Canada Markets open in 6 hrs 34 mins

The FCC plans to repeal net neutrality this week — and it could ruin the internet

Steve Kovach
ajit pai
  • The FCC will vote to repeal its net neutrality rules on December 14. The outcome is a foregone conclusion.
  • The repeal of the rules likely won't mean broadband providers will block your access to Google or slow Netflix so it's unwatchable. But the move likely will mean the providers will charge internet companies tolls to be able to send their content or services to you.
  • Big companies like Amazon, Google, Facebook, and Netflix will be able to afford those tolls. But smaller internet companies could be boxed out.


It's inevitable — this week, the Federal Communications Commission will drive a stake in net neutrality.

On December 14, the agency will vote to repeal the net neutrality rules it put in place in 2015. With Republicans commissioners who oppose the rules outnumbering Democrats who favor them three to two, the outcome of the vote isn't in any doubt. Your protests and #netneutrality tweets will do nothing — this is really happening.

Assuming the move isn't blocked by the courts or overturned by Congress, it could radically reshape the internet by giving an already powerful group of telecommunications companies a great deal of control over what you can see and do online. It will also likely leave you with higher prices and fewer choices.

That's all great news for the telecommunications giants – but not so good for the rest of us.

It's all about the tolls

Net neutrality is the principal that internet service providers should, in general, treat all data sent over the network the same, no matter whether it's an email, an emoji sent over a chat service, a phone call, a political rant live-streamed by a college student from her parents' basement, or the latest show on Netflix. In particular, the FCC's 2015 net neutrality rules bar ISPs from blocking, slowing, or providing preferential treatment to particular sites and services.

The battle over the FCC's rules comes amid a period of increasing consolidation among telecommunications and content companies. Comcast owns NBC Universal. AT&T is in a fight to buy Time Warner. Verizon owns AOL and Yahoo. Those companies already had immense power over how you connect to the internet. But they now also have a big stake in what you see and do online. 

The repeal of net neutrality will give these giant companies free rein to favor their own sites, services, and content, and discriminate against those of rivals. As long as they tell you what they're doing, the government won't stand in their way.

I don't think this discrimination will come in the form of blocking or throttling access to rival sites, as some net neutrality supporters fear. Instead, I think the telecommunications companies will basically start charging new fees and tolls.

If you're a Comcast customer, you may have to pay extra to be able to stream video from Netflix or Amazon, rather than from NBC or Hulu, which Comcast part-owns. If you're a Verizon customer, you may get charged extra to access Google's news or finance sites rather than Yahoo's.

The rule-free environment the FCC is creating will give such companies the latitude to squeeze as much money as they can from you. The sky's the limit. And you can bet the companies will get creative. There's a reason nearly all of them are cheering net neutrality's demise, and it's not because they plan to save you money.

As a result, the internet will no longer be an open network. Instead, it'll be fractured and split into chunks. What you can access and see on the network will depend on what you're willing to pay.

It's bad for most internet companies except the giants

But the loss of net neutrality is not only going to mean higher prices, it's likely to mean less choice.

That's because it will allow broadband providers to impose new fees not just on you and me, but also on the internet companies that want to send their movies and websites our way. If Netflix wants to be able to stream "Stranger Things" to a Comcast customer, it will have to pay a toll to Comcast. If Spotify wants to be able to stream the latest hits to a Verizon customer, it will have to pay a toll to Verizon.

Such tolls will be a costly headache for Netflix, Spotify, Google, and the other big internet companies — but they won't be business breakers. Those companies generally have enough money at their disposal that they'll be able to pay whatever prices the telecommunications companies demand to ensure their customers can continue to access their sites and services.

But tolls could mean real trouble for those companies hoping to be the next Netflix, Amazon, or Google. Those startups could be hobbled by the charges — assuming they can afford to pay them at all.

The loss of net neutrality will mean fewer voices on the internet

One group of companies could be particularly affected by the repeal of the net neutrality rules — those that offer niche content. Such firms likely won't be able to afford the broadband providers' tolls and won't have the clout to broker deals, Aneesh Rajaram, the CEO of Vewd, which runs one of the largest smart TV app stores, warned in a conversation I had with him at Business Insider's IGNITION conference last month.

A company Rajaram knows that streams nature documentaries in ultra-high 4K resolution video is worried it won't be able to reach its customers if and when ISPs start imposing their tolls. If such companies are priced out of the market, more and more of the content available on the internet will come from the telecommunications and internet giants and you'll have access to fewer and fewer independent voices.

That might be OK if we weren't already seeing problems related to the dominance of just a few companies in the internet space, ranging from poor customer service and high prices in some cases to the widespread distribution of propaganda in last year's election. You can expect such matters to only get worse in a post-net neutrality world.

If we want to have any hope of addressing those and related problems, the internet has to remain open to companies that can take on the big incumbents.

Maybe the courts or Congress will do the right thing and overturn the FCC's effort to kill net neutrality. But in the meantime, the future of the internet looks pretty bleak.

NOW WATCH: Why Korean parents are having their kids get plastic surgery before college

See Also:

SEE ALSO: There's a big math problem with the FCC chairman's main argument for repealing net neutrality