In twenty years or so, the Internet has moved from office computer work tool and entertainment center to utter ubiquity. Mobile apps and network connections are everywhere. Your networked refrigerator can text your smart phone and remind you that you are out of ice cream. It won’t be long before your cat can send you a popup empty bowl gif rather than rubbing your leg and meowing obnoxiously. Important news about community events come in through texts and posting.
So when something about as important as the blood stream is changed in a fundamental way, people should pay attention. This is an economics, finance and investment blog, so a thorough discussion of the issue is beyond our scope. But if you do not want to see the Internet turn in to cable television with tier pricing, limited options and lack of the information that YOU want to use, keep reading.
MOVING TO PAY TO PLAY. AND WE KNOW WHO WILL HAVE TO PAY
In 2015 the Federal Communications Commission (FCC) defined the Internet as a “common carrier.” This treated the Internet as a “common carrier,” and effectively requires that Internet Service Providers (ISP) treat all content them same. They cannot block content nor charge more for certain content.
So under a Net Neutrality model, content providers compete based upon the content they provide, rather than paying bounties to ISPs for faster service delivery.
So a new video streaming service will have the same opportunity for failure or success as a service owned by an ISP. By way of example, in 2005 YouTube was startup company in competition with Google Video. Under Net Neutrality principles, Google Video was not permitted to pay ISPs for faster downloads and less latency. This allowed YouTube to succeed in the market based upon consumer desires.
THE DECEMBER DECISION
The 2015 rule defining the Internet as a common carrier provided Net Neutrality. But in December of last year, the FCC voted, by a 3-2, party line vote, to end Net Neutrality. They did this by changing the legal definition of the Internet from a common carrier to that of an “Information Service” and weakening content protection. The chairman of the FCC, a Trump appointee, was formerly counsel for Verizon, led the effort to repeal Net Neutrality.
Several states Attorney Generals have sued the FCC to overturn the rules.
THE LONG GAME
Very little will change in the near term. But unless Net Neutrality is reinstated, the Internet may soon resemble Cable TV. 400 Channels and nothing worth watching.
YOUR HIGHTLIGHTS FROM THE DESERT OF THE REAL!