutrality

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If you've been paying attention to business and technology news for the past several years, you may have heard about something called net (or network) neutrality. It's a topic mentioned in passing, but rarely works up much steam. I have sometimes dismissed it privately, figuring that, like most situations involving a government body, nothing would shake the status quo. I was wrong. Now, net neutrality, the FCC policy that made the Internet a level playing field for start-ups to compete against established businesses, is in danger of being overturned.

Here's how it works. Under the FCC Broadband Policy Statement of 2005, bandwidth providers are considered a "common carrier," and required to treat all data equally. They can't discriminate on the basis of who is using the pipe, what they're moving through it, what format it's in, or what equipment they're using. No filtering of content, no artificial slowing down of service, no requiring specific software or hardware. The rules were clarified in 2010 to be closer to the ones followed by phone carriers, if that helps to clarify the situation for you—it certainly helps me.

This started to change this year, when Verizon successfully sued the FCC to establish that providers were not common carriers, so the FCC had no authority to enforce net neutrality. This was followed immediately by AT&T patenting ways to get around what weakened authority the FCC still had. In essence, Big Broadband said "You're not the boss of me" and stole the FCC's soccer ball to prove it.

Now, the FCC (chaired by a former broadband-provider lobbyist) plans to draft new rules allowing providers to build special, faster service lanes for companies willing and able to pay for them. Services such as Netflix, Amazon, or Facebook can pay a premium to ensure they have the fastest connections. Established brands can create a huge barrier to entry for competitors. Since 96 percent of the U.S. population has access to two or fewer bandwidth providers, that means new businesses in most regions won't be able to shop around for a better deal for the best speeds.

So it looks like bandwidth providers, the government, and Web companies are having a Three Stooges slap-fight, and bandwidth gets to be Moe. Seems pretty remote from Joe and Linda Consumer, right? Wrong.

There is already evidence (not proven, but mounting) that Verizon and Comcast have deliberately slowed service to companies like Amazon and Netflix to force their hands in negotiations. We all know this basic fact of commerce: When the price of doing business goes up, customers eat the cost. The U.S. already pays among the highest prices worldwide for Internet access, but has comparatively mediocre service—we rank outside the top 20 (sometimes the top 30) in all the key measures of broadband quality. What happens when a set of near-monopolies forces the largest and most popular Web services to pay more? There will be less incentive for these businesses to provide good service, because the tier system keeps them safe from disruption.

Many Web companies have come out against these changes. The biggest supporters of ending net neutrality are bandwidth carriers: Comcast, Verizon, Time Warner, AT&T, and Cox Communications. Who's opposing them? Some very popular brands, including Amazon, eBay, Facebook, Google, Microsoft, Netflix, Twitter, and Yahoo. Yes, it's self-interest, but it's enlightened self-interest—they know the damage they will suffer if they have to aggravate their customer base.

Fortunately, there is still time to act. The 120-day comment period for chiming in on these changes ends in mid-September—this month. If you feel you have a stake in the matter, go to www.fcc.gov/comments and make your voice heard. Write your congressperson, your carrier, your favorite Web service provider. Spread the word and save the Internet.

Special thanks to comedian John Oliver, whose brilliant rant on Last Week Tonight shook the American public out of a complacent funk. As he said, "If you want to do something evil, put it inside something boring." Sad to say, he's right. I hope the response isn't too little, too late.

Marshall Lager is the managing principal of Third Idea Consulting, dedicated to finding the best way to move businesses and customers forward. Engage him at www.3rd-idea.com, or www.twitter.com/Lager.

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