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Net Neutrality's Demise and the Channel: Win, Lose or Draw?

The days of regulating the internet as a telco service are numbered. What's that mean for your business?

Lorna Garey

November 27, 2017

4 Min Read
Net neutrality


Lorna Garey

In honor of Cyber Monday, a few hundred businesses sent an open letter to FCC Chairman Ajit Pai in a last-ditch (and likely doomed despite the efforts of John Oliver, see video below) attempt to persuade Pai to reverse course on scrapping net neutrality rules. There were a couple of telco signatories – Blue Sky Telecom and Burlington Telecom – but for the most part, TSPs and ISPs are happy to see the end of utility-style oversight, where broadband is considered a telecommunications service and regulated under Title II of the Telecommunications Act.

Verizon issued a statement saying it’s “very encouraged by Chairman Pai’s announcement today that the FCC will move forward next month to restore the successful light-touch regulatory framework for internet services.” It and other members of the National Cable & Telecommunications Association have reportedly spent more than $500 million on lobbying efforts to get to this point.

Broadly, this debate pitches ISPs against content creators and distributors. Net neutrality rules prohibited blocking or slowing down of web content and banned internet providers from prioritizing certain traffic. The Restoring Internet Freedom order would classify broadband Internet access as an “information service” and affirm the need for a uniform federal regulatory approach to apply to interstate information services, like broadband Internet access. ISPs would be required to disclose information about any plans to prioritize or throttle traffic, and the FTC would again be charged with protecting consumers from “unfair, deceptive, and anti-competitive practices.”

But what does all this mean for agents?

One argument for reversal is that investments in broadband networks declined under the net neutrality rules. The FCC contends that internet service providers pulled back on plans to deploy new and upgraded infrastructure and services, especially in rural and low-income communities. If removal of these regulations encourages new investments in broadband internet access services by local small businesses, that’s a win for partners. Some experts expect new, tiered service offerings, so you’ll have a role interpreting that additional fine print on customers’ plans. Will there be data caps, or will content from one particular content provider be given priority through paid prioritization?

There’s also an argument to be made that, given the government’s decision to subject mobile broadband to net neutrality regs, the current rules on traffic prioritization throw a wrench in 5G. Slower rollouts of 5G could hold back IoT initiatives.

In its new Notice of Proposed Rulemaking, the FCC also stated that net neutrality actually weakened online privacy by stripping the FTC of its jurisdiction over …

… ISPs’ privacy and data security practices. Restoring the agency’s authority to regulate security and privacy could, perhaps, lead to a more uniform set of rules. But don’t bet on it — the National Conference of State Legislatures reports that as of July, 21 states had introduced measures in response to the repeal. Again, customers will need guidance.

Here’s what’s clear: On Dec. 14, the FCC will approve the Restoring Internet Freedom order by a party-line 3-2 vote. Net neutrality proponents, many of them with very deep pockets, will challenge it in court. Facebook, Google and others have signaled that they’re ready for a fight. ISPs will be watching consumer sentiment and responding accordingly. For example, in a recent blog, Comcast SVP David Cohen said Pai’s proposal is not the end of net neutrality rules.

“With the FCC transparency requirement and the restoration of the FTC‘s role in overseeing information services, the agencies together will have the authority to take action against any ISP which does not make its open internet practices clearly known to consumers, and if needed enforce against any anti-competitive or deceptive practices,” Cohen wrote. “Comcast has already made net neutrality promises to our customers, and we will continue to follow those standards, regardless of the regulations in place.”

AT&T and Verizon are also on record as saying they support the concept of an open internet. Of course, both are content providers as well as ISPs.

Expect a new round of media coverage in a few weeks. For now, partners should be ready to explain what the debate is all about and where key suppliers stand.

What’s your take on the demise of net neutrality regulations? As a channel partner, how might proposed changes affect your business? Join the conversation in comments!

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