Net Neutrality – What Is It, What’s Happening and What Do You Need to Know?

There has been a lot of talk about net neutrality recently. The Federal Communication Commission seems poised to allow large companies like Amazon, Google and Facebook to pay extra for a sort of fast lane on the information superhighway. That long-awaited decision has a number of important implications for Internet service providers, for online startups, for established companies and for ordinary consumers.

What the eventual outcome of the net neutrality debate means to you depends on who you are and how you use the Internet.

The term net neutrality gets bandied about a great deal, but many consumers are still unsure what it means. The term is used in a number of different ways but the most common definition refers to an Internet in which every packet of data is treated the same, no matter who sent it or where it is going.

In a net-neutral world, a data packet sent by web giant YouTube would get the same treatment as a data packet sent by Bob’s Video Service. Both video suppliers would be on equal footing, and the end user would theoretically get the same experience watching a YouTube or Bob’s Video Service clip.

In the real world, the viewer experience would be affected by any number of outside factors, from the speed of the user’s DSL or cable Internet service to the quality of their computer, smartphone or tablet. Despite these differences, however, the actual data packets are transmitted in a neutral fashion.

If the new FCC rules go through, this neutrality will be a thing of the past. Under the proposed regulations, companies will be able to pay Internet service providers a fee for faster transmission. In theory, both YouTube and Bob’s Video Service could pay this extra fee and get preferential treatment for the data packets they send. In reality, however, a startup like Bob’s is unlikely to have the necessary cash, and that could give net giant YouTube a decisive edge.

To the consumer, this means that YouTube videos will be easier to watch and less of a hassle, and that could leave future startups in the dust. In fact, one of the main arguments against the new FCC regulations is that it will kill future online innovation. The critics point out that companies like Google, Facebook and Amazon all got started in a net-neutral world, and that the demise of net neutrality will make it much harder for modern startups to get a foothold in a competitive marketplace.

Proponents of the new FCC rules tout the potential benefits for consumers, including a better viewing experience and more value for the money. The point out, for instance, that Amazon Prime subscribers will get faster video streaming and experience fewer problems watching the movies and television shows they are paying for. They also point out that the sheet volume of video streaming taking place over services like Netflix and Amazon demand a faster transmission stream.

Only time will tell whether the critics or proponents of the new FCC rules are right. As with so much in the world of business, the end of strict net neutrality will create both winners and losers. Companies around the country are already preparing for the new regulations and positioning themselves to compete in the new online world.

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