Implications from the vote to overturn net neutrality.

By Stephani Estes

Last week, the FCC voted 3-2 to end net neutrality, amidst overwhelming opposition from Congress, the technology sector and advocacy groups. These rules, put in place in 2015, prevent ISPs from blocking and throttling traffic and from charging extra fees for so-called “fast lanes.” The decision also ends ISPs from being classified as Title II common carriers, which removes the ability to apply such legal regulations in the first place. FCC Chairman Ajit Pai, the driving force behind this change, has stated that ending net neutrality will stoke innovation. Advocacy groups have argued that this will effectively end the free internet as we know it with ISPs now able to endlessly upsell consumers for access to content.

This move has a number of implications for consumers, content products and marketers.

First, consumers will face more restricted and/or expensive access to content. It also greatly impacts content producers who, in order to deliver content at the speed expected by today’s digital consumers, will likely end up paying ISPs for priority in delivery.

The end of net neutrality also has several implications for marketers, including:

• Increases in digital media costs: As publishers and sites face potential increases in fees from ISPs, it’s likely those costs will be passed along to advertisers.
• Greater consolidation in content providers: Smaller sites and content producers will likely lose the most without net neutrality, with the bigger players best positioned to be able to pay for bandwidth. Fewer, bigger players will contribute to higher costs as there will be less competition.
• An uneven playing field for ISP content providers: Given that many ISPs have started expanding into the content game, this presents an inherent conflict of interest, as these parties would have the ability to prioritize delivery of their own content.
• Digital partnerships will evolve: As ISPs gain control on the speed of data, new revenue streams may emerge. For example, brands may have the ability to sponsor the data for specific content. However, some have pointed out that with the significant negative consumer sentiment around this issue, appearing to partner with ISPs who are limited content access may have implications for those brands.
• Viewability as we know it will change: Slower internet connections mean that ads may not load at proper speeds. With ads loading last on pages, many ads may not load in time to be defined as viewable, or may not even load at all. This will upend the years of work the industry has done in moving viewability metrics and accountability forward.
• An uneven playing field for brand content: With ISPs now unlimited in their ability to charge for access to content, brands may also face increased fees for delivering their content to consumers in a timely manner. Brands who are able to pay for this access will benefit, and those who cannot may be left behind.

Any changes as a result of this decision will not be immediate. The rules must first be entered into the federal register, which should happen early next year. There are also some who believe this issue will need to be settled by congressional legislation, which may add further time to the resolution, as net neutrality has devolved into a partisan issue (despite its beginnings in the Bush administration as a non-controversial bi-partisan effort). Complicating the matter further, minutes after the decision was announced, more than 15 states have indicated they will sue the FCC in order to preserve net neutrality, including New York, California, and Virginia.

As consumers have come to expect content on demand, regardless of the device or provider, we believe that any potential disruption to the delivery of this content would be problematic for marketers and consumers alike. Not only would this impede our ability to connect with consumers in digital content, but it also has the potential to impact our clients’ ability to deliver their own content to consumers through their own sites. For these reasons, we believe an open internet with unimpeded access to content is the best solution for our clients and the consumers we seek to reach, and as such we’re disappointed in the FCC decision. We’ll continue to monitor this situation as it evolves, and will update our POV as we begin to see any effects from this decision take place.