Net Neutrality – FCC on Ctrl+Z Mode

The Federal Communications Commission recently announced they will vote on December 14, 2017, to suspend the landmark Obama-era regulation that ensures equal access to the Internet for American people.

The new proposal would allow telecom titans like AT&T ($T), Verizon ($VZ) and Comcast ($CCZ) to block, or at least slow, web traffic. Internet service providers (ISPs) would no longer be required to treat all web traffic equally, and users would be required to pay more to access their favorite services without being blocked or slowed down.

What the Critics Say

A search in AlphaSense reveals this announcement attracted a firestorm of criticism from Internet companies like Netflix ($NFLX), Alphabet ($GOOG), Facebook ($FB) and activists, including congressional Democrats. I found these examples:

quickly research net neutrality on AlphaSense

  • The Washington Post: “The FCC’s net neutrality rules are working well for consumers, and we’re disappointed in the proposal released today,” Google said in a statement.[1]
  • Dow Jones News article: “But critics — including internet companies, consumer groups and congressional Democrats — said the changes would hurt online firms, especially startups, by raising costs and potentially other barriers.”[2]
  • CNN Money: “Critics say the repeal threatens to fracture the internet into fast lanes and slow lanes, and let internet providers offer preferential treatment to companies that are willing to pay more.”[3]
  • AdWeek: “While many platforms and internet rights advocates agree that ending net neutrality could hurt consumers, marketers say brands have a lot to worry about as well. According to Joshua Lowcock, U.S. evp and chief digital and innovation officer at UM, brands should be concerned.”[4]

What the Proponents Say

FCC Chairman, Ajit Pai, said that federal government will stop micromanaging the Internet and advocated that ending net neutrality would foster innovation and investments among ISPs (Pai has apparently spent more than 2 years with Verizon as an Associate General Counsel).[5][6][7]

The Independent published a story that said, “Major ISPs including AT&T Inc, Comcast Corp and Verizon Communications Inc, have been urging the FCC to revoke the rules, argue that repealing them could lead to billions of dollars in additional broadband investment and eliminate the possibility that a future presidential administration could regulate internet pricing.”[8]

Pai’s aides also argue that repealing the net neutrality regulations and broadband classification under Communications Act Title II service would also help ISPs lower their prices for consumers. ISPs would be able to offset their costs via prioritized services, charging the customers only for the services which they require.

Life without Net Neutrality

What would life without net neutrality be like? The content you want would be offered to you in packages, which may mean you’ll end up paying more for services you currently use, but will have more of that content available to you. For example, there might be a “social package” that would include Facebook, Twitter, Instagram and more.

Such markets already exist in today’s Artificial Intelligence (AI) and Internet of Things (IoT) enabled world. Check out these plans from the Portuguese market:

internet packages will soon be the norm if net neutrality laws are reversed
vodafone subscription rates show what may be to come if net neutrality laws are reversed

This could soon be reality if the FCC successfully presses Ctrl+Z on net neutrality. In the meantime, I have set up email alerts on my saved AlphaSense searches so I will be updated with the newest information as it becomes available.

1. The Washington Post, “FCC moves to end net neutrality standard,” November 22, 2017
2. Dow Jones News, “DJ: FCC Plan to Roll Back Net Neutrality Rules Sets Up Win for Cable, Wireless Firms,” November 23, 2017
3. CNN Money, “Trump’s FCC moves quickly to upend internet, media rules,” November 22, 2017
4. Adweek, “Marketers Fear the FCC’s Plan to Kill Net Neutrality Could Increase Advertising Prices,” November 22, 2017
5. NYTimes, “DealBook Briefing: Trump Is Still Not a Fan of AT&T-Time Warner,” November 22, 2017
6. Dow Jones News, “Netflix ‘publicly And Loudly’ Opposes The FCC’s Net Neutrality Rule Reversal,” November 22, 2017
7. Wikipedia, “Ajit Pai”
8. The Independent, “Net neutrality repeal: What is it, and why will it change the internet for the worse?; ISPs are set to gain a huge amount of control over what you can and cannot access online,” November 21, 2017