How would the end of net neutrality impact retail?
The Federal Communications Commission (FCC) announced plans last week to roll back net neutrality rules that require internet service providers (ISPs) to provide open access to their networks for all digital content.
The rules, initially put in place by the Bush administration in 2005 and later formalized by the Obama administration in 2015, prevent ISPs from charging customers extra fees for high-quality streaming and other services. ISPs are also prohibited from favoring certain sites by slowing or stopping content delivery at others.
In a statement, Republican FCC Chair Ajit Pai said the current “heavy-handed, utility-style regulations” have “depressed” investments in expanding broadband networks and innovation by ISPs. His proposal promises to bring back the “light-touch regulatory approach” established by the Clinton administration and a Republican Congress.
Mr. Pai’s draft order will require ISPs and telecom companies to be transparent about their offerings instead of being regulated by the FCC.
The telecom titans such as Comcast, Verizon and AT&T have said the rules prevent them from offering customers a wider selection of services at higher and lower price points. They have also argued that data-gobblers like Netflix and Amazon.com should have to pay more for the disproportionately high bandwidth they use.
Twitter, Amazon, Facebook, Google, Reddit, Netflix, Airbnb and Spotify have all protested the changes. In an unregulated internet, they argue, ISPs would wield too much control over how and what users see by charging extra for faster speeds.
Some see the internet is a modern communication method and, as such, restricting access a free speech issue. Smaller companies in particular are expected to be challenged competing against larger players such as Netflix or Amazon that would be able to absorb any increase in fees or have the leverage to become part of bundled packages.
In an open letter to the FCC, a group made up of 1,000 small businesses from around the U.S. wrote: “Without net neutrality, the incumbents who provide access to the internet would be able to pick winners or losers in the market.”
The Republican-controlled FCC is likely to vote 3-2 along party lines in favor of the plan at its regular monthly meeting in December.
- Chairman Pai Proposes to Restore Internet Freedom – Federal Communications Commission
- F.C.C. Plans Net Neutrality Repeal in a Victory for Telecoms – The New York Times
- Here’s How The End Of Net Neutrality Will Change The Internet – Wired
- FCC will vote whether to delete net neutrality on December 14 – TechCrunch
- Net neutrality: why are Americans so worried about it being scrapped? – The Guardian
- Five myths about net neutrality – The Washington Post
DISCUSSION QUESTIONS: Should both large and smaller players in the retail industry be protesting or supporting the potential repeal of net neutrality rules? How might a repeal impact how retailers and brands sell and reach customers on the internet?