Net Neutrality

Today The White House released a statement on Net Neutrality explaining what President Obama’s view on the issue is and what he believes should be done.  While Obama has no direct influence on the matter (that belongs to the FCC) his words carry a great amount of weight and will certainly be heeded by the FCC Chairman Thomas Wheeler.        

In his statement Obama explained that the internet is becoming an ever important resource to Americans and should be widely available to everyone in this country. He then continued to compare the internet to other resources like water or electricity which are regulated by the government as public utilities. His plan is to reclassify Internet Service Providers (ISPs) under Title II of the telecommunications act which would put ISPs like Comcast or Verizon on the same field as landline telephone providers.

The whole reason for this is to prevent a company like Comcast from abusing its power. With no regulation nothing is stopping Comcast from crippling a service like Netflix for all of its customers in order to get them to drop it and move to Hulu if Hulu paid them to do that. Now nothing like that is currently happening, but it doesn’t mean we shouldn’t be worried about it. Normally that would just be the free market at work and Netflix would have to adapt their strategy or customers could simply choose a different ISP in order to access the service, but in many regions of the country there is one, maybe two or three ISPs to choose from. The capital needed to lay fiber in a city is astronomical, so companies that offered to lay down the cost in order to have exclusive rights to a certain market now have the luxury of being in a government sponsored monopoly (much like utilities)

While it would be nice if things just kept chugging along like they currently are without government regulation, it doesn’t look like it is going to happen that way. We already hear of companies wanting to create so called “fast lanes” that would allow services to pay for increased bandwidth or speeds. Another example is T-mobile. On T-mobiles network certain music streaming services like Pandora and Spotify do not count towards your monthly data cap. While this seems like it might be a win for consumers and companies alike, what happens when a small start up that has a killer service doesn’t get that agreement with T-mobile? Consumers will be less apt to use that smaller service because it just isn't in their best interest. 

--Scott Evans