This is a current update on the principle of net neutrality that is worthy of a discussion. So, how or why is an update necessary? The answer is that net neutrality rules may be changing soon, and various organizations are currently lobbying for their positions. Why does net neutrality matter to businesses or consumers? Is there a way or reason for removing net neutrality? What may you need to consider as a business or consumer after the demise of net neutrality?
For those that have not been following the idea of net neutrality, the idea is simple. No one packet of data can be favored or disfavored by a company that provides internet access. Previous rules would forbid this, and allow entities to sue if there was an intentional slowdown of their service. Indeed, this has allegedly occurred in the past as described in a lawsuit between Time Warner Cable (now Spectrum) and the State of New York. Essentially, Spectrum was intentionally slowing down service, and only improving the service after payment was received by it. Under the Open Internet Rules, this process was prohibited.
The idea behind the prohibition is to ensure that website owners, content producers, and online businesses can compete on the same level without unnecessary or unfair intervention – e.g., Amazon’s website runs quicker on a service provider’s network, but not a smaller competitor’s website. By treating the internet more akin to a public utility, it was supposed to preserve equality between organizations.
The Suggested Changes
The FCC’s changes do not “completely” destroy net neutrality, but shifts enforcement to the FTC, with the intent that Internet Service Providers should be allowed to control traffic more on their services. Although, the FTC states that any preferred or detrimental relationship would have to be disclosed, however, this may result in a framework without “teeth,” as an ISP, if it were to disclose, it may be through a terms of service contract accessible via a website.
The preemption language in the report is more important. The FCC, as part of removing the rules to impose net neutrality, is hoping to make the lack of rules “peremptory.” Effectively, this would bar other states from weighing in with their own legislation for Internet Service Providers operating in the region.
However, we will not know for sure until the vote occurs soon. There is talk that Congress may intervene, but that is uncertain and highly dependent on constituent correspondences on the issue. In the case that net neutrality is repealed, however, it can be expected that online businesses may find ways to pass costs of preferential internet treatment, if offered, towards consumers through higher prices or subscription fees. For those entities using cloud or other online services, it may be particularly expensive as prices may increase due to the shift.
At our law firm, we assist clients with legal issues related to business, technology, and e-commerce transactions. Please contact us to set up an initial consultation.