The FCC, headed by probable Telco Henchman Ajit Pai, just voted to repeal Net Neutrality rules put in place during the Obama administration. These protections were enacted to protect consumers from having their internet traffic de-prioritized by Internet Service Providers for any reason, whether that be content-based, source-based or otherwise. There has been a lot of alarmist hand-wringing about what this could mean for the free and open Internet as we know it in the United States. Here are some ways in which you may be affected without these protections.
Mobile phone providers have recently begun allowing freebies on top of their data plans. For example T-Mobile doesn’t count music streaming from a number of streaming services towards your data plan usage. It’s not that much of a stretch to assume that, now that it is legal, mobile providers may start adding on charges for these services rather than including one or more with their data plans. It will allow for them to look at usage patterns and inflate their bandwidth offerings, knowing that users will need to pay more to get the services they actually use on their devices.
Providers in other countries (like in the Philippines, where we have offices) have already partitioned data charges like this, separating access to things like Facebook, streaming services, and messaging to add multiple fees to customers’ bills. The messaging portion is especially interesting to the providers, as they have begun losing SMS dollars to free services like iMessage, Facebook Messenger, and WhatsApp that utilize data services rather than the providers’ SMS networks.
The Cable Companies Strike Back
“Cord Cutting” has been happening at a breakneck pace now that streaming services such as Netflix, Hulu, Amazon Prime, and HBO Now allow consumers to watch original and broadcast network programming on their TVs and any number of devices without being beholden to the cable companies. But some of these consumers are still stuck using those cable companies as ISP’s as well (Spectrum is the only high speed Internet vendor in my neighborhood). You can be sure that as their bottom lines take a hit, they’ll hit back with increased fees specifically targeting traffic from streaming competitors. This can happen by bandwidth throttling or outright charging for a package including streaming, wheras it was previously illegal to do so.
Return of the Monopoly
If you are old enough, you’ll recall when the US government broke up AT&Ts control of the Bell Operating Companies, reducing its stranglehold on telecommunication in the US and Canada. As telcos have gobbled up smaller providers and merged with one-another, the 8 “Baby Bells” that resulted from the original split are now essentially 3 companies: Verizon, AT&T (again), and CenturyLink. These are also now some of the largest providers of ISP services in the country along with the previously mentioned cable companies. However, CenturyLink has been partnering with Comcast in some markets, AT&T is trying to merge with Time Warner, and Spectrum is the new company resulting from the merger of Charter, Bright House, and Time Warner cable providers.
As options for access decrease, the “free and open market” that supposedly prevents these providers from overcharging their consumer-base disappears.
The Phantom Menace (Sorry)
Finally, the picture painted by all of the above mergers is one in which content generators and access companies are no longer separate. This wasn’t a problem as long as phone/data purveyors didn’t care what you did with their lines, but now, we are in a world where ISPs own studios and streaming services, and they all want access to their content to be free and fast, but are disincentivized to offer the same access to their competitive content creators. This means poor quality streaming if the content isn’t also created by the ISP or its parent company.
Sure, there’s no guarantee that any of these worst-case scenarios will definitely occur. But these publicly traded companies are beholden to their shareholders before their customers, so the bottom line will always be king. That used to give the consumer some power, when they could vote with their dollars and leave a vendor that wronged them, but as we see with all of the consolidation in the industry, that competition pressure is becoming less and less relevant. Only time will tell how bad things will get, but be prepared for what may come.