Controlling The Pipes But Not Yet The Content

What happens to video content companies now that Internet service providers may get the upper hand from a court decisionstriking down the FCC’s “net neutrality” rules?

Under those rules, which required all data to be treated equally, ISPs could not discriminate or charge differently based on users, content or other factors.  

Now, in theory, Verizon, AT&T, Comcast and other broadband Internet providers could charge higher rates for faster speeds to premium high-end content providers like ESPN and Netflix.

Broadband providers want an open Internet. They want media capitalism in the open to prevail, so that consumers can decide what services and websites they buy and access.

Consumers might be initially happy -- until Netflix or others might, in turn, start charging more for their services.

What did the FCC do wrong, according to the court?  Mainly, the commission defined the Internet as an “information” service rather than a “telecommunications” service or a “utility” like phone companies.

Worried about monopolistic tendencies? The FCC didn’t want to go there. The FCC had been trying not to regulate broadband providers. Tom Wheeler, chairman of the FCC, has wanted to free up Internet companies to design new products and services. All that presumably has backfired.

The FCC “failed to establish... anti-discrimination and anti-blocking rules,” said the U.S. Court of Appeals for the District of Columbia.

What does this mean for content providers and even for marketers who also look to sponsor and serve content? The jury -- pardon the phrase -- is still out. The FCC might appeal the court’s decision.

For its part, Verizon general counsel Randal Milch said the ruling “will not change consumers’ ability to access and use the Internet as they do now.”

For traditional TV businesses, the continued move of content to the Internet and other digital outlets had seemed to bring some newfound freedoms from over-the-air restrictions and traditional battles with cable operators. Turns out a new war may be beginning.

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2 comments about "Controlling The Pipes But Not Yet The Content ".
  1. Douglas Ferguson from College of Charleston , January 15, 2014 at 2:32 p.m.
    Netflix can set its own prices and subscribers can vote with their feet. The less government intrusion, the better.
  2. Michael Kaplan from Blue Sky Creative , January 15, 2014 at 7:44 p.m.
    Douglas - So when your cable-based ISP decides it's losing too much business to Netflix and wants to boost its own pay-per-view service, you won't mind if they reduce your download bandwidth rendering Netflix unwatchable? Sorry -- but that's exactly why we need some sort of regulatory control.