As we have entered a bright, shiny new year, 2015 has us looking forward with hope and wonder about what BIG events will alter our futures the most. I’ve been thinking (and hoping) for quite a while that the most influential technology and business event of 2015 will be the solution of the Net Neutrality conundrum. I inserted “hope” above because I don’t think it’s going to resolve itself anytime soon, but there is a huge amount of success or failure relying on a resolution.
Part of the problem is the confusion about whose responsibility it should be in the first place. I don’t even claim to know all of the intricacies, so forgive me if I come across as naive in trying to simplify. There are certainly many (like Nick Castelli) who have different takes and do decent jobs of laying out what’s at stake. You can always do more research and come back to straighten me out…
To me, one of the main issues stems from the following:
In the United States, laws were set in place that – when telecom companies laid down cable, fiber, networks, infrastructure, they need to allow other companies to make use of their infrastructure. The companies using the infrastructure may be paying to use the pipes, but it was found to not fully cover their part of the costs – especially when they are able to offer services utilizing those infrastructures at a lesser cost than what the bigger companies paid to have them laid in the first place. What happens is that any incentive to upgrade services is diminished because competitors can utilize those very same upgrades almost immediately with no capital expenditure. Because of this, you can find areas in major metropolitan cities who don’t have fiber network access and, therefore, slower connections than individuals or businesses residing just blocks away.
On the other side, we consumers don’t want to pay more to get the things we feel we’re entitled to. As has proven lately, this is great when there is an entity willing to foot the bill (i.e. advertising supported) but not so good when the financial support dwindles so as to be inconsequential. This leaves entities searching for other forms of revenue – whether it be only providing content by subscriptions or fees.
Companies are jumping into the fray from left and right to serve the needs of the public and businesses via the internet – with huge distribution expenses offset by existing infrastructures. The concern is, the longer the lack of clarity continues, we’ll be seeing more executives like Reed Hastings of Netflix paying ISPs for a perceived fast-lane from one hand while lamenting the position ISPs are putting us in on the other. The confusion leads to many disjointed decisions that look to solve current issues (fleeting as they may be) and, perhaps, setting bad precedent for the future.
Ultimately, the question of Net Neutrality is much broader than who raises prices and who gets stuck with the bill.
Going to the basics of broadband, there have been studies on the effects of faster internet connections on the GDP, education and society. In 2013, Ericsson published a study with Chalmers University of Technology and the Arthur D. Little organization that pointed to a direct growth in GDP of 0.3% based on the doubling of broadband speeds between 2008 and 2011. Beyond the growth in GDP, there were other bumps that benefited society in ways that are harder to quantify.