How the Net Neutrality Repeal May Impact Your Business

January 2018: Now that net neutrality is repealed and Internet Service Providers (ISPs) are also content service providers, what does this mean for organizations and the customers who do business with them? While there are a lot of unknowns, organizations and consumers alike could face changes in internet speeds, access and costs as early as later this year.

Here are the repeal’s biggest winners and losers and how your business can prepare:

Content is king: how we got here

Before we had the internet, we had the airways. There were only a certain number of frequencies available for broadcasting, so everything went through a handful of licensed broadcast stations like ABC and CBS. Then came cable TV and its huge wired infrastructure, making hundreds of channels possible for people who paid for the service.

Once the internet got fast enough to stream content as smoothly as broadcast and cable, anyone with an internet connection could become a content distributor. In 2015, the FCC codified net neutrality, or equal access to internet throughput, by prohibiting ISPs from blocking (preventing access to lawful content), throttling (slowing data based on its content) and paid prioritization (creating an internet fast lane at a premium price) for content or distributors. With the repeal, these three activities are no longer prohibited.

While the internet itself remains unchanged, access to the content you want — and your customers’ access to your website — is now in the hands of ISPs, such as Comcast Xfinity, AT&T, Verizon, Charter and others. Since many ISPs are acquiring content companies and moving into content distribution, they now have a natural incentive to favor their own content. Or to favor the content of those who are willing to pay more for faster content delivery. Neutrality is no more.

Why internet speed matters

Which do you prefer — a website that loads within a couple of seconds or waiting for pages to load? A video that streams seamlessly or one that gets pixelated and freezes? Having a normal conversation over Skype or video conferencing or dealing with delays, echoes and noise?

We’re accustomed to the quality of service we’ve been getting from high-speed internet traffic that’s been treated equally. And in many ways we’ve come to rely on it.

Congress, bundles and the biggest losers

Congress could pass a law that takes internet regulatory control away from the FCC and creates a permanent set of neutral rules for internet access. However, lobbyists for ISPs will have a strong opinion about that.

More likely is the emergence of tiers based on speed (basic, standard and fast, for example) or bundles based on content categories. Content categories might include social media, sports, movies, email, gaming, search engines, etc. So, just as with cable TV, internet subscribers would be able to access websites within the categories they’ve paid for but not other websites. Some countries that never had net neutrality to begin with, such as Portugal, are using the content category approach, and others are using the speed tier approach.

The biggest losers with the repeal of net neutrality are those who won’t be able to afford the speed tier or category bundles they used to get. Lower income people will therefore have different internet experiences overall than people who can afford higher tiers or more bundles.

Startup companies and entrepreneurs are also big losers. Internet fast lanes will cost more, making it difficult for young companies to provide the same kind of fast and seamless web experiences as established companies. Since the vast majority of customers won’t wait longer than three seconds for a page to load, this puts small companies at a disadvantage and innovation will suffer. For context, Facebook, Amazon and Google were all once startups that were able to launch without facing these kinds of barriers to entry.

Biggest winners

ISPs are the biggest winners, and so are web-based businesses that are owned by ISPs. Free-market purists who don’t believe the internet should be regulated are the ideological winners. And later, those who figure out how to turn the lack of regulation into something they can sell will be winners — performance-based internet companies will pop up, entrepreneurs in the IT space will innovate to offer alternatives, and new technologies could emerge to meet unmet demands.

It’s important to note that not all ISPs were following net neutrality rules anyway, and there will be considerable pressure via social media for ISPs to continue to behave fairly, despite the repeal. ISPs that play fair might become the biggest winners of all by winning market share.

What your business should do to prepare

The repeal of net neutrality is mostly a budgeting and design issue for businesses. If your business is involved in content distribution or uses chat, VoIP, video or collaboration platforms, it’s more likely to be impacted by the changes. This year will be a transition year and the ideal time to get ready — you could see ISP pricing and service differences as early as mid or late 2018.

Meet with your IT department head to discuss:

1. Network optimization solutions. For smooth internet and high-quality voice, look at ways to optimize what you already have or consider Software-Defined Wide Area Network (SD-WAN) technology. SD-WAN works like Waze for your internet, finding the best routes on the web.

2. Private backbones. For your mission-critical applications that require specific levels of service, consider a private network that does not rely on the regular internet. This isn’t an option for some companies but it might be for yours.

3. Remote workers and work from home policies. If you have team members who travel a lot, work internationally or work from home, their user experiences may suffer under the new rules and their productivity could slow. Factor in this possibility while budgeting and planning.

4. Prepare to buy a better package. You won’t know what your preferred level of service will cost until your ISP tells you, but be prepared to pay more for the same internet speed. Shop around — you could get a better deal somewhere else.

Leapfrog Services helps our clients with all things related to ISPs and IT networks. We manage hundreds of networks and constantly monitor connections, performance and latency issues. If there are changes in any of these areas or bottlenecks in service, our team sees them and works with ISPs and other vendors to fix the problems and regain performance.

Our team is ready to help our current clients, and new clients navigate the changes to net neutrality rules by working through budget and design issues in a way that serves each company best. If you have questions or concerns about how the new rules may impact your organization, please feel free to contact us.

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