How the New Network Neutrality Ruling Will Change the Market
These innovations depend on high speed, reliable, and unimpeded internet connectivity.
Ever since the internet shifted from a government and educational experiment to a world-wide mesh of information accessible to everyone, the American government has struggled to understand how to best regulate it. Their goal has always been to try to enforce equal access to the most powerful innovation mankind has created; open access to the world’s knowledge. Though the actual rulings and regulations have been complex and difficult to understand. And with our legal system built upon precedent rulings and laws has created its own confusion.
We have actions based upon 100-year-old laws intended to prevent railroad monopolies from impeding interstate commerce, or 50-year-old decisions opening choice in long distance telephone service. It is not surprising that our media is filled with articles, stories, blogs, open letters and opinions asking for common sense rules. Consumers and businesses alike not only want reasonable rules but rules that are clear and understandable for everyone.
On December 14th of this year the FCC, led by Ajit Pai, voted to remove and replace the Open Internet Order of 2015. This action proposed to remove regulatory controls over Internet Service Providers and placed the authority to enforce anti-competitive practices back in the hands of the Federal Trade Commission. To many, this was a step backwards, and the rhetoric in the media declared that this allows ISPs to manipulate its customer’s traffic for its own financial benefit. Will the new rules have that effect?
What will the FCCs repeal of the Open Internet Order actually do to the Internet?
Changing the rules can certainly have a massive impact. Over the last year, we have seen heated discussion about how we should regulate the internet. The divisive political climate in America over the last two years has spread this discussion virally through social and traditional media. Consumers are concerned about Fast Lanes, and Slow Lanes, and new rates plans, and package offers increasing their already expensive ISP costs. Businesses are worried about having to compete with the ISPs own products that get priority treatment forcing the business to pay more to level the playing field, or worse, be blocked completely by the ISP. Media companies are concerned about throttling or other interference that will degrade their customer’s experience. New startups are worried that their business may never reach their customers who are locked into ISP packaged services.
On February 22nd of this year, Ajit Pai and the FCC produced the full text of the new ruling, Restoring Internet Freedom, a 70-page document describing the repeal and replace decision in full detail.
The Restoring Internet Freedom ruling goes into effect on April 23, 2018.
This ruling, like many before it, seeks to regulate or deregulate the large actors that provide our internet service. This includes our Telephone companies providing DSL, Television companies providing Cable internet, Companies providing fiber to the curb or to the home, Municipal and Commercial Wi-Fi providers, Existing and next-generation Satellite Internet providers, and of course, our cellular providers and their 3G, 4G, and soon 5G networks. Consumers and businesses depend on these connections, and there is growing concern that removing regulations of these services will have drastic negative impacts. Many of the arguments against it are speculative and some are unlikely outcomes, however, there is one problem that these rulings have a difficult time addressing.
The Last-Mile Problem
What is the Last-Mile Problem? In every case of infringement on consumer or business desire for an open internet, it comes down to the last mile of the internet itself. The Last-Mile is that last connection, from the ISP to the Consumer. All too often the consumer doesn’t have a choice of ISP for this last-mile connection. In many cases these ISP last-mile providers have monopolies over large regions of consumers, these customers are trapped, unable to change providers when they have problems with their service. In rural areas there often isn’t a high-speed option at all, the choices are dial-up or satellite internet, both of which are unable to support many of today’s modern connected services. This gives these monopolies, that are often contractually permitted to be a monopoly by the local legislative jurisdiction, the ability to operate without the consumer in mind. Rates can increase with ease, unwanted services and bundles can be forced upon the consumer.
Solving the last-mile problem takes time, money for infrastructure spending, and pressure on local legislators to open the regional agreements to competitive businesses. Currently, this new FCC ruling doesn’t address the last-mile problem directly, it does empower the FTC to act on the consumer’s behalf.
Soon there are new ISP solutions which will be arriving within just a few years. SpaceX and OneWeb are bringing a new generation of low earth orbit constellations of thousands of satellites providing real high-speed internet that is performance and cost competitive to today’s terrestrial broadband. These services will provide customer choice everywhere there is a monopoly today. Soon the last mile problem will be solved, not by a rule or regulation, but by innovative new solutions that solve a customer need.
The report ‘Understanding Net Neutrality and the Impact of the Recent FCC Ruling’ addresses the details of Network Neutrality, the history of internet regulation, the specific impacts of past and current rulings, get detailed knowledge of how this recent ruling will change the internet now, and in the coming years.
