Why your business needs to think about net neutrality

The need to proactively observe goings-on that could affect the environments within which organisations operate has always been important. In the midst of economic circumstances likely to prove to be the most testing for a century, it is indispensable.

It is apt, then, that two of the world’s tech giants recently announced their intention to undertake two major projects that will strengthen their influence on macro digital infrastructure. Google intend to lay a data cable that will stretch along the seafloor between America’s east coast and Spain.¹ Amazon’s project – which has received approval from the relevant authorities – is even more ambitious: they plan to launch 3,000 satellites into orbit in order to improve global internet coverage.²

Both of these examples will certainly provide positives for organisations around the globe. More consumers will be able to access their online properties such as websites and social profiles, for example. Yet this should also serve as a potent reminder of the fact that the infrastructure that enables the exchanges of digital information upon which so much now relies is owned by private bodies.

Bodies whose interests may, on occasion, not align with those of your organisation. Most businesses are reliant on the internet in some way and the increasing levels of control others have over its foundations are a cause for concern. Particularly when the US authority’s recent rulings on net neutrality are considered.

What is net neutrality?

In essence, the concept of net neutrality is a simple one: all digital content should be treated equally and private organisations that control infrastructure cannot prioritise, impede or block properties. Some websites have been banned previously, and some are faster or slower than others, but the removal of content has always been attributable to authorities, and poor or superior performance to actions taken by properties owners.

Following a landmark ruling reached near the end of 2019, though, those that own infrastructure in the world’s largest economy are now able to control their users’ traffic as they see fit.

On the 1st of October 2019, the United States Court of Appeals upheld a decision the Federal Communications Commission had made on the 14th of December 2017. They agreed that any organisations providing a consumer of any kind with access to the internet are delivering an information service rather than a utility.³ In turn, this meant that the companies providing said service should be subject to fewer regulations.

What do these changes mean?

Whilst no significant alterations to major digital properties have been announced or observed following this change, the potential ramifications of this ruling are significant for businesses that trade in the US. Internet service providers (ISPs) can now prioritise certain websites, platforms, etc. without interference. As many commentators have pointed out, this is likely to prove to be particularly harmful to small businesses in the long term.

Large organisations are far better placed to pay annual fees to an ISP in exchange for their digital properties receiving priority treatment. Smaller businesses, whose online sales are likely to pale in comparison, could find fees prohibitively high, leading to a significant portion of their audience finding their website to be slow and unresponsive. Studies have shown that websites that take more than three seconds to load lose more than half of all attempted visits.⁴

In short, the absence of net neutrality is likely to adversely impact any SME that trades in the US, particularly as ISPs look to diversify their income sources to offset the fiscal harm brought about by a pandemic-induced recession.

For consumers, the effects are also likely to be pronounced. There is a very real possibility that ISPs could collect substantial fees from large corporations in exchange for the creation of micro digital monopolies. If, for example, an ISP were to make only one grocer or fashion retailer accessible through their network, then this retailer would enjoy a captive online audience. This would likely be valuable to both parties.

ISPs would, as stated previously, be able to collect substantial fees whereas retailers could harness a monopoly to raise prices in specified areas. A lack of competition could also bring about lackadaisical attitudes and the deprioritisation of customer service. With the majority of American consumers able to choose from just two ISPs⁵, this possibility is worryingly practicable.

Will this affect business in the UK?

We’ve already touched on the fact that any business that sells goods to consumers in the US is certain to be affected by this change. Furthermore, economics dictates that, when one business encounters difficulty, others are nearly always affected by proxy. Could, though, an absence of net neutrality become a more direct problem for organisations that trade exclusively in the UK?

At the time of writing, the UK is still beholden to EU legislation that effectively preserves net neutrality. This, though, could be dismissed following the end of the Brexit transition period in December of this year.

Computer Science Professor Saleem Bhatti of the University of St Andrews cites both the UK’s commitment to a universal service obligation (USO) that will effectively make broadband access for all a legal requirement and the presence of regulator Ofcom as safeguards against the reversal of net neutrality in the UK.⁶ Nevertheless, Ofcom’s ability to regulate ISPs in the UK flows directly from them being deemed to be part of the telecommunications industry.

The organisation’s power also flows directly from government appointments. Both the classifications of the services offered by ISPs and the government’s backing of Ofcom can be amended. Neither can be seen as capable of guaranteeing the ongoing observance of net neutrality as a result. Indeed, it is entirely possible that the government – having already accrued trillions of pounds of debt in 2020 – seek corporate sponsorship as a means of building the national infrastructure needed to fulfil the aforementioned USO.

Whilst consumers in the UK have more choice with regards to ISPs than those in the US, competition is still limited. At the time of writing, BT, Sky and Virgin serve more than two thirds (69%) of home users⁶, meaning that increased competition is unlikely to prevent revised business models used by American ISPs from being profitable for their UK counterparts.

Of course, it is impossible to state with certainty whether the UK will cease to maintain net neutrality but – with it being both possible and certain to deliver considerable consequences should it occur – the need to plan for such an eventuality cannot be understated.

Planning for biased digital spaces

Planning for digital environments that do not treat all players equally is by no means a simple task. Communal legal action may be the best course to take in the long term. Legal challenges continue in the US – albeit partially due to the complexities brought about by federalism – and Democratic candidate Joe Biden has claimed he would repeal prior decisions and restore net neutrality if elected.⁷

Such action is rarely quick, however, and would need to be teamed with PR strategies and the development of tactical partnerships to counter negative results. The former should, I believe, focus on the fact that, in the UK, SMEs both employ more people and generate more turnover than large corporations.8 Pointing this out to the general public is certain to paint any ISPs that place this community at a disadvantage in a negative light. In turn, this will negatively impact their profits.

Ironically, considering that it was one of their projects that provided the initial inspiration for this article, small organisations must develop partnerships with companies such as Google, too. Whilst their project served as a reminder of how external involvement in the development of digital infrastructure can bring about an environment that is fundamentally unfair, their business model is one that is, in many ways, just as reliant on a neutral internet as any small business.

Google – and all search engines, for that matter – require an audience to use their service in order to generate profits. People use their services because they want the best results in response to their queries. If their users are suddenly unable to access the websites search engines recommend, their consumer base will shrink. In turn, their advertising profits will suffer.

The company have also hosted landing pages on their own servers previously in order to allow advertisers to provide consumers using mobile devices with fast-loading landing pages known as accelerated mobile pages (AMPs).

Businesses that develop a relationship with Google now could find themselves able to leverage this technology for their properties across all devices and avoid the negative consequences of ISPs deprioritising their websites. No ISP, after all, would be willing to engage in conflict with Google, an organisation in possession of infrastructure capable of providing consumers with free internet access.⁹

Conclusion

It may only be a pressing issue for US-based businesses and those that trade within relevant borders at the moment, but there is a reasonable chance ISPs in the UK could prioritise and deprioritise certain content at some point in the near future. The recent pandemic and resultant economic upheaval have served to make this more likely.

It is advisable that business owners and senior stakeholders familiarise themselves with relevant UK laws in order to combat this possible eventuality. The proactive development of PR campaigns and the creation of relationships with large companies reliant on digital advertising as their primary means of generating revenue should also be prioritised.

The digital arena is something that no business can ignore. Any potential threat to your ability to leverage it to its full extent must be taken seriously. Net neutrality may well remain in place within the UK, but as it would have truly catastrophic effects, its potential abolition must be factored into all business resiliency strategies.

Why your business needs to think about net neutrality

What is net neutrality?

What do these changes mean?

Will this affect business in the UK?

Planning for biased digital spaces

Conclusion

References

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