Will the FCC Ruin the Internet?

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This week the issue of Internet fast lanes reared its ugly head again with discussion by the FCC of allowing Internet Service Providers (ISPs) like Comcast and Verizon to charge Internet based services like NetFlix, YouTube and Hulu a fee that would allow them broader bandwidth to the consumer connected on the ISP. ISPs claim that movie content services place a heavy bandwidth load on their services and that they should receive compensation for that heavy load. You can check it out on cnn.com.

Under the banner of a free Internet, the opponents claim it will stifle innovation on the Internet and make it hard for start up companies that place a heavy bandwidth load on the Internet with their content to be able to pay the new fees.

Ironically, the biggest load on the Internet itself at present is unwanted spam email. Thanks to email filters, most of us are now shielded from this unwelcome content but it does slow down the movement of traffic across the Internet. Digital content flowing across the Internet does not match the spam load. The issue being discussed her focuses not on the load on the Internet but rather the service provided who connects the user to the Internet.

If Netflix is made to pay these fees, you can bet that they will pass the cost onto customers. The company will likely shift to two different service options: DVD only vs. DVD and live streaming. Hulu would have no choice but to raise fees. If forced to pay the fee, I suspect that Facebook will just remove videos from their page content. The biggest problem, however, is for free services like YouTube which survives on its advertising sales.

We could also expect greater differentiation than we currently see in the fees charged by ISPs. Already some small ISPs in the U.S. charge customers for how much bandwidth they want and there are some very cheap low bandwidth ISPs that are awful for watching online movies. We can expect that even broadband services will begin to charge higher premiums to those of us who use lots of bandwidth. Curiously enough, Australian ISPS do not charge for different levels of bandwidth but limit how much content can been received per month without additional charges.

Much of what is happening seems to be a result of pressure from the big ISP’s (Comcast/Xfinity and Verizon). This debate is not being driven by consumers complaining about the quality of their service. The question the FCC really needs to ponder is what is in the best interest of American and, for that matter, world Internet users. While the FCC once saw one of its role as protecting the interests of broadcast stations, the role of protector of ISP’s disturbs me as a further manifestation of how big business influences our government.

One thought on “Will the FCC Ruin the Internet?

  1. I believe that if the FCC were to enforce such a rule that makes companies pay more for a larger bandwidth, consumer choice would be limited greatly. Dr. Day is very accurate when saying that these rises in costs for big businesses would be pasted down to the consumer. New startups with little bandwidth would be forced to come out of the gate with high prices that would most likely turn away any user interested in this new service. Dr. Day also brings up the valid point that this raise in cost would also limit consumer choice as with his Netflix example of “DVD only” vs. a “streaming only” plan. I hope that the FCC does not follow through with this plan to raise the cost of bandwidth because in the end, it does nothing but limit the consumer’s options and cost the consumer a higher amount of money for what is currently a reasonably priced service.

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