Does the net neutrality ruling impact the Internet? Maybe, maybe not

By Jim O'Neill on Jan 15 2014 at 8:00 AM

Netflix already has begun to feel the financial effects of an appeals court striking down the FCC’s Net Neutrality rules; the streaming company’s stock fell more than 2% on concerns that its content delivery costs soon could rise, although there are no guarantees that they will, or, that they won’t.

And there’s the rub.

Although the U.S. Court of Appeals for the D.C. Circuit ruling gives broadband providers like Comcast and Verizon the option to charge Internet services that use their pipes to deliver content higher prices, it’s unclear whether they will, or when they might begin.

The FCC, in fact, has never forbidden service providers from charging companies that use their networks fees for guaranteeing better delivery, the agency simply had rules that made it clear they didn’t support the practice.

Now, it’s a moot point; the FCC no longer has any legal status to challenge fees charged content owners or aggregators for preferential service levels.

But will it change anything?

Will Netflix – and other content providers – need to increase subscriber fees?

Will the ruling increase costs for smaller companies looking to launch video products?

Netflix had nothing to say publicly about the decision, but immediate reaction – on any front – is unlikely.

In fact, conventional wisdom says nothing will change, that the challenge championed by Verizon is more a case of simply clearing the decks for the future, removing hurdles to business that aren’t necessary.

After all, most major operators already have vowed not to slow down – or prioritize – traffic, pledging to maintain an open Internet.

Without any regulation, however, the temptation to adjust speeds, just a little bit, may be tough to resist.

Tim Wu, a Columbia University law professor credited with coining the phrase “net neutrality,” was more concerned… for the consumer.

“It takes the Internet into completely uncharted territory," he said.

Here’s what Kevin Werbach, a University of Pennsylvania business ethics professor, former FCC employee and one-time telecommunications advisor to the Obama administration had to say:

“What Verizon was really in this fight to win was the argument that the FCC doesn’t have the authority to regulate broadband. They lost on that,” opening the door for the FCC to create new rules.

The next steps are up to the FCC, which could either change the way they classify broadband providers to allow more regulation, or challenge the ruling to the Supreme Court.

Or, it could simply accept the status quo.


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