Yesterday the Federal Communications Commission released its final draft the exceptionally misleadingly titled "Restoring Internet Freedom" order. The FCC announced a December 14 vote on the order, which would do the opposite of restoring anything resembling freedom. The federal agency wants to vote to repeal the current net neutrality rules which were enacted to ensure that Americans would have equal access to the internet.
If you're reading this, chances are you're already interested in the topic. Still, some quick background:
Renamed "Open Internet" a while back, net neutrality provided a regulatory framework that specifically prohibited:
- Blocking: Broadband providers may not block access to lawful content, applications, services or non-harmful devices.
- Throttling: Broadband providers may not deliberately target some lawful internet traffic to be delivered to users more slowly than other traffic.
- Paid prioritization: Broadband providers may not favor some internet traffic in exchange for consideration of any kind. Internet service providers are also banned from prioritizing content and services of their affiliates.
In its place the FCC is proposing to "Restore Internet Freedom" as follows:
- Reinstate the "information service" classification of broadband internet access service first established on a bipartisan basis during the Clinton Administration.
- Restore the determination that mobile broadband is not a "commercial mobile service" subject to heavy-handed regulation.
- Restore the authority of the nation's most experienced cop on the privacy beat – the Federal Trade Commission – to police the privacy practices of ISPs.
What it means for agencies, advertisers and marketers
We'll get to the winners and losers below -- and there will be plenty of each -- but as something of a silver lining, this regulatory shift would open up a wide-range of opportunities for agencies, advertisers and marketers. This could be a perfect opportunity to pair programmatic creative with programmatic media buying. There will be hundreds of different rate plans targeted at specific cohorts. There will also be opportunities to create new consumer and brand experiences that include "unlimited" bandwidth or "free" bandwidth offers.
The restoration of this version of "internet freedom" will change the media distribution landscape dramatically. It will be the perfect place for new creative ad units and offers. Think about how your brand can be positioned as a trusted, needed, content companion. It's an unintended consequence, but the FCC is about to give a lot of smart marketers an opportunity to shine.
About those winners and losers, though: this is where the silver lining begins to tarnish.
Big internet service providers and wireless carriers such as Comcast, Verizon, AT&T, etc., come out on top. The bigger you are, the happier this makes you. These organizations will be able to craft any kind of data packages that the market will bear. They will be able to throttle bandwidth, lie about unlimited plans, favor big payer or affiliate partner traffic over competitive traffic. (Imagine Comcast favoring Xfinity over Netflix or throttling down your bandwidth if you were watching Star Trek: Discovery on CBS All Access.) Pricing will not be market driven; most ISPs are de facto monopolies in their specific territories.
Alcatel-Lucent, Broadcom, Cisco, Corning, Ericsson, IBM, Intel, Nokia Solutions and Networks, Panasonic Corporation of North America, Qualcomm and 50-plus other tech companies who signed the original letter against Title II (which the FCC is planning to repeal as well) also come out on top. As do lawyers, especially attorneys for… well, just about everybody involved.
Netflix and every other content provider. The goal of net neutrality was to ensure that Comcast did not favor delivery of its own content over competitive content such as Netflix. Or Amazon. Or Hulu. Content providers who do not own their own distribution are now at serious risk.
The list of losers is long: Dropbox, Ebay, Facebook, Google, LinkedIn, Microsoft, Reddit, Tumblr, Twitter, Vonage Holdings Corp., Yahoo! Inc. and about 150 other companies that signed this letter in favor of net neutrality are among them. Less friction for consumers means better business for big tech. Although, it will be interesting to see whether or not big tech likes this particular recipe for restoring internet freedom. They may.
Small businesses and start-ups. If you can't afford high-speed bandwidth, too bad. If your start-up uses lots of data, or its new augmented reality app requires consumers to have access to enough bandwidth to use it, too bad. If fill-in-the-blank needs equal access to the internet, too bad. If your online service competes with an online service that the big telecoms or ISPs favor, too bad.
You. If you're a normal person and you want access to the internet, get ready for all kinds of airline industry-style charges. You'll either accept a slower connection or pay extra for going over a threshold on your unlimited data plan. In practice, you're likely to get amazing speed and service for video content you don't care about and terrible service while trying to use the things you really want. The solution … pay more.
A few closing thoughts
I am not advocating for any specific type of government involvement with the internet. I think government has proven that it has no business being in any business. But I believe we should govern America for the best possible GDP (as opposed to governing to enrich a big few big corporations). Al Gore may not have invented the internet, but his metaphor about it being an information super-highway was pretty good. Imagine an America where a private company could close the left-lane of I-95 between NY and Hartford because they didn't have the money to maintain it, or worse, wanted to use it for themselves and their friends. How would that affect commerce on the I-95 corridor?
Our world is digital – all digital. To make the most of it, my delivery truck and your delivery truck should have equal access to the same highway system and connecting roads. Just like we do in the physical world.
Lastly, this is a huge topic that will impact every person in the United States. It's worth some of your time to go a bit deeper and to decide for yourself how the "Restoring Internet Freedom" act is going to change your life – because it absolutely will.