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13
May
2014

Dissolution of Net Neutrality: Looking At The New Internet Landscape

by Bill

Internet profitsThe impending dissolution of Net Neutrality continues to make news as more than 100 internet companies signed a letter to the Federal Communications Commission beseeching the FCC to “take the necessary steps to ensure that the Internet remains an open platform for speech and commerce so that America continues to lead the world in technology markets.”

Digital Trends reported a symbolic gesture by web hosting companies throttling connections of FCC IP addresses to 28.8 kbps as a show of what losing net neutrality may soon do to the companies the FCC is failing to regulate.

Level 3 Communications, a major internet backbone provider has released their data on where bottlenecks are occurring, and all of them they attribute to local ISPs with near monopoly coverage in the particular market, leading to what Level 3 characterizes as intentional foot-dragging and holding traffic in ransom for a juicy “internet fast lane” payment.

Meanwhile, Netflix has announced that they would be raising prices, not only for US customers, but for Netflix subscriptions in the UK and the EU, which begs the question of whether Europeans are being hit with, what may be, a surcharge for the US failure to adhere to the principles of Net Neutrality. While some might be inclined to dismiss the price increase as mere coincidence, others think that it’s telling that Netflix is also rolling out a discounted pricing plan which aligns with the old pricing structure but limits user bandwidth consumption by restricting streaming videos to one at a time at SD resolution rather than HD.

Back in the days of dial-up, consumers had literally thousands of ISPs competing to provide connections which for the most part kept any one service from overreaching and kept prices competitive. When broadband rolled out, the FCC, rather than keeping the regulations that kept the dial-up market competitive, listened to telecom industry lobbyists who argued that having competition would be a disincentive to their making the necessary investments required to make broadband available to their subscribers. While the idea might have had some merit, the US telecom industry has used their monopolistic control of the ISP market to provide internet service that is demonstrably slower and more expensive than other first-world markets and have used the tremendous cash flow to enrich their shareholders or to fund more consolidation, worsening the diversity of choices for consumers in the ISP marketplace.

Now with near-monopolistic control of many of the country’s markets, the notion of content providers being forced into a new “pay to play” scheme with little to no fear of losing customers, the telecoms are tapping another new revenue stream – charging twice for their services, as if they were charging the caller and receiver of a call, which might make shareholders cheer, but leaves virtually everyone else stuck with no options but to pay up. The one glimmer of hope is the increasing mobilization among consumers and content providers alike, who are pressuring the FCC to provide proper regulatory oversight on this critical utility of the modern era.

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