On 21st November the FCC (Federal Communications Commission) in the US announced plans to repeal Net Neutrality rules. This is the beginning of the end for Net Neutrality legislation in the US. There will be lobbying, appeals and counter appeals but this looks like it going to happen. Looking at the reporting of this move, the media see this as benefiting telecoms services providers. The New York Times led with the headline “F.C.C. Plans Net Neutrality Repeal in a Victory for Telecoms”. In the UK the BBC’s reporting said that “the change is seen as a major victory for the telecoms industry”.
The internet companies like Facebook, Google and Netflix argued that Net Neutrality was needed to enable an open internet and by letting telecoms service providers have control over access to all services made for an uneven playing field. The telcos say that the rules prevent them from offering a different range of services to consumers at higher and lower prices. Part of these controls to differentiate services include variable pricing for different services. The most visible example of this is zero rating. But telcos have been zero rating services for a long time. In the summer there was almost zero rating arms race in Europe. This followed a Dutch court’s decision to allow T-Mobile Netherlands to zero rate its music service, as this wasn’t against EU Net Neutrality legislation. Also in the US, the FCC has been allowing zero rating of services on case by case basis. As for the other control – prioritising certain traffic over others. It will be interesting to see how this plays out. Telecoms services providers already have the policy systems to enable this to happen. Up until now, traffic prioritization has been used to help manage network congestion.
The relationship between the telcos and the internet companies has been interesting. The large players in both camps have been looking into expanding their interests. Facebook and Google have their solar powered planes / drones and balloons to provide Wi-Fi access. Google has also had its Wi-Fi first MVNO Project Fi running for a couple of years. On the telecoms side some of the bigger players are becoming media companies. They want to own and manage the content that will drive traffic over their networks and provide compelling content for their customers. But not all telcos can go out and buy media companies. For most this means partnerships with internet providers and content companies. Internet companies like Netflix and Spotify have developed many partnerships with mobile telcos. These partnerships have been successful and provide an extra route to market and new customers for the content players.
Meanwhile the telcos know that data is a commodity and that they have to change. If they can better use their networks to attract new content partners and use their BSS to offer flexible pricing on certain content, then that is good for the telcos and it’s good for their content partners. This enables differentiation and customer choice. The telcos need the internet and content companies to drive usage and provide services that customers want to use. The internet and the content companies need the telcos to provide the mechanisms to deliver their service. Now, with the end of Net Neutrality the telcos can be creative in how they package, market and offer this content. This will open doors for wider internet adoption. Free services and sponsored services can be rolled out without the worry that net neutrality legislation has been breached.
While the FCC rules only apply to the US, it will be interesting to see what happens elsewhere and if any news comes out from the European Commission. In the meantime, telcos need to have a look and see if their BSS is up to scratch to meet these changes. Marketing departments will be looking to get creative in how they price, package and promote content and services in the light of the end of Net Neutrality. Last thing a telco needs is IT saying that ‘billing’ can’t handle these requests for another 12 months.