This month, the Federal Communications Commission (FCC) reversed the 2015 ‘Obama-era’ US net neutrality ruling.
Under this ruling, broadband companies had to treat all data on the internet in the same way, and not discriminate or charge differently by user, content, website, platform, application or method of communication. Within this, they were specifically prohibited from the following practices:
- Blocking:ISPs could not discriminate against any lawful content by blocking websites or apps.
- Throttling:ISPs could not slow the transmission of data based on the nature of any legal the content.
- Paid prioritisation: Service providers could not create an internet fast lane for companies such as Netflix
or premium-paying consumers, and a slow lane for everyone else.
Net neutrality not only prevented internet service providers from using the practices above to benefit their businesses, it also prevented consumers being charged on a ‘bundles’ model for their internet access.
As part of the new policy set, the FCC chair Ajit Pai has enabled the telecoms companies to abide by voluntary principles, which will be enforced in a limited capacity by the FTC (Federal Trade Commission).
Since the announcement last week, there have been a lot of articles – in The New York Times, The Financial Times, The Guardian, Ad Age and The Drum to name but a few – on the topic of net neutrality, all giving their views on what this may or may not mean for the US, and the consequences for the wider world. As yet, the implications are uncertain and most of the commentary is speculation. Below is our digest of these opinions pieces, about the effects it will have:
The Consumer: The assumption is that ISPs may push for a bundling system, with differing premiums for subscriptions based on users’ data requirements. This would mirror the ‘pay-to-play’ model used by companies for mobile data. This could create a premium and economy class internet system – which, in our opinion, would be a terrible move.
The Internet Service Providers: Some argue that net neutrality would enable ISPs to properly monetise their investment in broadband. This seems fair, especially when you consider the size of these companies in comparison to Google or Facebook, for example. The removal of the regulation however, means that the ISPs can charge, and do whatever they want, as long as they are transparent in doing so. In this scenario, it is the consumer or content providers who will pay the price.
The Content Providers: Under the new net neutrality policy, content providers are at the mercy of the ISPs. While the internet giants can afford higher premiums to be in internet ‘fast lanes’; smaller content companies would lose out, further disrupting the publisher ecosystem.
The Advertisers: There are two trains of thought for advertisers. The first is exciting, with suggestions of new advertising opportunities being created, new ad units developed, and new approaches to consumer experiences: which may include “unlimited“ or “free” bandwidth offers. The second, however, suggests that the costs of reaching customers online may increase, with data becoming more valuable. It’s hard to say at this stage how this will pan out.
The new policy set by the FCC chair Ajit Pai is due to come into effect in about six weeks’ time. Eric Schneiderman, the Attorney General from NYC, along with a number of US states have promised they will challenge the FCC in court. We’ll be monitoring developments over the coming months and assessing what, if any, the impact could be on UK consumers and the world of advertising.