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ICYMI- The Loss of Net Neutrality Would Put Brands, Consumers in ‘Uncharted’ Internet Territory

Brand Channel
The Loss of Net Neutrality Would Put Brands, Consumers in ‘Uncharted’ Internet Territory
Posted January 16, 2014 03:58 PM

A bunch of bright, shiny, new toll booths may soon be erected on the information superhighway and it doesn’t appear there is much consumers can do about it.  A federal court ruling on Tuesday that struck down “net neutrality” rules would allow companies like Verizon, Time Warner Cable, AT&T and other internet service providers to change the way they treat different websites.

The ruling, in favor of Verizon, means that one site may be allowed to load content faster while another’s is slowed down. Such a situation means that consumers and companies may be paying more to get what they have now: the ability to travel to any site and expect it to download high-quality content at the same speed, the so-called “open Internet.”

What’s been called “net neutrality” may soon be disappearing, which isn’t a good sign for brands like YouTube and Netflix, whose businesses are built upon serving up high-quality video content at fast download rates for little to no cost to consumers. It is good for the aforementioned web-service providers, though, who can surely find new ways to pad the growing amount of consumers who pulled the plug on their cable providers so they could do all their TV watching online.

The ruling by a federal appeals court said that “the FCC doesn’t have the right to enforce” net neutrality rules put in place back in 2010, CNN reports. “The court said that the government is tasked with overseeing crucial utilities like telephone service and electricity, but that the Internet isn’t considered to be one of those utilities under current law.”

As a result, service providers could start offering consumers the option to upgrade their connection speeds—for a steep price, of course. Net neutrality advocates, such as the FCC, “will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression,” FCC Chairman Thomas Wheeler said in a statement.

The Internet Association, a group that represents internet brands like Netflix, said in a statementthat it, too “supports enforceable rules that ensure an open Internet, free from government control or discriminatory, anticompetitive actions by gatekeepers.” The group said it would continue to work with the FCC and policy makers to ensure internet freedom.

If this decision truly marks the end of net neutrality, “It takes the Internet into completely uncharted territory,” Tim Wu, a Columbia University law professor who coined the term, told the Wall Street Journal.

Unfortunately for Netflix, which just received its first Oscar nod, news of the potential slow-down caused the company’s stock to fall precipitously. Among its video-streaming sisters, including YouTube, Hulu and Amazon Prime Instant Video, Netflix has by far the largest appetite for bandwidth, accounting for nearly a third of downstream traffic in North America.

According to Mashable, analyst Michael Pachter estimated that Netflix could see annual fees of anywhere from $144 million to $936 million depending on how much service providers charge for bandwidth if the ruling sticks.