Congress is about to end net neutrality. What it means to you, the reader, is that reading my blog or viewing a Netflix movie is about to cost you more. But how, you ask? Your internet provider is telling you that ending internet neutrality is nothing to fear. Comcast, one the of internet providers with the worst customer service, recently launched a media blitz telling you that they “don’t block” or “don’t throttle content” but what they aren’t promising is that the internet will cost you more. Here’s how.
The large broadband providers like AT&T, Comcast and Verizon provide you a pipe through which website content is delivered to you. Most of you pay an average of $50 to $65 a month to shop online, Google websites and read my blog. Each of the services, from Amazon shopping to Netflix movies currently flows through the data pipe unimpeded on its way to your device. What abolishing net neutrality means is that the telecoms, your internet provider, will now be able to create tiers of service on their data pipes. Without tiers of service, the telecoms must grow their subscriber base to increase revenues.
That’s what the telecoms are after with doing away with net neutrality, the ability to grow revenue streams without having to grow subscribers.
Without net neutrality, the telecoms will be able to create service tiers with prices increasing dependent on what type of data you consume. If you want to watch a movie, you need a larger data pipe. If you want to read my blog, you need a smaller data pipe. Currently the pipes are the same size. What will change, with the abolishment of net neutrality, is that the telecom would put in a throttle on your internet pipe dependent on the tier you have subscribed to. The throttle can throttle speed, or the amount of data you consume. The higher the monthly fee you pay, the higher amount of data you can consume or the faster the content is delivered to you. Now you can see how your monthly internet costs will go up.
Unfortunately, things aren’t as simple as that. Once the net neutrality is gone, the telecom not only has a new revenue stream from you in the form of tiers, but it also has a new revenue stream from content providers like myself, Amazon, Netflix or any other internet content you consume. The telecom would not only throttle your consumption, but they would also throttle the delivery of my blog to you, unless I agree to pay for premiere access to you. The telecom, is now making money from you, the viewer and from me, the content creator. You see why the telecoms are chomping at the bit to end net neutrality?
But, it’s still not that simple because the end game is growing the revenues for the telecoms without forcing them to grow subscribers. Telecoms like Comcast aren’t just internet pipe providers, they also create and sell content. Comcast owns NBC Universal. NBC Universal owns NBC and Telemundo among other entertainment and news cable networks. AT&T wants to own Time Warner so that AT&T can get access to CNN, TNT and HBO content. The media networks are content that the telecoms can sell.
But you like Netflix, right? If you happen to be stuck on Comcast, who do you think Comcast would give preference to on their data pipes? NBC or Telemundo content that they make money off, or Netflix that uses their data pipes to deliver their content to you?
For the telecoms, the abolishment of net neutrality not only allows them to offer preference to their content, but now they can charge Netflix for the privilege of delivering a movie to you. Guess who pays that bill? That would be you. But more insidious is how the telecoms have now given themselves, not one new revenue stream, but many more without having to increase their data pipes or look for more consumers.
See why they love abolishing net neutrality?
Don’t think it’ll happen? Notice how the cable providers are now offering a la carte services to you. Want basic cable, no problem, that’ll cost you $29 a month. Want HBO or sports channels no problem, that’ll be another $9.99 a month each. And so on. Before long, your $29 a month cable bill is now costing you upwards of $70 a month as you add a la carte services.
But that’s good, some of you may be thinking, why should I pay for a sports channel I don’t want. Have you tried contracting a channel you specifically want without paying for other channels you don’t ever watch? That’s because the cable providers bundle low performing channels with the ones everyone wants so that they can charge you a $19.99 a month service fee and call it a savings bundle. A true a la carte service would allow you to pick only the channels you want at an affordable price. But the cable providers know that allowing you to choose a channel or two would kill off all the other channels few viewers watch but worse for them, their revenues would drop as they won’t be able to offer you “savings bundles”.
Another example is your cellular provider offering you unlimited data plans but as you read the fine print you note the language telling you that the cellular provider “may throttle your services in times of high usage,” or “after you reach a certain threshold” that many don’t define.
As you can see, the telecoms already have a working model. They just need to get rid of net neutrality to go to town on your wallet.
The end of neutrality means you will pay more just to use the internet.