Industry Voices—Gillott: Time to take a breath and chill about net neutrality

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The FCC is poised to vote on net neutrality Thursday.

The net neutrality discussion is not new, having been a topic of conversation during the tenure of each of the last three FCC chairmen. But recently, the excitement has risen to levels I have not seen before—excitement may be the wrong word. Maybe hysteria is better.

Perhaps it is an indication of the importance the internet has in everyone’s every day lives that talk shows, comedians and the general press are predicting the apocalypse if net neutrality is revoked or seriously neutered. Or maybe we are all a little on edge these days and look for doom and gloom in everything coming out of Washington. The reality is that few people outside the telecom industry have ever paid much attention to FCC debate and decisions in the past, but 2017 seems to be different. When the FCC Chairman’s children are being picked on at school for a pending decision about net neutrality by the FCC, you know things have gone off the rails and are a little nuts.

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It is time to take a deep breath, step back and put everything in perspective. Relax. Get the blood pressure down. Stop and smell the roses.

I do not believe the world will end the day after the FCC, potentially, cancels or significantly weakens net neutrality, as many are expecting later this month. The world will not stop turning. The sun will come up, people will go to work and children will go to school (unless it is a weekend). The trash will be picked up and the mail delivered.

And the internet will potentially change but, I think, perhaps not as much as some people fear. Some have predicted that consumers will have to pay more to access their favorite sites, that smaller companies will lose the ability to market and sell via the internet, or that some sites will be blocked completely. Some see an internet with fast lanes, slow lanes and really slow lanes that segments those companies willing and able to pay from the rest.

But in my view, these discussions do not take into account one very important factor: consumer satisfaction and opinion.

We at iGR conduct a considerable amount of primary research and survey many thousands of consumers each year. Part of our research covers satisfaction levels and the drivers of that satisfaction (or dissatisfaction in many cases). It is true that in many cases, telecom providers (wireless, wired, cable and satellite) rank lower in satisfaction than brands in other industries. And in fact, brands such as Apple and Samsung usually rank far higher in consumer satisfaction than the telco brands.

So consider for a moment the U.S. without net neutrality. A millennial picks up their smartphone and goes to access a popular website, only to find it is responding very slowly or is blocked completely. We older folk all know that millennials have no patience for slow internet delivery (they need everything NOW) and so who will the millennial blame?

Will they blame the manufacturer of their smartphone? Unlikely—Apple can seemingly do no wrong in the eyes of its fans and Samsung has a very strong following among the Android faithful.

Will they blame the website brand for the poor performance? Again unlikely—it is hard to imagine significant numbers of people blaming Amazon, Netflix, LinkedIn, Google or Facebook for poor performance. Each brand has its own loyalists and detractors, and while some may complain, the majority are unlikely to.

No, my opinion is that the majority of the blame for poor internet performance on some sites will be directed at the telcos. We have become accustomed to having little or no choice in many areas of the country for ISPs, dropped calls and connections in the same place each day on our wireless networks and blocked TV channels in some markets when cable MSOs and content creators fail to agree on a distribution deal. So it is relatively easy for a consumer to direct their "net neutrality" anger at the telcos, especially when they read in the mainstream press that it is the telcos who stand to gain from charging fees for Internet fast lanes.

The problem will only get worse for the telcos when some of the ISPs decide not to restrict access (as some have already said) or impede the consumer experience. In essence, these ISPs are saying that they will treat the Internet the same as if net neutrality were still in place. This will only highlight the differences from those ISPs that decide to try and benefit from the cancellation of net neutrality at the expense of the consumer experience.

So once the non-net neutrality dust settles, I believe that consumer opinion, satisfaction and behavior will mean that the ISPs are limited in what they can do. I can see a situation where there are fast internet lanes (for example Netflix buys juiced-up performance when a new season of The Crown is released to maintain performance in the face of heavy demand) that some companies fund. But this is unlikely to come at the expense of overall internet performance – in effect, there will be fast and very fast lanes. If the ISPs impede the performance of the majority of sites, consumers will express their anger by switching providers (if possible), taking to social media or calling customer care.

The last action could potentially be very damaging for the telcos. Customer care support costs real money (those call centers have to be staffed) and many telcos are measured on their customer care performance. If an ISP starts blocking access to certain sites or has poor overall performance, people will call and complain – that will increase costs and ultimately, shareholders and Wall Street will notice. No CEO wants that situation.

So ultimately a balance will be found between customer satisfaction, access to all the websites and fast lanes for those companies that want to pay. And the world will not stop turning. The sun will still rise. And my son will still be able to use 30 GB of LTE data in two weeks watching football and basketball!

Iain Gillott, the founder and president of iGR, is an acknowledged wireless and mobile industry authority and an accomplished presenter. Mr. Gillott has been involved in the wireless industry, as both a vendor and analyst, for more than 22 years. iGR was founded in 2000 in order to provide in-depth market analysis and data focused exclusively on the wireless and mobile industry. In recent years, research has expanded to cover broadband telecom services to the home, as homes and businesses have become more connected.