The State of California has decided to cool its jets, at least temporarily, on its net neutrality law passed earlier this year. The state will await the ruling of a lawsuit brought forth by non-profit Mozilla against the FCC, saying that the national body’s decision to overturn net neutrality both violates federal law and harms those who use the internet. California had passed its own pro-net neutrality act in September. Prior to this recent announcement by California Attorney General Xavier Becerra, the law had been scheduled to go into effect on January 1, 2019.
Ever the rogue state, California bucked the trend set by the federal government earlier this year when Governor Jerry Brown signed S.B. 822, guaranteeing strong net neutrality protection for citizens of California. California is the fourth state -- joining Washington, Oregon and Vermont -- to pass such a law, with more states looking to do the same in 2019.
The bill’s passage was somewhat of a surprise given the financial windfall to internet service providers (ISPs) such as AT&T, Verizon and Comcast, all of which would have benefited significantly had it failed.
Good News For Content Mega-Providers
The California ruling is huge for the likes of Facebook, Google and Apple, which would have faced potentially devastating carriage fees from the ISP giants or perhaps been forced to fork over a service charge for connectivity speeds above a certain barrier for their customers. It was decidedly unfamiliar territory for these mega-corporations, which are not used to marching to the beat of someone else’s drum.
With the California bill passage, the big three content providers and others like them are entitled to the same bandwidths and high speeds as everyone else without worrying about hidden fees that could take a huge bite out of their profit margins. It certainly can’t hurt that the big three content providers all are headquartered in California (Facebook in Menlo Park, Apple in Cupertino, and Google in Mountain View).
The big content providers had rallied as one last year when the FCC voted to dismantle net neutrality, with Netflix vowing “this is the beginning of a longer legal battle” and Twitter calling the decision “a body blow to innovation and free expression. We will continue our fight to defend the open internet and reverse this misguided decision.”
Small-Business Struggles
In the short-term, the risk falls on technology companies that require delivery of their content to end users or to mobile apps to succeed. With no tiers or any other such structure in place for delivering content, this puts smaller companies and startups in the same great race for bandwidth as the big dogs. Without net neutrality, companies like Sony or Netflix won’t go up the escalator for premium bandwidth when they release something special; they will just devour more and more of the plain-Jane internet space that they share with every single other company out there. Non-discrimination is a door that swings both ways. Think about cable television. HBO and its kin are the elite of the networks, running ad-free programming and charging an arm and a leg in subscription fees, making money hand over fist.
At the other end of the spectrum, niche channels are drawing in niche advertisers, focused on their own specific audiences and also turning a profit. Both networks exist in the same space, but the only similarity they share is using cameras to film and appearing somewhere on your guide. When whales like Google and Facebook suddenly return to the community watering hole, there’s not so much water available for all the little fish to swim comfortably in anymore.
Loss Of Innovation?
Another negative of the California legislation and the other states that have or will pass similar bills is that it lowers the bar on developing top-grade technology on both sides of the equation. Big ISPs will see no justification in pushing broadband to the next fastest level in a state where no one is allowed to pay an extra penny for it.
The reduction of speed will see a trickle-down effect all the way to the individual, who may see their browsing speeds slowed down from all the demand at a fixed rate. Companies will feel the same pinch. A brilliant idea like live streaming video or a virtual reality app will die a quick death before it even reaches the design phase when companies realize that without the ability to guarantee ultra-fast data package deliveries they are risking their reputations when considering marketing campaigns or advertising schemes which rely on fast, constant broadband.
Only The Beginning
This is a legal battle that has only just begun, and it's one that promises much debate in the future. With such major financial implications for both consumers and businesses small and large, net neutrality will surely remain a hot topic.
