Under President Donald Trump’s administration, the new chairman of the Federal Communications Commission, Ajit Pai plans on deregulating of net neutrality rules. If approved, this could change not only the world, but particularly the U.S. economy.
Currently, internet service providers like Verizon Wireless and Spectrum are required by law to treat all of the internet’s data with equality. They are not allowed to block content or slow down internet speeds on different websites. The concept of pay-to-play, in other words, is strictly forbidden. These internet service providers fought against net neutrality ever since it was established.
Under former President Barack Obama’s administration in 2015, the net neutrality rules were approved by then FCC chairman, Tom Wheeler. According to The New York Times, Wheeler said that the FCC passed these rules in order to preserve the “core of free expression and democratic principles.” It is clear that the previous administration acted more on behalf of U.S. citizens as opposed to the current administration acting in favor of big businesses.
The underlying debate that exists in this situation is between freedom of speech, which the net neutrality rules protected, and the choke on the free market.
Many U.S. citizens treat the internet as an essential part of their lives, especially the younger millennial generation. This is the first group of people who would suffer from Pai’s successful execution of deregulating net neutrality. Under Obama’s administration, there was a strong belief that the internet was very important and should be public. The government also viewed the internet as something that was too big and significant to let internet service providers control.
Individual consumers have been driving e-commerce through the roof in the past few years. They surely would not be happy if their basic internet plan did not allow them to order their clothes or groceries online. According to the Times writer Tiffany Hsu, research from a Google subsidiary suggests that visitors who have to wait more than three seconds for a mobile site to load will abandon their search 53 percent of the time.
Small businesses and entrepreneurs would also suffer from this. Relating back to e-commerce, business owners who just made the transition onto online platforms and maybe even run their entire businesses online will see an increased overhead expense which consequently lowers their profitability.
With the rise in popularity of freelance apps like TaskRabbit, or websites for freelancers such as Upwork, this change will be detrimental to simple individuals who take part in the gig economy – those who utilize these services.
These groups of people will fight against Pai’s actions in order to protect themselves and stand for their freedom of speech. For some of them, it will not just be a matter of adjustment. The decision on whether or not net neutrality rules will stay in place can cause small businesses to close down. Laying out the money to get the best internet may not be a problem for giants like Google or Amazon.com, Inc. However, smaller businesses will see this as a great threat to them.
On the other hand, proponents of deregulation of net neutrality are big internet service providers. Verizon Wireless and Spectrum, for example, are companies that would definitely like to be able to decide how much internet they provide. Other than the possible profitable approaches to offering internet, internet service providers believe that this will give them the opportunity to fit their customers’ needs better. Some consumers do not need really fast internet and the ones that do should be willing to pay for it.
This change will also allow for more of a free-market economy. The current net neutrality rules limit what the internet service providers can offer. However, if these rules are lifted, internet providers can offer different service packages. Dimitri Laloudakis, a student at Baruch College, offered a strong opinion on the topic with his capitalistic approach.
“If you want something faster, you pay for it. This is not a new concept. Why are people opposing the lift of these net neutrality rules?” he asked. He went on to add an analogy to explain his point. “It’s a standard business practice. Just like in an airline industry, you can either pay to fly coach or pay more to fly business class where you’d have more comfort. It’s the same with Verizon giving you the option to have fast or slow internet.” Laloudakis also commented on the monopolistic setting in which these internet providers can abuse their market power. He believes that “the government should limit its interference with businesses in order to promote innovation and competition.”
The repeal of net neutrality regulations can close some doors, but it may open numerous others, with a wealth of opportunities for both future consumers and businesses.
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