The US government’s recent move to end the Federal Communication Commission’s (FCC) net neutrality protections has sparked a massive global debate on the issue and what it means for businesses. While nearly all of Europe does have net neutrality protections, Australia doesn’t, and hasn’t suffered any apparent extreme effects as a result. So why is it such a big issue?

Use invoice finance - What the end of US net neutrality means for business

As the country with the third most Internet users in the world after China and India, and by far the most in the anglosphere, US policy has a major impact on the rest of the world in terms of its influence, as well as its direct effect on the flow of web traffic. Net neutrality is so contentious for the US because it weighs the potentially enormous benefits of a deregulated Internet against the real risks of corporate abuse and profiteering that could create a new, potentially very tall barrier of entry for new online businesses.

How businesses can benefit

The critical benefit that a loss of net neutrality has is that it gives ISPs and website owners more control. Specifically, it means that the efficacy of a website on any given day isn’t dependent on how crowded traffic is, but rather on how much bandwidth they’ve reserved and paid for.

Ensuring product consistency

By allowing businesses to purchase access to prioritised “fast lanes” online, businesses could greatly improve online products that rely on those steady Internet connections. Websites that stream video content, for example, need a lot of consistent bandwidth in order to provide a quality product. Similarly, some regular websites may suffer from slow loading speeds because of large slow-loading content such as high resolution images, built-in applications, or video content.

Currently, website owners are forced to minimise the use of this type of content to ensure a positive user experience. Being able to prioritise that traffic can change that, and give online businesses the ability to consistently deliver higher quality content that wouldn’t be feasible otherwise.

Improving search rankings

Besides generally offering a better user experience, a website’s loading speeds are also used as a factor in search rankings on Google, Bing, and other search engines. Having slow loading times can lower a website’s rankings and reduce its web traffic as a result. This, as well as the user experience issue, is another major factor in why web developers generally work hard to keep websites compact. In the future, a US business with a slow loading website may simply be able to address the issue by paying to have their site prioritised.

Potential for better and faster growing communications technology

The ability to allocate and sell bandwidth priority is now left to Internet service providers in the US. As a result, those ISPs stand to generate a significant amount of additional revenue. While they’re already reasonably profitable, these additional funds will allow these businesses to invest in far more ambitious and innovative improvements than may have been previously feasible. Depending on the choices made with these resources, it could result in a generally faster and more robust Internet for all.

The risks of a non-neutral Internet

The big issue with granting all this power to ISPs is the fact that decision-making is now left in the hands of just a few businesses in the US, all of whom stand to gain significantly by abusing this power. By prioritising Internet for some, others would naturally (or unnaturally) have their speeds reduced. By some, this is seen as a potential threat to competition, and to smaller, less wealthy businesses.

Throttled service

Critics argue that service providers may well choose to throttle Internet speeds for some websites to the point that search rankings and user experience is affected adversely as a form of extortion. Whether it’s as a result of prioritising higher paying customers, or an explicit move to pressure businesses, this move could easily result in much slower Internet speeds for some websites who don’t participate in the new pay-to-play model.

Anti-competitive effects

Ultimately, proponents of net neutrality argue that powerful businesses could pay off ISPs not only to keep their websites operating at their peak, but explicitly to keep them ahead of any potential competitors. Worse, some ISPs would be tempted by serious conflicts of interests. For example, Comcast, Hulu, and HBO are all owned by Time Warner, who may simply dictate that Comcast should prioritise its partner businesses over any competitors. As a result, competitors simply wouldn’t stand a chance.

As these concerns are being discussed all over the world both in public and private forums, the US government has already begun to look at ways to prevent possible negative outcomes with more limited regulation. As the situation develops, the example set by the US could heavily influence future policies on the issue all over the world. Regardless of the outcome, businesses that rely on the Internet would do well to keep a close eye on any developments.

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