Note: this is an edit of a post I first published the last time net neutrality was under threat, in 2014. New comments are in blue. Even if you’ve never wanted to contact your lawmakers, ever, in your life, if you own a business, work for one, or spend any time online, you should call your representatives right now and tell them that net neutrality is critical to the financial health of…everyone you have ever met. H.J. Res 86 deals only with privacy of customer data, a different issue than raised in 2014. But since the new FCC Chairman, Ajit Pai, has said that he wants to correct the 2014 net neutrality “mistake”, it’s critical to understand the full impact of losing net neutrality.
I could make a lot of money off the end of net neutrality. If we lose it, having a content-rich website will become so expensive that clients will start asking me to strip their sites of all but the basics. Abundant product images and engaging content — gone. Video — gone. Interactivity — gone. Online manuals, training, and sales demos — gone. Robust internet transfer of large client files — gone. Speedy forms and online chat — gone. Cloud storage — gone. Responsive mobile access so your clients can us your site from their phones and tablets — gone.
Without net neutrality to protect them, the vast majority of business websites will have to be plain, spare, and quick to download. Businesses will have to party like it’s 1999 and everyone has dial-up. Web hosting that now costs less than $200 per year could potentially costs thousands of dollars per month, and it will be cheaper for my clients to pay me to take it all down and go back to mailing things.
But I don’t want to make money that way. It feels too much like building coffins. I’d rather help my clients finish climbing out of the recession, so that I can finish climbing out of the recession. In net neutrality — in this one thing — small and medium businesses have a level playing field, and it’s about to be taken away.
What Net Neutrality Is, and Isn’t: The No-Jargon Explanation
Part 1: Your stuff. If you have a website, you pay a fee for hosting it. The hosting company keeps your site on a hard drive in a metal box called a server. The host’s job is to keep that server functioning and connected to the Internet. We will call your hosting company Teddy’s Hosting, because Teddy is the name of my brother’s dog. (Teddy is also the name of his brother-in-law, a coincidence that has never been adequately explained to me.)
Part 2: How prospects and customers can see your stuff. But the people who visit your website — your customers — don’t use Teddy’s Hosting to connect to the Internet. They use an internet service provider, or ISP, to get online. Usually that’s a cable company; the five largest in the U.S. are Comcast, Time Warner, Cox, Charter, and AT&T. You pay for your end and your site visitors pay for theirs. In the U.S., all this is tied together via an infrastructure that is paid for, in part, by the federal government.
Part 3: How net neutrality allows both ends of the equation to work together. Until now, one of the rules for using all that infrastructure is that cable companies and other ISPs have to treat all web traffic equally. They can’t slow down your website and speed up your competitor’s. Parental controls aside, they can’t show videos on some websites and block others. They can’t decide to favor some customers and snub others. Most important, they can’t charge you fees depending on what kinds of content you have on your website. That’s net neutrality.
Without net neutrality, all those cable providers instantly gain the ability to charge you money to deliver their content. As much as they want. Forever…
…or at least until so many companies go out of business that the cable providers no longer have enough paying customers to support their business model. And it could get to that.
Part 4, 2017: How net neutrality affects customer confidence. Without exception, all of our clients’ websites include privacy policies. They are pretty similar, and we and our clients take them seriously: the clients promise not to sell or share information except as spelled out in the company’s policy. There’s contact information if the customer has a concern or problem, clear instructions for opting out of communications, and alternative ways to communicate (for example, a phone number) if the customer doesn’t want to share information online.
Living up to those policies is important, because we’re asking customers to trust us. You share information with us — what products you need, for example — and we use that information to help you get what you want. If we violate that trust, you won’t come back, and pretty soon the business fails.
If broadband providers and others are allowed to gather and share information with impunity, and without informing or asking permission of users — which is what H.J. Res 86 says — that trust is broken for the entire Internet. The privacy policies that help engender trust and build consumer confidence no longer have teeth.
NOW for the scary stuff. Here’s the net neutrality “mistake” that the trump administration wants to correct: ISPs would be allowed to charge for what is called “the last mile”. Here’s how it works.
Let’s pretend that there was something called Trucking Neutrality. You have your own fleet of trucks that you use to deliver products to customers. You use those trucks on public roads, and with Trucking Neutrality in place, nobody can stop you from delivering those products to your customers at their homes or places of business.
Now imagine that Trucking Neutrality is replaced by a system in which the distance from the street to the front door is managed by FedEx, UPS, or DHL. Even though the customer who lives or works at that address pays one of those companies to get the products from the curb to the door, FedEx, UPS, and DHL can still charge you, too. They can charge you more for big packages than for little ones, or add a fee for oddly-shaped packages. They can charge you more for frequent deliveries, or for deliveries at busy times of day. If you don’t ante up, they can deliver all your competitors’ packages ahead of yours, or refuse to deliver them at all.
You have to pay those fees for every one of your customers, no matter who they have as their “last mile” provider. So you’ll pay multiple companies every time you send a driver out on a delivery route. You’ll have no choice in the matter, and no way to control or predict your costs, unless you want to turn away business from customers with expensive services.
The minute net neutrality is gone, this is exactly what cable companies will be allowed to do.*
- They will be allowed to charge you a premium to deliver your website that last mile, to the computer or mobile device of the person trying to look at it.
- They can decide to charge you a fortune for streaming video at all, or at reasonable speed.
- They can have have you bid against your competitors to see who’s willing to pay the most for online shopping carts or customer service chat.
- They can make deals with your biggest competitors to speed their sites up and slow yours to a crawl during key shopping times or seasons.
- If you have prospects or customers nationwide, you could potentially have to manage relationships and payments to more than 75 different service providers.
And it will all be legal.
Nobody smart enough to run a business, or work in one, needs me to explain how devastating this could be.
But since Congress seems slow on the uptake, I’ll take a stab at it anyway. First to go will be smallest businesses, killed because they simply can’t afford the fees, and thus can’t compete on the Internet. Then it will be the mid-sized ones, as the largest corporations outbid them for last-mile bandwidth with waterfalls of money.
The big companies will soon be in trouble, too, for two reasons. First, because too many people will be out of work from the SMB die-offs to continue to buy stuff. Second, because public corporations are too tied to quarterly results and stock prices to take the long-term risks necessary to innovate. In essence, the big companies will kill off their customers and their farm teams.
By then the cable companies will be dying, too, having eaten their young. (FCC Chairman Tom Wheeler, unanimously approved by the Senate last year, used to be a cable industry lobbyist. You’d think he’d be doing a better job of looking out for their long-term interests.)
After that? I imagine that in the far-off reaches of Oregon, after the net-neutrality Apocalypse, some brave new incarnation of Tim Burners-Lee will found a new Internet. He’ll send Kevin Costner off on his horse, Cisco, to ride from ragged settlement to downtrodden village, dragging optical cable behind him.
*In a recent revision of the plan currently before the FCC, cable companies have promised that they will not do some of these things. Specifically, they have said that while they will allow some websites that pay a premium to become faster, they will not allow any to become slower. Slower than what, they don’t say, but presumably it’s the current baseline.
*Leaving aside the dazzling chasm of excavated logic that this argument requires (“I’m not going to give you fewer cookies, darling; I’m just going to give your sister more”), providers have already been slowing service for more than a year, as this David Auerbach article in Slate describes.
That grinding-to-a-halt feeling you’ve been experiencing? Without net neutrality, welcome to the new normal.