Content Marketing

A Net Without Net Neutrality

DylanGessnerHeadshot Dylan manages PulsePoint’s US publisher business development efforts across the companies display, video and mobile inventory. He also works closely with PulsePoint’s internal product and data science teams to develop and implement new revenue maximizing publisher programs.

Netizens remain outraged following a recent district court ruling that struck down the Federal Communications Commission’s ability to enforce its Open Internet rules. But it may be that the so-called defeat of net neutrality—regulations that prevent Internet Service Providers (ISPs) from prioritizing the allocation of broadband usage— is a bit overstated.  Because the FCC failed to properly classify ISPs as common carriers, the door has been left open for the FCC to make a better case as to why ISPs should be regulated like phone companies.

The court left the FCC with the ability to regulate broadband providers and the chance to implement formal common carrier standards on ISPs, though the FCC is likely to appeal the ruling. Essentially, net neutrality may be gone for now but could return in the future.

In consideration of the recent announcement of the merge between Comcast and Time Warner, if all content delivery is not treated equal, there’s nothing in place to prevent either from favoring requests of properties they already own over competitors.

The FCC’s current power requiring ISPs to disclose how they manage traffic across their networks is still being upheld.  So what does the merge of Comcast and Time Warner mean in terms of preventing users from accessing websites that were once considered a competitor?  The ISP would have to be forthcoming about such a practice.  This could ultimately hurt the ISP’s subscription base, as users could leave in favor of an ISP with no record of traffic discrimination.

An Internet without net neutrality allows ISPs to charge premiums for bandwidth/data usage, causing two potential problems for publishers:

  • It imposes higher operating costs on publishers.  Those costs would likely be passed down to their customers and advertisers, who already contribute to the cost of producing content.
  • Publishers who could not afford the premiums would have their content delivered slower, causing poor user experience, cutting   down on traffic and, ultimately, effecting business.

It appears that content creators and their customers, as well as advertisers, would be most negatively affected.  Advertising dollars would need to be increased and aligned with publishers who could afford to pay bandwidth premiums, since they would likely pass that cost to advertisers. In turn, the number of publishers an advertiser could work with would diminish. On the same note, higher bandwidth costs could be imposed on advertisers who maintain their own content pages or e-marketing platforms, thus decreasing their marketing budgets.  Overall ad budgets could potentially be stymied, adversely affecting publishers. The consumer is likely to be hit with the cost in the form of higher priced services.

In light of all of this, it still remains entirely possible for an Internet without net neutrality to benefit consumers.  ISPs could decide to charge premiums on media companies, rather than households, to deliver their content quickly and at scale.  Though smaller providers may not be able to afford this, media companies able to incur the higher usage rates would likely pass on the cost to their advertisers.  Ultimately the end-user will be able to stream HBO or Netflix faster than ever at no extra cost.

The current Internet leaves the lines between consumers, publishers and advertisers increasingly blurred, and it seems few stand to gain from the absence of net neutrality.  If the FCC seizes the opportunity given to them by judges, the foreseeable problems could be prevented.

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