Think abolishing a free and open Internet is a win for business? Think again.
Federal Communications Commission (FCC) chairman Ajit Pai is pushing to revoke net neutrality regulations passed in 2015 by the Obama Administration. The public has just three weeks to react before Pai’s rollback on internet freedoms will be put to a vote.
Facebook, Google, and Netflix have all issued statements on their support for the existing regulations. However, it’s Internet service providers that would gain the most from killing net neutrality because of the opportunity to throttle and monetize page-load speed. Consequently, Verizon, Comcast, and AT&T have been the most outspoken on deregulation.
What is ‘Net Neutrality?’
Net neutrality is the principle that ISPs and the government must treat all data on the Internet equally. This means not discriminating based on content, website, user, platform, application, or method of communication. Ranking factors for Google, for example, are then set according to relevancy and quality to provide the best user experience.
Existing legislation treats the internet as an essential service or a “common carrier” like electricity and telephone service. This designation means the internet is essentially a right of every American to have fair access.
Killing net neutrality would thus have an opposite effect by creating overregulation set by the private sector – primarily ISPs.
If Comcast and AT&T get their way, they will slow the loading speeds of websites that do not pay an exuberate fees for a “fast lane” and even block outside services they don’t agree with — called throttling. It also opens the possibility of creating partnerships with other corporations to bury their competitor’s ranking regardless of quality and relevancy of the content.
Canadian Prime Minister Justin told CTV News that it’s “essential to keep the freedom associated with the internet alive.”
“The idea of throttling certain sites or charging extra for certain services just does not make sense and if we’re going to continue to ensure that … digital technology and use of the internet is the lever to create economic growth and opportunities for citizens right across this country, we need to continue to defend net neutrality and I will.”
Proponents of net neutrality, like PM Trudeau and Silicon Valley, argue that these regulations preserve the fundamental internet standards and international consensus authority. What Pai is proposing is bit-shaping the transport of application data in order to undermine the transport layer’s design flexibility. This would allow for corporate censorship online with no benefit to companies large and small other than leading ISPs.
For Marketers, Advertising Costs Will Skyrocket
Joshua Lowcock, chief digital and innovation officer at UM, told AdWeek that repealing net neutrality is going to kill competition and innovation.
“It’s going to fundamentally change the way (marketers) can approach digital media, the ROI they can extract for it and even what partners they should be looking to and considering,” he said.
It all comes down to the user experience provided to consumers.
Marketers and agencies will find slow load speeds extremely frustrating despite following best practices for landing page optimization because analytics are likely to be skewed due to an inevitably higher bounce rate.
For smaller brands, the challenge is obvious. Enterprise-level companies will have the capital to move up and stay ranked in the top of search, while small brands would be relegated to the second and third page of SERP.
This is bad news for startups, but enterprises will inevitably suffer too. The marketing budgets of large companies are going to take a big hit for online visibility, something they already excel at. Advertising costs take another 1-2 if ISPs make deals with each other on what industries they “specialize” in.
Jascha Kaykas-Wolff, Chief Marketing Officer at Mozilla, sees the availability of online lead generation deteriorating in the age of a corporate-controlled Internet.
“Without net neutrality, creators and brands could struggle to reach new users and investment to ideas will struggle and dry up over time,” he said.
Kaykas-Wolff says the Internet might start to look more like cable TV.
“Clients should be outraged, and some of them are, at the prospect of ISPs as toll booths limiting access to a free and open internet,” one exec at a major media buying agency told AdWeek, who wished to remain anonymous. “It’s one thing to complain about a duopoly of Facebook and Google dominating digital dollars, but this action has the effect of strengthening them while adding to cost and complexity and reducing choice and information. ISPs win, but consumers, advertisers, and agencies all lose out.”
The Argument in Favour of Repeal
Despite backlash from the leading tech companies and the public, FCC chairman Pai and ISPs say this new revenue stream will actually drive innovation that expands and improves quality of service.
Pai is pushing for light-touch regulations and removing the Internet’s common carrier status in favour of the designation of information source. He says this is necessary to take control of the Internet away from lawyers and bureaucrats and back into the hands of entrepreneurs. Pai also argues that the regulations in place during the Clinton administration were ideal and was what propelled the internet’s exponential growth in its early stages.
The FCC is set to vote on repealing net neutrality in December.