The 451 Take
Enforceable regulations around broadband and internet access haven't changed substantially since 2007, when the FCC officially classified internet service as an 'information service' and not a carrier utility. This is what kicked off the many rounds of lawsuits, debate, policy fights and eventual public hysteria. We are now back to the status quo for broadband internet – so nothing has changed, nor will it. There is a potential for congressional action to formalize Title II status for broadband into law, but the chance of success here is small. Realistically, any substantial change to regulation on cable broadband is now at minimum five years away.
The reason this has been such a prolonged fight is twofold. First, there is a substantial cadre of people involved with the underpinnings of the internet that (correctly) believe its best aspects are brought out when network traffic is not artificially constrained. Placing artificial limits on capacity and throughput at arbitrary points in the network causes hiccups in the way the internet was designed. This position is bolstered by online content creators, who have designed their systems around these principles and also fear that they will be held hostage by carriers for access to customers. Carriers, on the other hand, understandably believe that if they make a capital investment in infrastructure, they ought to be able to do what they like to maximize returns.
Second, net neutrality has become a political football because consumers want the internet to work just like telephone wires and toll roads, and be protected from price gouging. The internet has become so foundational to our economy and society that the idea of tinkering with it is galvanizing to the general public.
Yet the reality is that consumers have little to fear. Broadband internet access is a near-monopolistic competition in the vast majority of the US today, with users generally having between one and three options that all cost roughly the same (no surprise) and perform roughly the same. But carriers don't want to have fewer customers – they walk a line between what the market will bear and maintaining growth. In the meantime, since the net neutrality fight really blew up in 2015, carriers have been busily experimenting with ways to monetize broadband assets that don't involve traffic throttling, such as over-the-top (OTC) services, premium equipment and partnerships, and acquisitions/mergers with content providers to directly sell content.
The threat around net neutrality drove a wave of experimentation in productizing eyeballs that continues today. On the flip side, ISPs and online businesses constantly negotiate on capacity, speed and access to internet destinations – and like most other business deals, the content providers (e.g., Netflix, Hulu) get what they pay for. Thus, net neutrality is essentially meaningless when it comes to purchasing bandwidth as a business.
In any case, the complete absence of wireless broadband in the entire conversation makes the ongoing net neutrality argument moot. Wireless internet is growing far faster than wired internet at this point, and with 5G on the way, it will soon be the dominant way most consumers and businesses get access. Yet these services are untouched and unmentioned in regulations with regard to net neutrality. In fact, many wireless providers already offer the throttling and premium high bandwidth services so feared by the pro-net neutrality crowd, with HD video and special streaming services offered over the air for extra fees. That fight, where it would have mattered most in preserving a future for 'neutral' internet access, is already over without a single shot fired.
Carl Brooks is an Analyst for 451 Research's Service Providers Channel, covering cloud computing and the next generation of IT infrastructure. He specialized in server and desktop operations, Linux and Microsoft products, and security, and has
Rory Duncan is the Research Director for 451 Research's Managed Services & Hosting channel. His research focuses on the global managed services and hosting market, where he tracks IT managed service providers, web and applications hosting firms and content delivery network providers.
As a Senior Analyst for 451 Research, Dan Thompson provides insight into the Multi-Tenant Datacenter (MTDC) market space. Dan is particularly focused on MTDCs that are trying to move up the stack to offer additional services beyond colocation and connectivity.