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Net neutrality is just as confusing

We’ve treated the internet like a public treasure until now, thanks in large part to the net neutrality policies championed by many technology advocates. This has led to widespread adoption of online connected services, many technological breakthroughs and the creation of an entirely new economy. Because the internet is unfiltered and uncensored, information travels freely in a utopian, libertarian dreamland. It’s a blessing and a curse, net neutrality.

Hold onto your smartphones, though. The FCC announced a change in the way it would regulate the internet. Essentially, the government is going to stop restricting internet service providers (ISPs) like Verizon or Comcast from blocking or otherwise slowing down data streamed from the websites you visit online. That means these companies will for the first time ever have the legal right to block content that travels over their internet pipes.

Some are decrying this as the end of the free and open internet. Here’s why that isn’t true on its face, and what you can expect as companies shift control over what you do online. Especially what that might mean down the road for marketers like myself.

The Internet Hasn’t Been Free & Open For A While

Let’s start with some of the basics. The internet isn’t neutral. Large content companies already control what you see and do online. These are companies like Amazon, Facebook and Google, leaders in their respective segments. They have profited on a free and open internet to build their business models and offer services that have attracted the most customers. They’ve essentially come out as the winners in the free market system, something that should be celebrated.

As they’ve grown, those companies have gained a lot of control over how you experience the internet. When you do a Google search, they’ve determined the answer to your question based on their proprietary rankings. Facebook’s algorithm is responsible for which articles show up in your feed and which ones don’t, for better or worse. Amazon’s product suggestions influence purchasing decisions. These are companies whose entire business model is built on a “walled garden” approach, where they have every incentive to filter the internet through their brand.

Arguments in favor of net neutrality often point to its effect on startups. “The Next Netflix,” as it were. While it was theoretically possible to go toe-to-toe with the big boys by delivering a superior consumer experience, most startups only compete to be bought by larger companies these days. We’ve already decided who the winners of the internet are, for the most part.

What Will Happen Without Net Neutrality

What’s changing is those websites’ access to their customers. Before, ISPs had to treat all traffic as the same. Now, they’re free to penalize companies that don’t pay for access. They don’t get a free ride anymore, nor do they get to be the only ones to decide what you consume on the internet. So, if Comcast wants to compete with Amazon in e-commerce, they can block traffic to Amazon. That’s legal with this new rule change. The balance of power in the fight to control what you see online just shifted.

ISPs can also set up a two-way toll, with customers paying for access to the internet and internet-based companies paying for access to the customers. Buy stock in Comcast, Verizon and AT&T now. Those ISPs can also shut out access to websites completely if they offer a competing product and want to funnel more traffic into it. This has actually happened in recent history. Then, it was illegal. Now, it’s not.

What This All Means For The Future of Marketing

As we like to take a measured approach at Digital Pudding, these net neutrality changes are neither bad nor good. They just are. The rules of the game have changed and we need to understand that.

Here’s a list of predictions for the end of net neutrality:

  • Tiered packages for customers to access different services like streaming video is a popular theoretical outcome, though I’m not entirely sure this is going to affect consumers like that
  • Facebook and Google will certainly pay more, which means their advertising rates likely increase, meaning everyone pays more to access customers
  • ISPs can set up their own ad blocking and ask consumers to pay extra for an internet without advertising
  • At the same time, carriers can better sell ads on their networks to their customers, especially if they can block competing video ad servers and the like

Finally, this will certainly have a stifling effect on innovation. As mentioned in the open, the internet has been the driving force of the economy for decades. Allowing internet monopolies to self-govern is likely to make them central to any further developments online. This means if they can’t profit from it, they won’t do it and they’ll keep you from doing it, too. Putting so much power into these companies could even drive us into a recession.

Changes That Can Reverse The Trend

Now, there is one policy that could reverse all this fast and actually lead to a free and open internet. Deregulate the “last mile” of cable. If you allow any provider to connect you to the internet, regardless of who owns the wires, you increase competition and access, driving down prices and returning control to the consumer. Think about it. If Google or Facebook or some other unknown entity could connect you to the internet (and you could choose from companies that didn’t hold monopoly power) you’d get to decide what you see, not some company.

The way we discover content on the internet is already controlled by a handful of powerful brands, with Facebook and Google receiving more than 75% of all ad dollars spent online.  For this reason, the concept of net neutrality is under attack from both sides. While it seems significant, this latest change is just the evolution of what we’ve been seeing for years. We’ll see how this plays out.

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