Net Neutrality and media: Why you should care.

I’m often asked: “What exactly is Net Neutrality?” Boiled down, it’s the philosophy that, however we personally use the Internet, it carries no restrictions or tariffs based on the content we access. Essentially is it the principle that carriers (ISPs) are precluded from restricting or prioritizing access to data based on the content that the data comprises.

Think of it as the postal system. The government is not allowed to open and read your mail to see if one letter is more important than another.  As long as the postage is correct for the weight of the envelope, your letter gets delivered.  Priority Mail would be analogous to upgrading your bandwidth.  Like going from Dial-up to Broadband.  But at no point is the content of the envelope considered in how your mail gets sorted or delivered by your mail carrier.

In the 1960’s the US government passed legislation preventing any discrimination in communications by the telco providers.  It was based on the idea that First Amendment (freedom of speech) rights applied to this industry.  They were forced to treat the physical infrastructure differently than the content that traversed it.  They were specifically precluded from creating a biased financial model that leveraged differences in the content.

That legislation was overturned in 2005 when the FCC buckled to pressure from the special interest groups; primarily led by the telco’s and cable MSOs who were looking to monetize their investment in the infrastructure.  Something that I don’t necessarily disagree with.  They built and support it, and should be allowed to leverage it financially.  However, the chosen model will foster a tiered system that will likely prioritize traffic based on arbitrary, self-serving rules with little or no governance.

Why this is an important issue for our business, and media companies in general, is that the creation of a multi-tiered, biased Internet will ultimately stifle innovation in this channel at a time when innovation is sorely needed. Online media is still at a very early stage in it’s evolution.  The loss of Net Neutrality will add unnecessary friction to the both the creation of new distribution technologies, as well as adoption of newer, smarter consumption platforms by the consumers.  If a consumer is on a metered bandwidth plan, they are going to seriously consider what type of media they access, and how they consume it.  The introduction of that level of consideration, will raise the barrier for many to discover new, emerging forms of content.

That’s bad for the content creators who will have obstacles exploring new ways to communicate with their audiences.

That’s bad for the media industry, which largely supports the content creation through marketing revenue.

That’s bad for the consumer electronics industry that’s just beginning to harness the power of Cloud Media, and OTT (over the top) media services.   This also includes many other non-media types of cloud computing models that rely on ubiquitous, unfettered Internet access to work efficiently.

That’s exceptionally bad for the consumer, who will ultimately be carrying the costs for a complex distribution framework and will have far fewer options to show for it.  Less media.  Fewer apps.  And consumption paralysis due to concerns over metering costs.

I totally understand and support the ISPs position regarding their rights to monetize their investments.  After all, this country was founded on a free-market economy.  And as a business, they should have the right to capitalize on their investments.  But in this case, to quote Star Trek (after all, I am a tech geek) “The needs of the many outweigh the needs of the few.”  It’s the Lab’s assertion that the effect of abandoning the precepts of Net Neutrality will have negative economic impact on a large number of industries.  The ISP industry will grow (ungoverned) while restricting the growth of the industries that support it.  That seems short-sighted and extraordinarily unwise…

To the folks who proclaim that a free market economy self-governs by creating a fertile field for competition, I say: My concern with that argument is that in many regions, these ISPs are a monopoly.  Or they are too few to create a truly competitive market.  This opens the doors to what amounts to anti-competitive behavior and price fixing.  This, for any other critical public service, would fall prey to severe governmental scrutiny.

Allow me to illustrate the slippery slope by telling a short story…

So, I was on a plane a few days ago using GoGo Inflight, the wifi service that some airlines are leveraging to provide Internet service to their passengers. GoGo currently prioritizes or restricts traffic based on content and protocol.  It’s in their terms of use that you accept when you start it up.  Users of high-bandwidth services will have their access restrained or blocked.  Currently, that’s because of physical limitations of the service.  There’s not a huge amount of bandwidth for the entire plane to share, so in the best interests of ALL passengers, they have enacted this policy.  I get it.  Makes sense. No argument.

Now, flash forward 3 years.  The connection technology has increased according to Moore’s law (actually it’s Nielsen’s Law that pertains to networks), and now there’s more than enough bandwidth to go around.  You can access ALL your cloud-based media while sitting in your seat.  You’re now travelling with a device that has limited local storage because you’re leveraging the cloud for your applications, files and media.

Ok, so far?  Now let’s assume GoGo has just added a VOD content offering to their service.  A la Netflix. Which, makes sense, and I would be sorely disappointed with them if that wasn’t on their 5-year roadmap.  And now, without your knowledge or consent, they begin to re-prioritize and slow down traffic to your personal media. Or worse, block it entirely.  Why? Well, so that they can increase the monetization of their VOD offering.  If you can’t fully access your media, you might pay for theirs. That behavior will be sanction-able without enforceable net-neutrality policies in place

That’s just one small instance, in one small corner of the Internet.  Multiply that scenario by dozens of major carriers, thousands of smaller municipal carriers, hundreds of consumption platforms, millions of apps, billions of consumers and you have (again) one industry causing turmoil for their own short-sighted financial gains.  As much as I support their rights to monetize, I think they need to take a MUCH harder look at the financial models available to them.  And perhaps choose one that offers a thinner profit margin than they were hoping for, but one that still provides the public (their customers) open and unfettered internet access under the principles of Net Neutrality.

And I say to the FCC, time to get with the program.  If you are unable to fully grasp the importance of the infrastructure you govern, it is time to step down and let those who do help to inform policy.