The Real Impact of Network Neutrality

Network_neutrality_poster_symbolThe federal appeals court for Washington DC just upheld the FCC’s net neutrality order in its entirety. There was a lot of speculation that the court might pick and choose among the order’s many different sections or that they might like the order but dislike some of the procedural aspects of reaching the order. And while there was one dissenting option, the court accepted the whole FCC order, without change.

There will be a lot of articles telling you in detail what the court said. But I thought this might be a good time to pause and look to see what net neutrality has meant so far and how it has impacted customers and ISPs.

ISP Investments. Probably the biggest threat we heard from the ISPs is that the net neutrality order would squelch investment in broadband. But it’s hard to see that it’s done so. It’s been clear for years that AT&T and Verizon are looking for ways to walk away from the more costly parts of their copper networks. But Verizon is now building FiOS in Boston after many years of no new fiber construction. And while few believe that AT&T is spending as much money on fiber as they are claiming, they are telling the world that they will be building a lot more fiber. And other large ISPs like CenturyLink are building new fiber at a breakneck pace.

We also see all of the big cable companies talking about their upgrades to DOCSIS 3.1. Earlier this year the CEO of Comcast was asked at the INTX show in Boston where the company had curtailed capital spending and he couldn’t cite an example. Finally, I see small telcos and coops building as much fiber as they can get funded all over the country. So it doesn’t seem like net neutrality has had any negative impact on fiber investments.

Privacy. The FCC has started to pull the ISPs under the same privacy rules for broadband that have been in place for telephone for years. The ISPs obviously don’t like this, but consumers seem to be largely in favor of requiring an ISP to ask for permission before marketing to you or selling your information to others.

The FCC is also now looking at restricting the ways that ISPs can use the data gathered from customers from web activity for marketing purposes.

Data Caps. The FCC has not explicitly made any rulings against data caps, but they’ve made it clear that they don’t like them. This threat (along with a flood of consumer complaints at the FCC) seems to have been enough to get Comcast to raise its data caps from 300 GB per month to 1 TB. It appears that AT&T is now enforcing its data caps and we’ll have to see if the FCC is going to use Title II authority to control the practice. It will be really interesting if the FCC tackles wireless data caps. It has to an embarrassment for them that the wireless carriers have been able to sell some of the most expensive broadband in the world under their watch.

Content Bundling and Restrictions. Just as the net neutrality rules were passed there were all sorts of rumors of ISPs making deals with companies like Facebook to bundle their content with broadband in ways that would have given those companies priority access to customers. That practice quickly disappeared from the landline broadband business, but there are still several cases of providers using zero-rating to give their own content priority over other content. My guess is that this court ruling is going to give the FCC the justification to go after such practices.

It’s almost certain that the big ISPs will appeal this ruling to the Supreme Court. But an appeal of a positive appeal ruling is a hard thing to win and the Supreme Court would have to decide that the appeals court of Washington DC made a major error in its findings before they would even accept the case, let alone overturn the ruling. I think the court victory gives the FCC the go-ahead to fully implement the net neutrality order.

 

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