The FCC vote on Net-Neutrality and it impacts developing countries
In a 3-2 vote, the FCC (The US Federal Communications Commission) rolled back the 2015 Obama-era net-neutrality rules. What does it mean for you?
Simply put, net-neutrality means regulating internet service providers (ISPs) like a utility: water, and electricity. Essential services like these are often expensive to build and lack the incentive to upgrade, creating natural monopolies that require regulation. The regulation would ensure equal access for all consumers to the internet without the ISPs prioritizing what is sent through those pipes at what speeds or in what direction.
ISPs own and maintain the infrastructure that provides internet service to consumers, and some of these consumers use disproportionately more bandwidth and data. Since ISPs cannot discriminate too much between consumers, my mom who checks her email once a week or a month pays the same price for internet service as my video gamer son who is playing online video-games. Less net-neutrality would allow ISPs to allocate price proportionate to usage, but will also open the door to other practices that will be discussed later.
Since ISPs have to swallow many usage costs, they are not incentivized to innovate in their field or strengthen their internet delivery. Some also claim that net-neutrality kills the competition in this sense, making it extremely costly to create an effective ISP.
Without regulations, ISPs can control and prioritize what information comes to a consumer and what information a consumer sends to the internet. In theory, they will have total power to restrict data from certain sources under the argument that the source is causing unnecessary stress to the network, a claim that is nearly impossible to disprove. ISPs can also prioritize traffic for websites or services that they own a stake in.
With a less neutral internet, ISPs will be able to collect, scrutinize, and sell this information. Although all personal information will be removed, many studies have shown that is very easy to pinpoint the identity of someone given their “anonymous” web history.
Without net neutrality in place, giant web-based corporations like YouTube and Netflix can pay extra money to prioritize their data through the pipelines and this slows down the data of emerging competition who cannot yet afford to pay the same price.
Net-neutrality effectively allows anyone to express their opinion on the internet. Without net neutrality, it will be difficult to monitor the existence of freedom of speech; views, websites, or content that stands at odds with ISPs or some of their biggest customers (large corporations, the government) could theoretically be censored without consumers even knowing.
If you are a business, you may have to pay ISPs to keep your website accessible and operating at a satisfactory quality. This will make it harder to launch and grow a new business and to compete with established companies.
A change in net neutrality rules may be a serious impediment to startups’ ability to grow and compete. For small businesses, the new and most important factor in marketing decisions may become bandwidth. High costs may start pushing these businesses towards offline marketing methods.
The following are the likely consequences startups from places in Ethiopia or Africa will face in the event that net neutrality is completely removed.
Entering the United States market via the internet will be difficult for businesses from developing nations. Given the “America First” mentality, it is very likely that ISPs will be encouraged to prioritize American content over international content. The startups of developing nations, who do not have the same financial resources and funds available to American startups, will have to pay the same expenses as their American competitors.
Why is this a big deal? Well, the United States online and e-commerce marketing channel is the most robust and most profitable in the world. The biggest names in all online industries must make their names in the US market, whether they are foreign or local to the US. The best online services, like the free telecommunication services of Viber, Imo, Skype, Google Hangouts, WhatsApp, etc., will obviously continue doing business in the US market even though they will incur the highest costs from ISPs. These costs will not be merely swallowed by these companies; they will be passed on to consumers, and not just consumers in the United States. The cost of net neutrality repeal will be passed on to ALL consumers internationally, making cutting-edge technology and essential telecommunication even more expensive and inaccessible to startups from developing countries. Thus, the repeal of US net neutrality will increase costs to internet consumers and businesses alike all around the world and hamper free communication.
Net neutrality repeals will also result in a less competitive online market. Businesses will not be able to topple these industry leaders or overcome these ISP’s monopolistic practices unless their own government bans any competition from US firms (think Alibaba and China). Developing nations do not have the resources or consumer population of a China or India, and will struggle to make a name for themselves without constructing some other competition barrier, which brings us to our next point:
Developing nations will be forced to enact similar anti-net neutrality policies as well, resulting in an even more restrictive, regulated, and ultimately toxic environment for their online startups and business.
All in all, the repeal of US net neutrality policies will have lasting implications on the global online market. The ability for any online startups to flourish will be significantly diminished; the likelihood for such startups in developing countries will be close to impossible.
Contributed by Samuel Alemu
Note: released first on Reporter English