TedPage: Net change

Recently the FCC voted down the previously held rules on net neutrality. I think that this is a bad decision by the FCC, but I don’t think that it will result in the amount of chaos that some people are suggesting. I thought I’d write about how I see the net changing, for better or worse, with these regulations removed.

If we think about how the Internet is today, basically everyone pays to access the network individually. Both groups that want to host information and people who want to access those sites. Everyone pays a fee for ‘their connection’ which contributes to companies that create and connect the backbone together. An Internet connection by itself has very little value, but it is the definition of a “network effect”, because everyone is on the Internet it has value for you to connect there as well. Some services you connect to use a lot of your home Internet connection, and some of them charge different rates for it. Independent of how much they use or charge you, your ISP isn’t involved in any meaningful way. The key change here is that now your ISP will be associated with the services that you use.

Let’s talk about a theoretical video streaming service that charged for their video service. Before they’d charge something like $10 a month for licensing and their hosting costs. Now they’re going to end up paying an access fee to get to consumer’s Internet connections, so their charges are going to change. They end up charging $20 a month and giving $10 of that to the ISPs of their customers. In the end consumers will end up paying for their Internet connection just as much, but it’d be bundled into other services they’re buying on the Internet. ISPs love this because suddenly they’re not the ones charging too much, they’re out of the billing here. They could even possibly charge less (free?) for home Internet access as it’d be subsidized by the services you use.

Better connections

I think that it is quite possible that this could result in better Internet connections for a large number of households. Today those households have mediocre connectivity, and they can complain about it, but for the most part ISPs don’t care about a few individuals complaints. What could change is that when a large company is paying millions of dollars in access fees is complaining, they might start listening.

The ISPs are supporting the removal of Net Neutrality regulations to get money from the services on the Internet. I don’t think that they realize that with that money will come an obligation to perform to those service’s requirements. Most of those services are more customer focused than ISPs are, which is likely to cause a culture shock once they hold weight with their management. I think it is likely ISPs will come to regret not supporting net neutrality.

Expensive hosting for independent and smaller providers

It is possible for large services on the Internet to negotiate contracts with large ISPs and make everything generally work out so that most consumers don’t notice. There is then a reasonable question on how providers that are too small to negotiate a contract play in this environment. I think it is likely that the hosting providers will fill in this gap with different plans that match a level of connectivity. You’ll end up with more versions of that “small” instance, some with consumer bandwidth built-in to the cost and others without. There may also be mirroring services like CDNs that have group negotiated rates with various ISPs. The end result is that hosting will get more expensive for small businesses.

The bundling of bandwidth is also likely to shake up the cloud hosting business. While folks like Amazon and Google have been able to dominate costs through massive datacenter buys, suddenly that isn’t the only factor. It seems likely the large ISPs will build public clouds of their own as they can compete by playing funny-money with the bandwidth charges.

Increased hosting costs will hurt large non-profits the most, folks like Wikipedia and The Internet Archive. They already have a large amount of their budget tied up in hosting and increasing that is going to make their finances difficult. Ideally ISPs and other Internet companies would help by donating to these amazing projects, but that’s probably too optimistic. We’ll need individuals to make up this gap. These organizations could be the real victims of not having net neutrality.

Digital Divide

A potential gain would be that, if ISPs are getting most of the money from services, the actual connections could become very cheap. There would then be potential for more lower-income families to get access to the Internet as a whole. While this is possible, the likelihood would be that only families in regions that have customers the end-services themselves want. It will help those who are near an affluent area, not everyone. It seems that there is some potential for gain, but I don’t believe it will end up being a large impact.

What can I do?

If you’re a consumer, there’s probably not a lot, you’re along for the ride. You can contact your representatives, and if this is a world that you don’t like the sound of, ask them to change it. Laws are a social contract for how our society works, make sure they’re a contract you want to be part of.

As a developer of a web service you can make sure that your deployment is able to work on multi-cloud type setups. You’re probably going to end up going from multi-cloud to a whole-lotta-cloud as each has bandwidth deals your business is interested in. Also, make sure you can isolate which parts need the bandwidth and which don’t as that may become more important moving forward.