Net Neutrality: What It Means for Consumers and Innovators

The recent net neutrality ruling is complicated, far reaching, and impacts everyone who uses the Internet. Here’s a summary of the Federal Communications Commission’s (FCC) decision in February and what it means for consumers, innovators, and telecommunication companies.

What was the FCC’s ruling?

The ruling reaffirmed the commission’s authority to regulate broadband Internet access service after an appeal in federal court. In doing so, they acknowledged and classified open Internet as a utility, like water and electricity.

If you’ve ever moved into a house or apartment that didn’t have Internet, you quickly understood how vital to everyday life having home Internet is. The prevailing argument basically says that as things in society turn into essential commodities, like working plumbing and electricity, we have to protect them in a special way. This is why most cities handle water billing, and electric billing is regulated territorially.

What does net neutrality mean?

We now know the Internet will remain neutral and open for the foreseeable future. But what’s that really mean? Here’s a quick scenario to demonstrate what it means to you. Comcast is an Internet service provider (ISP), and they have two customers. They bill the business transmitting the data (Netflix), and the end user (you). Without the rules in place, Comcast could effectively tax Netflix extra for higher-speed streaming. This means Netflix is forced pay them more based on data, or the data streaming speed will be throttled down. Naturally, Netflix has to pass the cost onto the consumer and charge you more.

Ultimately, those who can’t afford the “fast lane” pricing miss out on having functional connection speed. They don’t use Netflix anymore because their slow speed won’t load fast enough to watch, forcing them to watch more cable television that the same ISP also provides, at a price.

Why should entrepreneurs care?

This decision has a far deeper impact for entrepreneurs and innovators. Say you’re a tech startup with a great product that uses data streaming to reach your consumer. Without the open internet, your startups would have to pay incremental costs at every point as they scale and grow. Obviously, this would stifle innovation and slow growth for small businesses all across the country.

It’s not hard to see why this topic garnered severe polarity between big telecom companies and entrepreneurs. Acknowledging the fiscal motives of large public corporations, you can’t really blame them for lobbying against net neutrality. To them, these rules represent red tape standing between them and a revenue source. But the FCC isn’t here to bolster specific company’s profits; they’re here to protect citizens as communicators, whether it’s via radio, television, or Internet. They are charged with encouraging competition and keeping regulations up to date so new technology can flourish alongside established corporations.

So binge stream, binge watch, and download in peace; but don’t forget to say a quick thanks to the FCC for this one!

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