This industry viewpoint was authored by Ajit Gupta, Founder, President and CEO of Aryaka
Reports that the FCC is considering new norms that would significantly affect net neutrality in the US have sparked a raging debate on how such regulations could ever even be put on the table at all.
Think of it this way – what if the 100 meters race at the Olympics was to be run with Usain Bolt given a wide, pebble free lane all to himself, while all the other runners were stuffed into a constricted lane with barely enough space to put a foot forward?
Would there ever be anyone else vying for the gold?
Now imagine the same thing happening to you on the Internet, while that large competitor goes ahead and serves up content on a platter to consumers. If your content cannot reach consumers, what is the point of having good content at all? Net neutrality is the principle that has, so far, prevented this from being a reality on the Internet – making the Internet the great level playing field, where everyone from the 10-man startup to the multiple thousand employee big guns gets the same features and accessibility.
Net neutrality essentially states that ISPs cannot discriminate among content providers when it passes over their network, no matter what the type or source of the content is. The end result is that startups, large enterprises, and even individual bloggers can provide customers with content on a level playing field.
The proposal set out by the FCC in April defeats this core principle of the Internet, instead allowing ISPs to create a fast lane for companies that can afford to pay. These companies will enjoy a faster, enhanced service, making it difficult for smaller rivals to compete.
Studies have shown that page loading delays cost businesses customers. For e-commerce sites, slow web loading times directly impact that bottom line. Tests run by Amazon found that for every additional 100 ms in load time, sales dropped by 1 percent. Similarly, Google has found that a 0.5 second increase in load time reduces traffic and ad revenues by 20 percent.
All of this reinforces the findings of Zona Research, which studied load times back at the dawn of the e-commerce age in 1999. Zona Research found that you’ll lose one third of your visitors if your site takes more than 8 seconds to load. Today, with broadband penetration so much higher (and with consumers used to speedier load times), those numbers are probably conservative.
Clearly, giving large companies their own fast lane grants them a competitive advantage that they didn’t earn. These companies can now essentially decide what we get to see, while others who would provide alternative content may not be able to reach us at all. Thus, the Internet could well turn into a world dominated by monopolies, who will have an outsized ability to decide how we shop, get our news, and even what sorts of entertainment we’ll be able to access.
Unsurprisingly, everyone from interest groups to large tech companies have vowed to fight this ruling; the FCC’s public comments page lit up with over 45,000 comments from people condemning the move (and this volume was helped along by a story John Oliver ran on his HBO show Last Week Tonight).
Another nail in the coffin for Net Neutrality is the proposed Comcast-TWC merger. If the deal is approved, it would extend the monopolies these firms hold in their dominant territories across the U.S. Even if Net Neutrality is upheld and monopoly mergers are rejected, don’t be surprised if fast lanes emerge anyway. As broadband access become a commodity service, the next big cash cow for network providers is premium services. For instance, look at how Comcast dealt with Netflix, demanding hefty premiums for timely service. From the outside, Netflix’s agreement with Comcast in February looks a lot like they caved into extortion. Before the deal was struck, Netflix subscribers trying to access the service via Comcast saw massive drops in access speeds. Netflix gave in, since slow access is fatal for them, and now their subscribers get their content quickly.
Comcast is essentially putting up tollbooths on the Internet. With our regulatory agencies being hesitant to take on monopolies, you should expect more of this type of behavior in the future. In many ways, the public Internet is still like the Wild West, and many large telcos want to create what are essentially company towns. Anything you buy, you have to buy from them.
Fortunately, not everyone is buckling to the monopolies. Alternatives to the monopolies exist, and businesses must look beyond the public Internet for content delivery now. The emergence of cloud-based content delivery services gives businesses a low-cost alternative to monopolies.
Solutions that can provide an independent, affordable private delivery network that route you around typical congestion on the public Internet are the only truly future-safe options for enterprises because depending on the Internet for communication is a very risky option.
Businesses have three choices now to guarantee excellent service for their end users: 1) roll the dice and take their chances with the public Internet, 2) cave into the monopolies and pay whatever they’re requiring, or 3) regain control of content delivery with structured Internet-independent options (which are admittedly still evolving, but do exist.)
Businesses must count on more than Net Neutrality to protect themselves and their subscribers. They must also find partners and service providers who will help remove obstacles to serving their customers. This may take some research, but the benefits that enterprise can gain and the security of continued excellent access for customers in the future would make the effort well worth it.
For years, the public Internet has been a force that disrupts monopolies. The monopolies are now fighting back. You can wait to see how the dust settles, or you can act now – and better serve your customers in the process. One thing is for certain – with the low barriers to entry for most service providers today, when your service suffers, you customers will move.
The question is, can you afford to lose them?
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Categories: Content Distribution · Government Regulations · Industry Viewpoint · Internet Traffic
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Well said Ajit!
1) Net Neutrality is not about peering, it’s about last mile prioritization (or rather, the lack thereof). This remains true even after Reed Hastings’ attempt to conflate the two.
2) Comcast-Netflix is more about Comcast opportunistically applying the same principles of balanced traffic ratios to Cogent that transit providers (ok, Level3) applied to Comcast for years.
3) Netflix chose a transit provider who seemingly failed to incorporate all of the costs of delivering their customer’s growing traffic into their business model. Cogent could have added capacity to alleviate the issue, but doing so would have broken their business model (which relied on settlement-free peering).
4) Netflix eventually found it beneficial to bypass said transit provider (at a *savings*, not a “hefty premium”), and afterward attempted to co-opt Net Neutrality concerns by arguing that the cost of delivering content to their customers should be borne by ISP subscribers in aggregate, whether Netflix subscribers or not (or frankly, anyone else, except of course them).
5) For years, the Internet has relied on infrastructure investments made by monopolies. The true cost of that infrastructure is becoming increasingly obvious as no newcomers are significantly entering the last mile business despite a more welcoming attitude by local regulators than ever (ahem, changing the name of the town?)