#FCCNetNeutrality, A Series of Comments: Part 2
The Economic Impact of the Proposed Internet Rules
This is Part 2 of a series on the May 15th FCC hearing regarding the proprsed Internet rules. Feel free to read Part 1, here.
The idea of net neutrality and its economic impact. How are the proposed rules for the Internet going to affect the economy? Do we care what the outcome of the economy is in terms of the Internet? Are we talking about more revenue and higher profits for ISPs and major Internet companies?
Let’s take this scenario into consideration:
Consumer A streams Netflix every week night from 6pm to Midnight. This consumer uses the internet constantly and is what ISPs consider a heavy user, maybe in the top 10% of users. Consumer B uses the internet to pay bills, and stay connected with news and social media. Consumer B is a light user in terms of ISP standards. What if every light user canceled their service, because they do not agree that they should be paying the same as heavy users? This would in fact have a negative affect on ISPs and the economy. It’s unlikely to happen because it is convenient for us to have Internet access and over time we will continue to be more connected.
It is convenient for major ISPs and Internet firms to bill clients on Internet usage because it will one day lead to heavier profits. For example, when Internet access was introduced to mobile devices, most plans consisted of unlimited Internet access at set rates that did not change based on bandwidth usage. Then, major companies realized that they were giving away too much and loosing on opportunities to gain more profits. What was the conclusion, the end of unlimited Internet at set bandwidth rates.
This is what major ISPs have in mind for the future of their services. They want to find more ways of raising their bottom line. They want to charge for heavy bandwidth usage. Whether the consumer pays, or the online service that takes up heavy bandwidth pays, is still up in the air. More revenue and higher profits are better for the economy. In the end, the positive economic impact of this outcome could negatively affect consumer’s pockets.
When the idea of the proposed internet rules affecting the economy comes up, I see it as the government protecting the bottom line of major companies. It makes me think of changes in business profits and revenue, not what is best for the consumers. I hope that this is the other way around. I hope that by economic impact, FCC representatives are going to be making sure that the little man and startups have the same opportunities in regards to online access as the big firms. Will not letting the ‘have-nots’ gain access negatively affect US economic growth?
I am no economist, nor do I pretend to know how the economy might fluctuate depending on the outcome of the proposed Internet rules. What I do know is that FCC representatives mentioned ‘economic impact’ many times in the May 15th hearing and it raises red flags for me.
What are your thoughts on the possible economic impact of the new propped Internet rules and what I have written here? Do you think my thoughts on the future of ISPs and internet consumption are off? Feel free to start a conversation with me via Twitter @DavidRiveraToGo.
