Hurting net neutrality will harm innovation
A lot has been said in past months and weeks about net neutrality, a topic that has resurfaced due to the potential reversal of Obama era rules from 2015.
For a while, leading into last week’s day of protest, it seemed that almost every major internet based business or website encouraged users and visitors to send their comments to Congress and the FCC, or donate a dollar (or more) to defend net neutrality. According to this update, more than 125,000 websites, internet users, and organizations participated in this massive online protest, more than 2 million comments were sent, and 5 million emails are on route to the FCC and members of congress.
A lot of the discourse goes as far as describing the erosion of FCC’s regulatory power and its ability to apply current legislation as something equivalent to a direct threat to freedom of expression. At this time it appears chances are slim that the protest made a dent in the momentum to gut net neutrality regulations.
Disclaimer — I previously worked for a major Canadian telecommunication provider and may have drunk some of the Kool-Aid so please don’t hold the following against me.…
The telcos (and cablecos) make somewhat logical arguments regarding unfairness when internet based Goliath's such as Facebook, Google (inc. YouTube), Netflix, and others benefit greatly from internet transport infrastructure they have not contributed to building. They make the case that when “over-the-top” content providers (as they are routinely referred to) draw in large enough revenue, an appropriate amount of that profit needs to go into the infrastructure that enables such a lucrative business model. According to this 2016 report from Sandvine, Netflix consumes over a third of internet traffic on North American fixed networks, and Amazon’s streaming services are getting up there too.
Much of the focus on net neutrality as an issue is quite naturally given to internet use cases that have already made dramatic changes to established industries, and coincidentally where telecommunication providers have pretty much lost or loosing the battle — specifically to streaming media and VoIP.
For the most part, streaming of on demand entertainment content such as video and music have already resulted in intensified “cord cutting,” apparently half a million Americans did exactly that in the first quarter of this year.
On the VoIP front, increased adoption of communications services such as Skype, WhatsApp, Facebook Messenger, and FaceTime (and a slew of others) have greatly eroded the margin-rich revenues carriers used to enjoy from long distance calling, text messaging, and roaming fees.
While any degradation of network speeds will result with excessive buffering and an overall inferior experience to what we have all been accustomed to, I would argue that those particular services (streaming media and VoIP), because of their popularity, are at much lesser risk from the erosion of net neutrality. Customers simply won’t stand for it.
So who will suffer the most from the impending weakening of related legislation and the potential second grade service quality? It will be the new companies, the unborn startups or early stage companies that are leveraging the power and pervasiveness of the Internet to innovate and present alternatives to the status quo across industries. Whether it’s the disruptive nature of Blockchain technology, the increased ubiquity of internet connected devices (otherwise known as IoT), or the immense potential Artificial Intelligence offers across applications, these are all facing a real and present danger should we see a reversal of net neutrality.
Our company develops connected home solutions (commonly referred to as “smart home”) and operates in the intersection of various technologies, namely consumer IoT and machine learning, both areas experiencing accelerated interest and innovation. Our solutions depend on and leverage the Internet’s multiple facets (cloud services, smartphone apps among other forms) to provide homeowners with anytime-anywhere insights and control of their home and delivers them comfort and peace of mind regarding their families and personal property. Consumers adopting connected home technology expect uninterrupted and immediate notifications as well as instantaneous control of devices, from any time and any place.
Subjecting smart home applications to an inferior grade of internet is unthinkable, and will be detrimental to much needed progress to support a variety applications society can benefit from — things like allowing aging people to stay in their homes longer before moving to eldercare, increasing home safety for a greater proportion of families by making it more affordable, making home insurance premiums fairer for families that take better care of their property and safety, and reducing the environmental impact of residential electricity used for wasteful heating and cooling to name a few.
I will conclude with this strongly written opinion piece that illustrates how the large US telecom and broadband providers are using different tactics and arguments to allegedly mask their true intentions of gutting current regulation. If successful, providers will be given more power to charge premiums from both consumers and content providers by monetizing premium internet lane-ways. This may also help them curb “cord cutting” or even worse, create unfair barriers to a variety of innovative service alternatives that are now impacted by an uneven playing field, and bear in mind that the network providers themselves may opt to enter those industries with a significant and unfair advantage — seeing it as comeuppance for the lost revenues from the aforementioned video and VoIP services. That should be the real concern.
