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Get Ready for a Faster, Pricier and More Confusing Internet - The Wall Street Journal
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Without FCC rules, tech and media giants are free to consolidate, upsell and—hopefully—build more pipelines to increase competition
The Federal Communications Commission’s abandonment of net-neutrality regulations—which had promised retribution for companies that didn’t treat all internet traffic the same—only reinforces trends that have been in motion for years: Alliances are being forged and dissolved, and companies once known as giants are being swallowed up by even bigger behemoths.
Just look at the intrigue: Disney buys up a big piece of 21st Century Fox, AT&T and Time Warner continue their courtship, Verizon—bulked up with AOL and Yahoo—scores NFL streaming rights, Amazon is said to be toying with offering “free” TV service while users of its streaming device temporarily lost YouTube in Amazon’s spat with Google…and so on.
It was certainly telling that tech’s giants were subdued in their protest of the net-neutrality rule changes compared with their past reactions. Even Netflix, the ostensible victim of an unfair internet, apparently bought its own safe passage.
For you and me, the media consumers, the result of all of these power struggles could soon be an internet where we get what we pay for. Rising costs could be contained, however, by increased competition in ways we connect to the internet.
The internet is already far removed from the democratic ideal many held dear at its genesis, a place where any startup can be a disrupter. The biggest barrier to a company becoming the next Google, Facebook, Netflix or Amazon isn’t the end of net neutrality—it’s Google, Facebook, Netflix and Amazon themselves, says Joel Espelien, senior adviser at the Diffusion Group, which forecasts the future of TV and video.
These companies are already spending vast sums of money to push their ever-higher-bandwidth content to consumers. Forcing them to pay carriers to use so-called internet fast lanes—or to be exempt from data caps in “zero-rating” schemes—only solidifies their lead, says Mr. Espelien.
Part of the problem with the debate over net neutrality is that none of the giant corporations dueling over its future makes for a particularly sympathetic protagonist. Companies like Facebook, Google and Amazon currently have far more power to control what we see and hear than carriers do; they are increasingly happy to charge us for the privilege or else track our every move to monetize “free” services.
Blocking or throttling content—the biggest fear of those concerned about an internet without neutrality—could mean mutually assured destruction, as conglomerates retaliate against one another, AT&T senior executive vice president Bob Quinn wrote in a recent blog post.
None of this means an internet sans net neutrality will turn out just fine. In fact, the end of net neutrality will exacerbate an already messy situation.
The future, Mr. Espelien says, is a wider variety of broadband and cellular plans offering you faster access to particular services if you’re willing to pay more. If you can’t pay, you might still get fast access to services that can pay to reach you (or are prioritized by your carrier for some other reason), while the remainder of your broadband streams are subject to an annoying data cap.
“Look at the dollar stores, look at Wal-Mart, think about how this country works,” Mr. Espelien says. As America’s corporations change pricing and services to match the hollowing out of the middle class, he says, “you’re going to see a significant portion of the population on supercheap internet services that just have a ton of strings attached, like advertising, to make them economically viable.”
This is the sort of competition that current FCC chairman Ajit Pai has said the end of net-neutrality rules will bring about. What isn’t clear is whether the rule change will lead to more investment by service providers, as Chairman Pai has argued.
Half of all U.S. households have either one or zero choices for broadband access at the FCC standard of 25 megabits per second, according to a June 2017 analysis by a group of academics and experts. If the goal of net neutrality is to preserve competition among internet services and consumer access to them, then the remedy is to increase the quality and quantity of options to connect to the internet. If customers can easily jump from one carrier to another, those carriers will be less likely to block any desirable content or service—big or small.
Verizon and AT&T are both working on new access options in the form of 5G fixed wireless broadband. The idea is that instead of spending heavily to wire up every home or apartment, consumers can simply hang a receiver out their window and point it at the nearest 5G-equipped utility pole. Early tests have yielded impressive results, but it isn’t at all clear how well these systems will handle congestion.
Another option is internet from space. SoftBank has invested $1.5 billion in satellite internet provider OneWeb, which has said it is on track to begin launching its first satellites next year and will eventually total 700. The plan is to make fiber-optic-speed internet service available world-wide by 2020. Optimistic claims about satellite internet have been made many times before, however, and no matter how fast the connection, signals take longer when they have to travel into outer space.
Will an unfettered market just lead to more conglomeration? Or will it breed the competition required to maintain the internet as a hotbed of invention? We may not find out that answer for many years.
Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
Edited 1 time(s). Last edit at 12/17/2017 05:15PM by Speedy.
