Net Neutrality

Net Neutrality

Internet service providers (ISP) have a challenge on their hands.  Currently, they have provided broadband at a neutral price to the market, despite that each consumer is using a different amount of broadband each month.  If we compare an electric company to ISPs, would it be acceptable for a 10,000 sg ft McMansion to pay the same amount as a 800 sq ft condo?  Most people would agree that a McMansion should pay for the amount of energy used vs. a flat rate.  So, why is it different with broadband?   It is not.  However, the challenge is that, like electric companies, there are merely one or a select few suppliers.  This creates conflicts of interests that require the government’s involvement to insure that monopolistic strategies are not unfairly influencing or threatening other businesses that operate on the Internet.  An interesting example is AT&T may want to prevent Skype traffic on its Internet connections in order to force customers to use the AT&T cell network (Laudon & Laudon, CH4 Case study, 2014).  Clearly, we need the Federal Communications Commission (FCC) involvement in order to maintain a fair market. Certain services such as YouTube or Netflix that use a significant amount of broadband should start preparing to address how they will change their pricing models in anticipation of higher broadband costs.  A large portion of YouTube or Netflix profits could be credited to them being able to take advantage of net neutrality.   At some point, broadband will need to be adjusted to fairly account for usage, specifically by for-profit businesses.

How does the consumer continue to get a fair service without a fear that broadband prices will sky rocket?  Many people fear that by removing Net Neutrality, the retail consumer will be forced to accept slower internet speeds as described in Moyers & Company: Is Net Neutrality Dead? . Moyers and Company's opening comments that the elite will be able to buy his or her way to the Internet while leaving everyone else behind is extreme (Moyers & Company, 2014).   A more realistic model would be for a commercial wholesale pricing structure and a retail pricing structure.  This model will allow start up companies, consumers, and non-profits the ability to continue to have economic options, as their broadband use is minimal in comparison to companies like Netflix.  Allowing the ISPs to charge larger companies that are profitable and using mass amounts of broadband is a fair proposition.   

References      

Laudon, K. C., & Laudon, J. P. (2013). Chapter 4, Case 1 What Net Neutrality Means

for You. What Net Neutrality Means for You , 13 , 13. (S. Wall, B. Horan, & A. Bradbury, Eds.) Pearson.

Laudon, K. C., & Laudon, J. P. (2014). Management Information Systems (13 ed.). (S.

Wall, B. Horan, & A. Bradbury, Eds.) Upper Saddle River, New Jersey: Pearson.

Moyers & Company: Is Net Neutrality Dead? Films On Demand. Films Media Group,   

2014. Web. 24 Jan. 2015