Finite Solutions

Net Neutrality in the UK

Yesterday, you may have experienced a “slow-down” in some online services, maybe streaming HD video to your dedicated home cinema room, or via your multi room video system. Don’t worry it wasn’t an issue with your wifi, home network or router, it will have been due to a US political protest by internet giants, such as Google, Netflix, Twitter & Facebook. The idea behind this protest, is to simulate what their services could be like if “net neutrality” is not enforce. What’s Net Neutrality, you ask?

Net Neutrality is where ISP’s (internet service providers) considered all traffic equal, regardless of source and/or content. This issue has recently engaged business, government & the public, because it is speculated that US ISP’s, many of which are Cable TV providers are going to slowing down certain types of bandwidth heavy content, such as Netflix, creating a perceived fast and slow lane of internet. The fast/slow lane meme is propagated throughout mainstream media by the internet giants, News networks and bloggers, however, net neutrality is a little more complicated than that….

First we have to consider that the main forces behind this debate, are ISP’s, Movie studios, Cable TV networks (many of these are combined or closely tied), Internet companies and the US government. All of these multi-billion dollar forces are motivated by finances and power, rather than the morality of a free internet, as they suggest and sway public opinion.

ISP’s/cable companies are concerned with 2 main issues. 1- Existing Cable customers are ‘cutting the cable’ and opting for on-demand services like Netflix and Amazon, costing them revenue. 2- Netflix and Youtube streaming combined, consume over 50% of the total internet traffic at peak times, that the ISP’s have to pay for the infrastructure to enable this large and increasing data transfer. While the first point highlights a conflict of interest, of providing a unrestricted internet service to its customers, that may be ultimately replacing older viewing habits, the second point about infrastructure is quite reasonable and will only cost the ISP’s more as 4K video streaming is adopted.

For the US government, regulation is solid job creator and can often slow the progress of industry, favouring the lobbyists and campaign financiers. This regulation of the internet will certainly be a double edged sword, as I will later explain.

As the Internet Giant’s online streaming services such as Netflix and Google’s Youtube, continue to grow and viewing habit migrate from traditional broadcast to on-demand centralised streaming, it is in their interest to minimise the infrastructure costs.

The idea the net neutrality frees entrepreneurial innovation seems to be the main argument, after cost increases to heavy netflix users. While this may be true, the new legislation may also hinder online and social innovation. In the new legislation, the phrase “lawful content” is used throughout. This then raises the question, what is lawful content?

Laws are established to govern what already exists is society, often protecting the status quo and respective business models. When innovation challenges the way society interacts, it will often challenges the laws that govern it. Lyft is a new app that connects people who need a lift with a driver with a spare seat. The social networking side of Lyft allows to see who is offering and want a lift and even blocks searches if you didn’t like a previous driver/passenger. There is also the website airbnb.com that connects people who are looking for overnight accommodation and home owners with a spare room. Airbnb is starting to upset the bnb and hotel industry in the US and I would expect it to here in the UK soon.

Both of these services are positive, yet disruptive to the established industries of taxi’s and hotels. As the taxi and hotel industries are regulated by government and the drivers of lyft and home owners of airbnb are not, it could be perceived that both these online services are “unlawful”. In fact, these and similar online services are currently being petitioned and even banned in some US states and countries around the world.

While Net Neutrality is taking centre state in the US, here in the UK, we will feel its impact. There has already been a price increase in Netflix, after they stated to have to pay Comcast to ensure a quality connection to their users. The majority of larger services come out of Silicon Valley in the US, if the US government start interfering with internet traffic, innovation and adoption of new online services could be hindered effecting us all…