With a 3 - 2 vote splitting neatly along political party lines, as expected, the Federal Communications Commission (FCC) yesterday struck down the controversial net neutrality regulations enacted just two years ago by the previous administration. It’s the happy outcome mobile operators and cable companies were hoping for, since it now frees them to completely control the flow of content to end users, and it’s the sharp blow that mobile content providers and advertisers were hoping to evade. Without the assurance of net neutrality, they fear stunted growth, barriers to new markets, and higher advertising rates. The bleak future that internet marketers and consumers warned against is now upon us.
Net neutrality regulations were enacted in 2015 to prevent dominant telecom operators like AT&T, Comcast, and Verizon from speeding up sites and apps that boosted their own profits, while slowing down or blocking competing sites and apps. All web traffic would be treated equally, and operators would not be allowed to abuse their power as gateways to the internet. It upheld the longstanding tradition of equal internet access for all, and had the support of major tech names like Facebook, Google, and Netflix. A new day dawned with the coming of a new administration, however. With the anti-regulation faction now the majority, the newly-reconfigured FCC saw no need for such government controls. FCC Chairman Ajit Pai called them “heavy-handed regulations,” and shamed the prior government for “micromanaging the internet.”
So what does the fall of net neutrality really mean for mobile content providers and advertisers?
Some industry experts have predicted that mobile content providers will have to compete harder now to get their content delivered and ensure quality service for their mobile subscribers. Businesses may have to find new ways to develop mobile apps as well, making them less data-intensive and changing their hosting practices to get more local. And now that optimizing traffic is no longer equally possible for all, and will come at a price,
content delivery network (CDN) providers will need to factor in costs as never before.
On the digital advertising side, the
availability of ad space will be significantly reduced. Mobile carriers will favor the big networks with the deepest pockets, and will sell their ads via their own content. As a result, the price of ads will go up, keeping smaller advertisers from playing on the same field. With the rise of “fast lanes,” advertisers will have to pay for the privilege of using those lanes. The largest providers also have the resources to pay for the advantage of zero-cap lanes, so their services can be delivered without increasing the mobile user’s monthly download cap - putting smaller companies with more limited resources at a painful disadvantage.
The internet was built on a foundation of fairness and equality for all, from small entrepreneurs to corporate giants. Today the FCC rejected that ethos and tipped the scales far out of balance. Their ruling creates enormous obstacles for smaller, rising advertisers and content providers, while ensuring that the rich will indeed get richer. In the spirit of the season, the government regulators have presented a glittering gift to the giants of the online universe, and nothing but a Scrooge-like disregard for everyone else. Which makes one wonder - is a completely open market, absent of regulations, truly open?