Will net neutrality repeal kill the next YouTube?
Internet

Will net neutrality repeal kill the next YouTube?

In a move that sent shockwaves around the world, the United States Federal Communications Commission (FCC) voted to repeal the net neutrality laws that kept the internet open and free, paving the way for service providers to effectively throttle certain content and decide who can access what and how. While appeals are likely and the battle continues, the question of what this really means, particularly for business becomes even more crucial.

Concerns around the repeal of net neutrality laws, the regulation that forces Internet service providers to treat all data on the Internet the same and not charge differently for types of content or other elements, have centered on consumer access. The implications for business are not fully clear as yet, but depending on how ISPs react to this freedom the consequences could be significant, especially for smaller businesses.

 

Will this kill innovation and stifle competition?

For many, the core impact for business will be a stifling of innovation and competition. The startup ecosystem, for example, could be hampered as a result of privileging certain traffic or websites over others. Mehdi Daoudi, CEO of Catchpoint, a New York City-based digital experience monitoring (DEM) company, says his main concern is that startups will not be able to compete with the much faster load times of large companies.

“Net neutrality provided a level playing field for any site’s ability to deliver superior performance – fast loading, reliability – which allows them to attract and retain users. Now any new service, which does not have the resources to afford CDNs or other techniques to compensate for throttling, will be at an automatic disadvantage in a world where everyone expects lightning-fast load times,” Daoudi says.

He believes that if net neutrality did not exist 10 or 15 years ago, we might have never heard of YouTube, Facebook, or any of the other innovators that created the internet landscape as we know it. “Do we really want to create a system in which the next YouTube is killed before it ever gets a chance?”

Giancarlo Di Vece, President of Unosquare, a global software engineering company, says that, as with every decision, there are positive things that will come out of this, as well as negatives, although he adds he is having a hard time thinking about positive outcomes for the public. 

“While media reports have ushered in a heightened sense of awareness and concern to the general public, I do believe that this decision will be detrimental to an egalitarian approach to internet,” he says. “In a practical world there are advantages to the removal of net neutrality – if you tried to watch the season premiere of Game of Thrones and the HBO platform could not handle traffic / bandwidth for its user base, then you experienced net neutrality there – HBO was not given any special treatment through any ISP and even with a forecasted audience, they could not do much to help the situation.”

On the other hand, though, it also allows enterprise communication companies and ISPs – in some instances the same companies – to control the service delivery of content. “This means that an ISP could choose to benefit Netflix instead of a startup streaming service – that will not see success because its quality of delivery was weak,” he says. “It allows the manipulation of client experience through a relatively small number of providers.”

 

Will this just give large companies another advantage?

Harold Li, Vice President at ExpressVPN, agrees, saying allowing ISPs to freely prioritize, throttle, or even block specific sites will inevitably lead to companies being able to pay to speed up their own sites while slowing down those of competitors. “This ‘pay to play’ model will inevitably benefit big, established players while thwarting new, smaller startups. Imagine a world where Netflix never took off because TV and movie studios paid ISPs to keep its video streams slow and stuttering, or where Stockholm's Spotify never became an international player because American record labels paid to block the service so people would keep buying CDs,” he says.

Gus Robertson, CEO of NGINX, the engine delivering sites and applications to the modern web, says: “The most heart-breaking part is the enduring legacy these changes may have on the engineers and entrepreneurs of tomorrow, the next generation of creators building a connected world we haven’t dreamed up yet. It’s no longer the best app that wins. It’s the companies with the money to pay for bandwidth. Imagine that in 2004 Mark Zuckerberg didn’t have the money to pay for high-speed traffic to Facebook, but Myspace did. What would social media look like today?”

The implications of a throttled internet are not just about access to content and data, but also about innovation in emerging areas such as the Internet of Things. Mike Phillips, CEO and co-founder of Sense, says: “This ruling has put the data pipeline that fuels IoT devices into the hands of cable companies and other ISPs. As companies who provide smart home offerings themselves, they now have an unfair advantage in what is still a nascent industry. More importantly, consumer choice will ultimately be limited.”

Scott Petry, CEO and Co-Founder of Authentic8, adds that while much of the discussion has centered around media companies and their streaming services – which will certainly be a major source of revenue for ISPs, any company delivering a service over the internet may be forced into a position of paying to maintain service levels. This could include cloud-delivered business applications, storage services, reporting and monitoring solutions, and more. “This may also adversely impact IoT vendors that rely on network performance and quality of service metrics for timely delivery of information. I doubt vendors of these services have budgeted additional bandwidth expense,” he says.

Robertson believes the reason we are living in a world of smart devices, robots, solar power, and electric cars is because all these technologies came about through open tools and innovation.

“The cloud and open source tools aren’t going anywhere. However, if ISP bandwidth and prioritization become the bottleneck to creativity, we may be squashing new ideas, new apps, and new innovations before they even get off the ground. The internet is one of the institutions in the world where the principle of equal opportunity applies most strongly, and losing neutrality is a real and present fear for entrepreneurs and innovators,” he says.

The result is fewer choices and less innovation for everyone globally. Li says that VPNs provide internet users with one tool to protect themselves against blocking and throttling, by preventing ISPs from seeing what sites or services you are accessing. “But we believe the broader fight to uphold net neutrality principles must still continue on the regulatory front, in the US and around the world,” he adds.

Petry believes that the rollback may drive more providers and users to encrypt more of their traffic and route traffic through obfuscation layers. While most web traffic is encrypted, the destination and origin of that traffic remain visible to ISPs. Since the use of VPNs and proxies are likely to be charged a premium, this creates an environment where users need to balance costs with privacy. In organizations where privacy and confidentiality are critical, such as law firms, news agencies, and healthcare providers, this will mean higher costs or compromised security, Petry says.

 

What is the global perspective on this US law?

The impact further afield is also difficult to gauge since this ruling is a US one. Mateusz Cieslak, General Manager for Comarch in Canada says this puts the US at odds with current thinking in Europe, which will lead to some interesting discussions. “I don’t think it’s a given that other countries will follow the US’ lead. It hasn’t happened on issues such as data regulation, for example,” he says, adding that there is still a way to go before it is enforced.

“Every country will have slightly different regulations, and we could see internet access rights change country by country, which will add a layer of complexity to internet provision. It all comes down to the political landscape and how much control individual governments want to have. In China, for example, there is not the same expectation of a free and open internet as there is in Europe. Of course, whatever the outcome, vendors have to be flexible enough to comply with regulation,” Cieslak says.

Cindy J. Ford, Vice President and GM (US and LATAM regions) at global hybrid IT solutions provider Cogeco Peer 1, is hopeful that, despite the disappointing decision, businesses will continue to work together to keep the internet open and free to support innovation. “It now falls on businesses and consumers to band together and demand that content remain agnostic,” she says, adding that open internet is a critical means for under-represented and marginalized groups to be heard, and that global platform must be protected. “Businesses and consumers alike, rely upon the internet to provide equal educational, social, and economic opportunities.”

Ford says that although ISPs have stated that they will not take advantage of the removal of these protections, we must now view ourselves as stewards of the internet and connectivity as we know it. “We, businesses, should look inward to see how we can continue to be advocates for our clients while maintaining ethical practices, and simultaneously preparing for any consequences to the market at large,” she says. “We are optimistic that ISPs will continue to not unfairly discriminate in their treatment of internet traffic, but businesses must hold themselves accountable and use their voice to oppose any perceived abuse. Pending an appeal, this is now a regulatory issue that businesses must prepare for.”

Resistance to the repeal of net neutrality has been intense and California has even defied the FCC to approve a bill supporting net neutrality, while the governors of New York and Montana issued executive orders banning ISPs that are not net neutral from doing business with the government. More states are suing the FCC and activists across the globe are putting pressure on the regulatory body to reverse its decision. The fight is far from over, but if net neutrality is a casualty of the competitive drive the implications for all businesses could be significant.

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Bianca Wright

Bianca Wright is a UK-based freelance business and technology writer, who has written for publications in the UK, the US, Australia and South Africa. She holds an MPhil in science and technology journalism and a DPhil in Media Studies.

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