Net Neutrality is commonly called for by consumers, but it has been assumed that corporations would prefer an internet where they can buy faster access. A statement from a group that represents Google Inc (NASDAQ:GOOG), Netflix Inc (NASDAQ:NFLX), Amazon.com Inc. (NASDAQ:AMZN) and other web giants betrays that feeling, and may form the biggest attack on bandwidth commoditization yet.
The statement was released by The Internet Association, a group that counts some of Silicon Valley’s best and brightest among its members. According to the group “The Internet is threatened by broadband Internet access providers who would turn the open, best-efforts Internet into a pay-for-priority platform more closely resembling cable television than today’s Internet.”
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Google and Netflix fight for Net Neutrality
The net-neutrality legislation that prevented Internet Service Providers from charging for more bandwidth was struck down by a court last January. The regulator is currently working on a new set of rules that would limit the interference that companies like Comcast Corporation (NYSE:CMCSA) are allowed to levy on infrastructure, while allowing a certain level of private agreements on bandwidth.
Michael Beckerman, President of The Internet Association, told Reuters that the group was planning a campaign to influence the direction of the new legislation. The executive told the agency that “We’re going to be getting pretty vocal about this issue. It doesn’t make sense anymore to differentiate the way net neutrality applies to mobile and wireline.”
Corporate control hits corporations unequally
Just because a government policy is viewed as pro-corporation doesn’t mean that all corporations benefit. The striking-down of the net-neutrality laws is a boon to internet service providers who are now able to control the flow of data, and charge for the privilege. Any new revenue source must come from somewhere, and in this case it’s the big web properties that are worried they’ll be paying a toll for delivery.
Companies like Netflix Inc (NASDAQ:NFLX), Google Inc (NASDAQ:GOOG), (NASDAQ:GOOGL), and Amazon.com Inc. (NASDAQ:AMZN) are all heavily involved in the distribution of video, one of their most data-heavy uses of the internet. Any allowance for paid bandwidth will affect each of these companies much more heavily than corporations involved in test publishing.
Paying for bandwidth would allow richer companies to ensure delivery of their content is faster than that of competitors making it next to impossible to dislodge properties like YouTube and Netflix, but the structure of the market would likely make the fight more of an arms race. Lining the pockets of service providers while resulting in no comparative benefit at Google Inc (NASDAQ:GOOG) or Netflix Inc (NASDAQ:NFLX).
The fight for the freedom of the internet is not corporations against consumers, it’s a more nuanced field than that. ISPs don’t tend to have as much power in Washington as the large tech companies, and the industries have set themselves against each other in this fight. The result will take a long time to appear as the FCC is currently in the process of collecting public comments on the issue.