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FCC decisions may change net neutrality and data privacy. With net neutrality rules relaxed,   ISPs could charge to prioritize access.

FCC Signals Possible Net Neutrality Changes for Businesses

The Federal Communication Commission (“FCC”) has undergone a significant change in leadership under the new administration. Previous-era decisions on net neutrality, broadband deployments and privacy rules are expected to undergo major reshaping in the next several months, and businesses of all kinds may be impacted.

What Is Net Neutrality?

Net neutrality is the principle that Internet service providers (“ISPs”) should allow users access to all content and applications without blocking particular content or providing preferential speed or treatment to companies or applications that pay extra fees. ISPs such as Verizon and AT&T have been pushing the envelope with Verizon’s Go90 video service and AT&T not including data caps on its DirectTV subsidiary apps.

Impact on Business

What does this mean for businesses?If net neutrality rules are relaxed, ISPs could possibly charge companies to prioritize access to their content. If a business can’t afford to pay extra for premium service, it could lose its competitive advantage. Alternatively, larger ISPs may now look for further acquisitions of content providers to entice customers with these “zero-rating” services.

Data Privacy

The FCC also suspended part of an implementation on privacy rules that would have required ISPs to disclose to customers information collected on them and how it’s used or shared with other companies, such as advertisers. ISPs have argued that, due to their classification under FCC rules, they cannot compete on equal footing with other companies that do not have to expend resources in reporting this information to customers. The FCC wants one unified regulatory framework and to make sure that those companies only regulated by the FTC will be on equal footing with FCC-regulated companies. A redetermination of ISP classification could change how advertisers collect data, potentially increasing prices or alienating consumers over how their private data is used.

The FCC also recently voted to eliminate disclosure information on broadband speeds, fees and rates for small- and mid-sized ISPs, (ISPs with less than 250,000 subscribers). If you have a small-to-medium size business in a community serviced by a small ISP, you may find it more difficult to know about your speeds and fees. Stay tuned for further information from the FCC.

Philip DiBartolomeo is an Audit Director in the Financial Services Group.

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