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What Is “Net Neutrality” and Why Should You Be Concerned About It?

Apr 21, 2015

Net neutrality is a term that was coined by a Columbia law professor for the concept that internet service providers (“ISPs”) should treat all internet traffic equally and there should be no discrimination to the individuals or companies that use it.

People in support of net neutrality see the potential for ISPs to make alliances with big corporations who can pay for higher priced, faster connections. This would discriminate against startup companies who might not be able to pay more to be on the World Wide Web. ISPs have challenged net neutrality rules, saying that government regulation will reduce their ability to make a profit, and that they should be able to reap the benefits of the money they have invested (and will continue to invest) in technology to speed up the internet.

Here is an example of how net neutrality might protect the average consumer. Without net neutrality, big companies, like Netflix, will have to pay more to ensure that they have the internet speed needed so your movies play faster.  While at first you may dismiss this as Netflix' problem, eventually you are going to see that cost passed along to you, the consumer. Let's then say that a competing new company wants to enter the field. They have a better technology, great customer service, better cost, etc. But without net neutrality, they can't be guaranteed internet connectivity as fast as Netflix. If the ISPs wanted to, they could make it harder for startups to enter the market, and an era of favoritism and 'pay to play' politics could undermine our country's entrepreneurial spirit.

In February 2015, after over a decade of debate, the FCC approved rules that prohibit ISPs from speeding up internet connections for select company websites, or from slowing access to or entirely blocking consumer's access to websites who have not paid a premium.  Lawsuits have already been filed by several opponents of the new rules which reclassify ISPs as telecommunications providers, rather than information services, therefore making them answer to government regulation like public utility companies. The issue of net neutrality is far from over but the supporters seem to have won the first battle.

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Marc Fogarty

Marc Fogarty, Audit Partner within Technology and Life Sciences Group, and member of the firm's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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