President Biden signed an executive order promoting fair competition, effectively reinstating net neutrality.
Back in 2017, a Trump-administration-led FCC repealed Net Neutrality. Ajit Pai was appointed to be the new FCC Commissioner in January by the former President, someone who openly did not support Net Neutrality. Despite public outcry in support of these rules, Pai obtained enough votes to repeal the act in December 2017. Last week, President Joe Biden signed an executive order regarding open and fair competition in several business sectors. The order effectively reinstates Net Neutrality, so what does that really mean?
First, let’s talk about what Net Neutrality is. Net neutrality basically says that ISPs may not intentionally block, slow down, or charge money for specific online content. Without net neutrality, ISPs may prioritize certain types of traffic, meter others, or potentially block traffic from specific services, while charging consumers for various tiers of service. In essence, there should be no bias, no preferential treatment to certain sites or services, everything is supposed to be on the same playing field. Seems fair, right? Kind of like how it’s supposed to be.
It was fair, and it was working just fine until it was repealed. Without the laws in place, big tech companies like Google and Facebook can pay ISPs to provide faster and more stable access to their sites over their competitors. Google and Facebook are purely examples of big tech companies in this instance, we have no direct or indirect knowledge that they practiced this tactic. But the absence of net neutrality allows this practice to happen, which hampers startups and small businesses from gaining potential customers because preferential treatment is given to larger corporations with deep pockets. And if ISPs accept these payments for services like Netflix, those costs will ultimately be pushed onto the consumer in the form of higher payments.
President Biden’s executive order impacts two areas we want to discuss: Internet service and technology.
For internet service, there are four problems to solve:
- Lack of competition among broadband providers. The order encourages the FCC to prevent ISPs from making deals with landlords that limit tenants’ choices.
- Lack of transparency. The order encourages the revival of the “Broadband Nutrition Label” and requires providers to report prices and subscription rates to the FCC.
- High Termination Fees. The order encourages limiting excessive early termination fees.
- Companies discriminatorily slowing down internet access. The order encourages the FCC to restore Net Neutrality rules.
For technology, there are also four items on the agenda:
- Big Tech platforms purchasing would-be competitors. The order announces an Administration policy of greater scrutiny of mergers.
- Big Tech platforms gathering too much personal information. The order encourages the FCC to establish rules on surveillance and the accumulation of data.
- Big Tech platforms unfairly competing with small businesses. The order encourages the FTC to establish rules barring unfair methods of competition on internet marketplaces.
- Cell phone manufacturers (and others) blocking independent repair shops. The order encourages the FTC to issue rules against anti-competitive restrictions.
Please see the White House fact sheet for full details on the executive order, including elaborations on what was written here.
What this all really boils down to is less control by large companies with lots of money, more competition for small businesses to have a chance at survival and lower costs with better latency for consumers. Many businesses will benefit from this and flourish. As with any new rule, regulation, law, etc., it’s important to ensure that your business is compliant with any rules that apply. If you’re not sure what that looks like, bring in an expert to help you. Compliance violations are not cheap, and while there’s still work being done here, ensuring you’re prepared before the laws are finalized is always a good plan!