The Net Neutrality Ruling: Four Points to Know

A quick primer on the ruling’s impact on online business.

In February, the Federal Communications Commission (FCC) voted 3-2 to reclassify internet service providers (ISPs) such as Comcast and Verizon as telecommunications companies rather than information services firms. The ultimate goal of the ruling is to legally enforce what’s called “net neutrality.”

As noted here before, the idea behind net neutrality is simple: ISPs and the government should treat all web traffic (data) equally. The FCC’s ruling officially prohibits blocking or slowing internet data or creating privileged “fast lanes” for high-volume sites.

But the still-ongoing debate about net neutrality involves arcane legal definitions about broadband service. And until the new rules are officially published, much remains unclear. Those rules will take effect 60 days after they appear in the Federal Register. Until then, here’s a quick look at what the FCC’s ruling might mean for internet-based connectivity — and why that ruling isn’t the last word on net neutrality.

1. Arguments for the Ruling

Defenders of the ruling argue that the internet is indeed a public utility, like telephone and electricity service. Why? People are using it not just for entertainment, news and commercial transactions. Railroads, airlines, trucking companies and maritime shipping firms depend on digital connectivity to organize and optimize their loads for greater efficiency. And with the rise of telemedicine and machine-to-machine technology, online communication has become a crucial way for healthcare providers to manage their patients’ illnesses and for manufacturers to run their plants.

2. Arguments Against

Those opposed to the ruling say it’s a solution in search of a problem — consumers haven’t noticed any blocking or speeding up. They also fear government regulation will clamp down on the kinds of innovation that only for-profit businesses can deliver. Besides, about half of all internet traffic comes from just 30 companies, including Google, Facebook, Netflix and Amazon. Why not charge high-volume users more?

3. What Could Change

In the short term, internet users probably won’t see much of a difference. But the new rules could open the door to new competition. They could make it easier, for instance, for Google to access existing telecommunication company poles to bring its high-speed Google Fiber to new markets. They could help small businesses and online entrepreneurs by ensuring a level digital playing field. The new rules could also smooth the way for municipalities to set up their own broadband systems. That could be a boon for rural areas, where for-profit ISPs have been reluctant to offer high-speed service, thanks to the relatively high cost and low volume.

4. What’s Next

Those pro and con arguments are good to keep in mind because the FCC ruling hasn’t settled the net neutrality issue once and for all. Large and small ISPs have suggested that they’ll sue. Congress also could vote to overturn the ruling, though it’s unlikely it can override a presidential veto. What’s more, new government policies sometimes have unintended consequences. Long term, there will probably be more rulings and more legislation.

One thing is certain, however: Thanks to the internet, business and commerce have grown more interconnected. The FCC’s ruling underlines how crucial it is that digital connectivity be strengthened — for everyone.

Tell Us Your Opinion

Will net neutrality affect your business or industry?

Comments

  1. This seems like government trying to take more control of our lives and more taxation or fees are coming our way. It's not needed.

    Ed May 26, 2015
  2. Yes connectivity is very important to conduct business now a days. Specially for small business that do not have crazy money like big corporation to have exclusivity on faster exposure on the web.

    Idalia Fortier May 26, 2015
  3. Your "what could change" section says nothing about the negative consequences for investment and consumer prices that will come with ending two-decades of hands-off, free-market policy and moving to pervasive government regulation and taxation of the Internet. Are you working for the Obama White House?

    Fight back! http://action.americancommitment.org/16401/congress-must-stop-fcc-power-grab/

    Phil Kerpen May 29, 2015

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