More and more companies are joining the fight for net neutrality as the Federal Communications Commission vote looms near. While Internet classified as a public utility stands to benefit innovation and the multitude of startups that now populate the United States, it’s also a boon to Internet giants.
Today, Yelp voiced its support for the classification of the Internet as a public utility in a blog post. Yelp, like many Internet giants, is a member of the Internet Association — an organization that campaigns for equal Internet service for all, not a tiered system that charges companies and people based on their consumption and connection speed.
Netflix, Amazon, Etsy, AOL, eBay, Gilt, Facebook, Google, Expedia, Lyft, IAC, Reddit, Twitter, Rackspace, Yahoo, Uber, Trip Advisor, Salesforce, Zynga, Yelp, Vimeo, PayPal, Flickr, Ask.com, About.com, Zynga, and Airbnb are all pushing for a neutral net.
Net neutrality’s effect on ISPs
The debate in favor of Internet as a public utility has so far focused on the everyman. An open and equal Internet has allowed anyone to get high quality web access, which in turn has spurred the growth of many small companies.
While many of the most popular tech companies like Google, Yahoo, and Amazon were once garage-based startups, they are now big, highly profitable companies. As such, they consume a lot of Internet bandwidth, more than your average consumer for certain. The question is whether ISPs should therefore be able to charge them more.
In an op-ed from last year, publisher Steve Forbes noted that in order to grow broadband networks, ISPs need money. Charging more money to bandwidth-guzzling Internet companies seems like the best way to get that money. But if broadband becomes a regulated public utility, carriers won’t be able to do this. Ultimately he says, innovation will stagnate and everyone will suffer.
However, the idea that classifying the Internet as a public utility will affect the growth of ISPs has largely been debunked. At a UBS investment conference, Verizon’s chief financial officer Francis Shammo stated that a Title II classification would not affect the way the company invests in its network, as Ars Technica reported earlier this month.
That may only be true for the larger ISPs, though. Smaller broadband providers have made it clear they will sue if the FCC approves chairman Tom Wheeler’s proposal, according to a report from the Washington Post.
Should big companies pay more?
It’s true that ISPs stand to miss out on some big cash if their services are regulated as public utilities. Big Internet companies are facing large fees if the Internet remains unregulated. Late last year, Netflix, while campaigning for an open Internet, signed a deal with Comcast giving the company’s traffic priority — meaning consumers wouldn’t have to experience timed-out movies. The arrangement was said to be costly, though details of the deal haven’t been revealed.
Despite (or because of) this privately negotiated prioritization, Netflix continues to press for classification of the Internet as a public utility. But the big question remains, should these companies that have reaped much of their success from having access to the Internet have to pay more?
“The short answer is no,” said Michael Weinberg, vice president of the public interest group Public Knowledge. “[Large companies] don’t pay extra to their electricity company because they’re successful companies,” he says.
While carriers certainly could make more money on large Internet companies, it doesn’t mean they should, Weinberg said. And charging more money to Internet companies could ultimately affect consumers.
“If a successful company has a new cost center because ISPs start charging them more, the money it pays to the ISP has to come from somewhere — ultimately consumers. So either the price for consumers is increased in some way or the money that a company has to develop new products is reduced,” said Weinberg.
On a final note, he says ISPs are already being paid for the services they provide and to develop their network — that’s what your monthly Internet bill pays for. So while big Internet companies do stand to benefit from a net neutrality, that’s not a bad thing.
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