At MOVE we don’t work exclusively in the digital sphere but the majority of our work is done there. So we are always interested in what’s happening there. The issue of net neutrality may seem like a U.S based issue but there are issues associated with it that would have really affected people on these shores
Last week in a courtroom in Washington D.C., the Federal Communications Commission were deciding on the future of the internet as we know it. They were voting on the issue of ‘Net Neutrality’.
Net Neutrality is one of the core tenets of the information age. It essentially means that Internet service providers (ISPs) should provide us with an open information highway – all data should be treated equally, regardless of who made it.
This info-graphic is a strong example of what the internet would look like without net neutrality
An open information super-highway
There should be no discrimination against any particular type of content or website. You wouldn’t expect your phone company to choose who you can and can’t call, so why should your internet provider be allowed to veto certain websites and content?
One of the greatest aspects of the advent of broadband is the opportunity that it gives for start-up companies to grow. It is supposedly one of the true level playing fields in the world today. Facebook was a start-up, as was Amazon, even Google started out of Susan Wojcicki’s garage.
We really love working with innovative clients, it would be a shame if creativity was priced out of the internet.
The biggest fear was that ISP’s would start to implement ‘fast lanes’, where companies would be able to bid for their website to have faster loading speeds than their competitors. This would ruin competition and effectively end the concept of an open internet. What would happen to well built, independent websites? It could just be an internet where only the largest fish survive.
Comcast V Netflix
One recent example of this was Comcast V Netflix (we like Netflix). Comcast is the largest internet provider in the United States – they also own NBC, E!, Time Warner and Universal Pictures. As well as this they also provide various video streaming platforms. This puts them in direct competition with Netflix – a video streaming service with 33 million subscribers.
In December 2013, Comcast customers started complaining to Netflix that they were experiencing incredibly slow streaming speeds and that they were unable to stream anything in HD. Complaints to Netflix about slow loading speeds quadrupled from December to January 2014.
This started a chain reaction of events that would lead to one of the biggest decisions in recent years
Slower loading times
Netflix investigated further and found that Comcast was unfairly penalising their customers who had a Netflix subscription by slowing the loading speed of the website. Customers wouldn’t realise that this was the case straight away which meant that Netflix would lose subscribers.
This is a nightmare situation for most digital agencies/firms – your company becomes penalised just for being in competition with someone else.
According to Netflix themselves, “For many subscribers, the bit rate was so poor that Netflix’s streaming video service became unusable. Some of them cancelled their Netflix subscription on the spot, citing the unacceptable quality of Netflix’s video streams and Netflix’s inability to do anything to change the situation.”
In February, Netflix struck a deal with Comcast which let them directly connect to the ISP’s network. It was rumoured that Comcast’s price was a cool $200 million. As a result of this, Netflix had to strike similar deals with AT&T, Verizon and Time Warner.
It was effectively a digital shakedown. Not every company is fortunate enough to be in the position where they can drop $200 million just so they can operate at a normal level. What does this mean for small internet based firms?
Barrier towards innovation
This kind of thing is definitely a barrier towards innovation, only the massive firms will be able to afford to compete. Netflix CEO, Reed Hastings elaborated that ‘broadband will never reach its true potential while large ISP’s continue to operate a pay-to-play system’.
Netflix however, managed to pull their own haymaker by reporting Comcast to the FCC. This started the open debate on web neutrality and the importance of the internet. As you would expect this then became a party issue with Democrats and Republicans split down the middle on the issue.
It took nearly a whole year for the FCC to come to a decision, they flip-flopped on the issue multiples times. At one point, they had even ratified legislation that would allow the cable companies to run the show.
Decisions to make
The people making the decision seemed to be lackadaisical in their approach to the issue. Five members didn’t even turn up to vote on the legislation! There was a certain antipathy to the problem, helped in no part by the constant lobbying of the cable companies (Comcast spend the second largest budget on Government influence in the US).
However, after a well organised pro net-neutrality campaign from users of the social media site Reddit started to get politicians and public figures interested. The issue became such a trending topic that even Barack Obama issued a statement on the proposed legislation.
This is another example of the power of social media. It’s amazing how easily people can now mobilise to support one common cause. It’s no wonder that most oppressive regimes first reaction to public uprisings is to shut it down.
Eventually, the FCC backtracked on their initial statement and declared that the internet should be declared a public utility and as a result, eligible for the same pro-competition legislation as water and energy providers.
This was a huge win for anyone who cares about innovation, press freedom, freedom of information or regulations that motivate competition. However, let’s hope that this isn’t just a plaster on the wound because the wolves will definitely come again.