What does it all mean?

as I was reading this article by Nate Anderson on Ars Technica, I feel it is important to point to some of the truths and possibly dispel some falsehoods regarding net neutrality. (also cheers to you Nate for presenting a surprisingly even handed article about something so divisive...not net neutrality, Glenn Beck).

Everything seems fine now, why are we changing the laws if the internet seems to be working just fine?

Yes, everything is fine.  Moreover, everything already seems fair and, all-in-all, working properly.  And while a lot of this likely comes down to power grabs and greed (see my post from yesterday), we've come to a point where it has to change.  Not for the better, mind you, but because the major players (telecoms and the FCC) now know what their real limitations are. Now this is conjecture, but I have a distinct feeling that the reason the telecoms have not engaged in any quality of service since the FCC told Comcast to stop a ways back.  I know what you're thinking; "but the courts told the FCC they can't do that, why wouldn't Comcast just go back to picking and choosing what packets get what bitrate?".  Its because the FCC now knows they don't have that power yet, not that they won't have it.  I'm pretty sure that all the telecoms are in a "wait and see" business model right now where they aren't doing anything questionable until they have a better handle on whats coming next for them.

Okay, okay, but still isn't the government going to control and censor the internet like they do with terrestrial radio and broadcast television?

Again, this is mostly conjecture, but realistically the answer is no. The latest information from the FCC on the power they are looking to get from new legislation is outlined in this article and then straight from the horse's mouth here.  While we won't know as many exacts as we would like to until actual legislation is written for a vote, its seems safe to say that they are not interested in getting into the affairs of regular people or bloggers, but rather how broadband is managed.  Yes, I'm sure there will be some mostly unsavory bits to what the FCC will plan on doing, but the same can be said for any change thats coming down the pipe (and yes I'm positive about that).  I know it sounds like I'm backing the FCC all the way here, but rest assured I am really trying to dispel rumors and falsehoods, not back them for anything they plan on doing (also I will have a new post soon detailing the info the FCC has put out so far about net neutrality). 

Fine, whatever, why is this on a blog meant for marketers then?

Well, a few reasons.  First is that as I said in the first place, to have any sort of grasp on net neutrality's effect on marketers, we all need know more about the legislation itself.  Secondly, the main "organization" fighting against net neutrality legislation, Americans for Prosperity - who apparently are big on Glenn Beck's program judging from that Ars Technica article -, have launched a $1.4 million ad campaign against it and I thought the cross-over was too juicy not to bring it up.  The only reason I find this worth mentioning, then, is to be careful of any misleading information coming in through these messages they are crafting.  the group, whose backing information can be found here have most of their financial ties to companies that support republicans and right-wing agendas for good reason.  Not saying there is anything wrong with that or any of the points will be trying to make, just be aware that they (like almost every single organization out there that you ever hear about on political issues) are really not much more than lobbyists.  Though be on the lookout for when their ads start getting air time because I will take a critical look at it when I get a chance and likely hit up a teacher of mine who both leans right politically and has experience with advocacy campaigns to get his thoughts.

Yeah, so really why?  I'm in marketing, remember...

Fair enough - If I'm wrong and the government does have an interest in censoring the internet, there could be much more restrictions on how you advertise depending on who the target is and/or who tends to visit the sites you are advertising on.  This article, for instance, talks about how the Obama Administration (specifically the first lady) want unhealthy food marketing to children completely curbed (currently fast food chains et al  are their own watch-dog and have tried to institute some marketing regulations regarding messaging for kids).  Right now, this relates mostly to traditional marketing, but should the FCC gain the power to regulate messaging online, then marketers for places like McDonalds and BurgerKing would be at the mercy of the government.  Again, though, it doesn't seem as though the FCC is trying to gain the power to control content online so much as the power to oversee the management of how the content is delivered.

Corporate interests - This is where it gets more interesting

Okay so I've said before that ISPs like Comcast, AT&T and Verizon have fallen very squarely on the side of not wanting any regulation (against net neutrality) and content providers such as Google and Yahoo have fallen (mostly) on the side of supporting regulation (pro-net neutrality).  For the purpose of this post just so you understand, ISPs refer to the three mentioned above and if I refer to either Google or content providers assume it refers to the whole corporate group supporting net neutrality legislation.

What it comes down to for each of these groups is greed (as well it should since they are by their very definition interested in making more money and/or saving money above all else).  In this specific instance, it tends to be that the ISPs are interested in making more money and the content providers are trying to save more money (or at least not have their costs of doing business rise).  Where the real point of contention here is is in the ISPs interest in "owning" the transmission of content to users.  By this I mean that ISPs see themselves as not only providing end-users with content for a fee, but also providing access to those end-users to content providers for free.

For the ISPs, then, if net neutrality passes, this new business model is an impossibility, whereas if they are granted full ownership and self-regulatory power over their networks then it is completely possible and, in my opinion, likely that they would follow through with this.  Obviously, as this means higher costs for the content providers, they have fallen on the side of pro-net neutrality so as to keep the status quo in this specific instance. 

Now where marketers and consumers come in can be extremely disruptive to the status quo no matter which way things end up with net neutrality.  Should net neutrality pass, marketers will surely have some changes that I will better detail in posts yet to come, but the ISPs have threatened to change billing models to go back to metered.  This will undoubtedly cause lower usage of the internet.  For marketers, this could very well be a game changer as we have been led to believe for at least a few years that internet marketing in some way shape or form is the future of marketing (when compared to traditional advertising like television and print ads).  In all likelihood this will have similar effects on mobile markets too, but, again, I will try to better detail that in a later post.

If net neutrality doesn't pass, Google will with all likelihood pass on their new costs to those that pay for their services...marketers.  While consumers may not see too much difference at least at first, marketers using things like Google AdSense will likely see increased costs of doing search marketing and other services through content providers.  I have more on this, but in an effort keep this post from droning too long I'll touch on more issues soon.

This is pretty big

I'll go into this more later but an Electronista article that can be found here goes very much into the follow-up to what the FCC is doing since the Appeals court finding that they were overstepping their bounds in the recent Comcast case.

You might remember I have spoken at some sort of length that unlike how most of the news was covering it, that court decision wasn't really a blow to net neutrality so much as letting everyone know that it simply doesn't exist in the way things are now.  It didn't say anything about it becoming a reality down the line.  And, apparently based on the article linked above, it looks like the FCC is doing their best to move it that way.

So, just to recap some of the other stuff I've told you, the FCC a handful of years back declassified internet as a communication medium...meaning they were no longer the overseers of its content and how companies used it...it was to be self-regulated, more or less. Now the FCC appears to be looking to undo that change of classification that occurred during the Bush Administration to regain control over the internet.

There is a lot here specific to each of the corporate and government interests involved, but I should have anew post out very soon first giving an overview of corporate interests on both sides and how that will really really hit marketers, and then where some of the individual interests have altered slightly over time and what their interests mean to both marketers and consumers assuming they win the argument.

More on the Basics - or Part II if you like

Okay, so in the last background on what net neutrality dealt with, I spent most of the time talking about Quality of Service (QOS), or essentially a telecom's self-designated right to determine how much service, or bandwidth, they will give to specific end-users, content or services...basically meaning that if they decide it so, they can block access or throttle back bandwidth for various functions on the internet.  They have their reasons for what they have done so far, more or less to ensure enough available bandwidth that everyone can access most stuff they need/want to do online, but there are also the great fears of what that means they can do (block competitor's sites or whatever they want really).  FYI, this is also sometimes called "data discrimination."

SO now that that has been established, let's move on to the next topic, namely the term "common carrier."  The FCC, as you now really, really know thanks to DC Appellate courts recent ruling (see previous post for more details), has no power to regulate the internet, why they don't is because the internet is not currently considered a common carrier in the U.S.  Things that are common carriers are telegraphs (yeah I know, who couldn't live without it), the telephone, broadcast airwaves (TV and radio), and some others.  Basically it pertains to major open communication sources (hence the federal communications commission), but carries the same meaning as transportation methods of the same name has.  When Taft was president and new bathtubs were being installed in the White House, he (after congress told him to) declared that telegraph, telephone, and radio were to be treated the same as the railroads (which were considered...yes, common carriers). Basically, that meant that those same methods of "travel" were to not discriminate who can use their service or how they can use it (within the law and safety concerns obviously) and were not to charge exorbitant prices as they had become necessary in a society dependent on them for whatever service they provided.  Okay...there thats common carriers, please modernize as necessary.

As a result of some of Bush's (W not HW) programs, high-speed internet (sort of considered a common carrier, but really not at all labeled) was given a different title of "information service" a little while back, due, at least in part, to the fact that the lines of communication were no longer FCC controlled lines (phone lines), but now cable or DSL lines (which yes, still transmit most often across telephone lines but how the data is transmitted is different enough to be considered separate).  Additionally, as an "information service" it basically meant that the internet didn't have a prime purpose of communication, but information and hadn't become so ingrained in society that it couldn't exist without it.

Now, in this article from Slate (which you'll notice I've already taken some info from), you see a pretty standard argument for net neutrality on legal grounds.  Points such as the internet progressing to not only be a standard for communication in this day and age, but also a necessary part of day-to-day life for most Americans is the basics of what they are saying.  I can't swear by this, but I would expect to see more info thrown around like this once actual legislation for net neutrality hits the floor of Congress.

I'm pretty sure most of the conservative out there who have already made up their minds are not buying much of this (it's okay, I generally look at everything I've posted about government regulation of the internet a little spuriously too), but this is probably the most interesting part.  The Bush administration reclassified internet as an information service in an attempt to increase competition (one of the original ideas behind the classification of "common carriers" in the first place), but since the classification, the internet service provider industry has actually decreased in competition yielding to the largest companies like AT&T, Verizon and Comcast.  So there's that.  Either way, I'm not sure returning it to FCC regulation will fix that issue, just an interesting tidbit.  Okay, so thats about it for common carriers v. information services.

As I said before, please comment with disagreements or questions.  I can only better understand this topic if I know how others are looking at it too.  Thanks.

 Next up I will deal with the major players and why their interest in net neutrality is what it is.

FCC Announces National Broadband Agenda

I'm not sure if this is in response to the recent court finding in favor of the telecoms, but I have a feeling it might be (please note this is entirely speculative).  I'll get into what exactly the headline means in a bit, but first I wanted to clarify something from the post relating to the recent court finding in favor of Comcast.  The decision to not allow the FCC to stop Comcast from throttling back the bandwidth for certain users or certain services is not really a knock against net neutrality.  Basically what the courts were saying is that the FCC in its current power to regulate, cannot stop Comcast from any QOS actions.  However, net neutrality is going to be a bill trying to pass through congress that would give the FCC such power.  Now with regard to the news:

The FCC's National Broadband Agenda is one of the cornerstones of their interest in net neutrality legislation.  Basically, they hope to subsidize broadband internet access making it available to anyone and everyone.  Please note this is not at all their only interest in net neutrality, but this is basically at the top of their marketing plan as it is the one most likely to garner support both from the masses as well as from democrats in congress for when the bill finally does make it to the house floor.

The article (which is from GovTech.com and can be found here with an older article on the national broadband plan itself here) speaks on the actual schedule the FCC has laid out for implementation as well as their overall intent for the program (links to where you can find these at the end of the post).  The FCC, who refers to the program as the "foundation for economic growth, job creation, global competitiveness and a better way of life," lays out some of the main points of its plan thusly (info from FCC press releases in green, my points about how it will affect marketing in black):

• Connecting 100 million households to affordable 100 Mbps service, building the world's largest market of high-speed broadband users and ensuring that new jobs and businesses are created in America.
• To Marketers: Realistically this point centers more on the ways their plan can stimulate the economy.  Frankly I'm skeptical of any plan that claims to be able to fix the economy, but assuming it at least helps, then it should also help more marketers...more money in the public means more ears and eyes willing to join in the dialogue you are trying to start.  No one needs to hear this from me, but basically it will make our jobs easier because more people will have money to spend on the products and services we are trying to market.
  
• Affordable access in every American community to ultra-high-speed broadband of at least 1 GB per second at "anchor institutions" such as schools, hospitals and military installations so that America is hosting the experiments that produce tomorrow's ideas and industries.
• To Marketers: At its base this might not seem like it will affect most of you, certainly not if you work in the private sector, but it actually does quite a bit.  Both sides of the argument are claiming that higher internet speeds are only possible if you take their suggested course of action (support/oppose net neutrality).  Google is trying to make sure this happens either way, but that's for another post.  The fact is, higher internet speeds will mean a lot to marketers here in America as higher speeds will likely mean more that a browser and the subsequent user's computer can handle.  Basically it will allow for greater innovation when it comes to what we can do online to show-off our products in any way (HD streaming video, etc.).  Not to mention it will likely drive internet use way up and create larger audiences for your content.  Either way, this potential is a long way off.   
• Ensuring that the U.S. is leading the world in mobile innovation by making 500 MHz of spectrum newly available for licensed and unlicensed use.
• To Marketers: If you are one of those marketers that sees mobile devices as the way of the future for marketers (hint: you are right and everyone else is wrong) this one is huge. I am expecting this is intending to further cover the nation with 3G (which is supposed to be part of their plan).  While this wouldn't do anything other than allow for more use of mobile internet in more place, I am wont to believe that mobile developers would go barking mad trying to develop new applications and capabilities to better use this...marketing-based apps and capabilities would most certainly be part of this as well.
  
• Moving the nation's broadband adoption rates from roughly 65 percent to more than 90 percent, and ensuring that every child in America is digitally literate by the time he or she leaves high school.
• To Marketers:  In the short run, probably nothing.  In the long-run this doesn't point to anything positive or negative, and, quite frankly, it probably doesn't point to anything you didn't know already.  Everything is moving online, and, if the FCC is successful here, it will mean marketing will likely move more so online than already is too.  But this wouldn't be considered a success until many years from now and probably isn't much of something that the FCC would really have a part in anyway (other than helping supply schools with proper connections.
• Bringing affordable broadband to rural communities, schools, libraries and vulnerable populations by transitioning existing Universal Service Fund support from analog technologies to digital infrastructure.
• To Marketers:  Again, like some of the other points, this would merely increase an online presence across the U.S. and, subsequently, increase the potential audience for any online marketing plans. 
• Promoting competition across the broadband ecosystem by ensuring greater transparency, removing barriers to entry and conducting market-based analysis with quality data on price, speed and availability.
• To Marketers:  This one is for the telecoms (or more specifically, the people that are knowledgeable on net neutrality and are either on the fence or slightly opposed to it).  I have very little info on this right now, but plan on updating with whatever specifics the FCC is proposing that will actually do this.
  
• Enhancing the safety of the American people by providing every first responder with access to a nationwide, wireless, interoperable public safety network.
• To Marketers:  Again, this really won't affect you as a marketer too much, but its a functional plan...probably.

 The basics of this is that most of what they are proposing is set to expand the internet across the U.S. to be available to more people regardless of socio-economic and geographic status which would likely be a very good thing for marketers.  But please remember that this is the tip of the iceberg for when it comes to what realistic net neutrality plans are.  Please comment with questions or criticisms of what I'm saying here so that I can either expand on anything that needs it or recant and give praise where praise is due (namely to you). 
 

Comment responses

From Nick:

"You mentioned Email, but lets be honest, most spam filters are advanced enough to filter most ads out, I cant remember the last Ad I got on GMail, nigerian king or otherwise...we are going to have to step up our game to create a better relationship with our customers, more direct communication, deals for long term clients etc. A direction I feel we should be heading in anyway. The real trick is how to be both effective but subtle in how we communicate, phone calls are invasive, emails are annoying etc."

The point I was making with the E-mail comment has more to do with direct communication wherein the recipient's e-mail address wasn't obtained from random e-mail lists, but from somewhere the user actually signed up to receive e-mails as a form of communication from a company.  While it likely wouldn't change a lot, it has plenty of potential for change.  Additionally, because I am assuming you are relatively young and because you are a fellow farker I am assuming you are pretty comfortable with technology so you may not be aware of how many people out there still receive piles and piles of spam in their inbox everyday.  While I don't think it's an effective method of marcom either, its a very real option for a large number of marketers out there trying to reach the largest number of people possible with ease and a low budget.  Also, I completely agree with your comment about what it means for how marketers will have to function in the future, while an uncomfortable adjustment period will no doubt be involved it may very well help marketers create a better working relationship with their existent and potential customers.

From Rob:

"the idea of net neutrality is clearly just a way to protect consumers, is it not?"

Well, yes and no.  The fact is both sides of the argument tend to put consumers first, but have many other aspects to their side that is also very self-serving (think democrats vs. republicans, both look out for American citizens' interests first, but also have many other personal things they look at in legislation).  Partially it is as it is designed to give the FCC control over the internet as a communication medium similar to telephones (but likely managed in a way more similarly to television).  Much of what the FCC does is look out for the public's best interest in these situations, however there would be much more room for them over-stepping their bounds with no real legislative language (that I've seen yet) giving different levels of control over different content (i.e. broadcast television has to answer to the FCC, but cable and premium content only answers to its customers and advertisers).

There are many many underlying issues as to why the FCC, the current White House administration and various companies like Google and Yahoo are behind net neutrality, but one of the biggest the FCC falls back on is their plan for expansion of broadband (another topic I will delve into quite a bit more heavily in the future).  Essentially they want to push the increase of broadband capability as well as subsidize it in a way that makes it available to 100% of Americans no matter their geographic or economic status (which has some very positive potential for marketers, but again I will get into this more in the future)

A quick break from the basics

This news is too important not to share at least some of it right off the bat:

According to an ABC News article, a U.S. Federal Appeals court has sided with the telecoms and against the FCC on key net neutrality legislation.  The basic gist of what happened earlier today is that the courts decided that the FCC has no authority to stop any quality of service (QOS - see yesterday's post for more info) from happening on telecom controlled broadband.  In other words, the FCC is not allowed to stop telecoms and other broadband providers from giving preferential treatment (including completely blocking access) to specific online content or actions (such as BitTorrent downloads - I'll do a post about torrents at some point down the line if you aren't to knowledgeable on them).  

A lot of the court's ruling seems to be based on two things right now.  First, back in 2005 the FCC deregulated broadband essentially allowing for it to be owned, controlled and operated by the internet service providers (ISPs - can mean groups like Google and yahoo as they are providing an internet service, but in this post assume it's anyone providing an internet connection like AT&T or Comcast) who use them today.  The other aspect is that government agencies like the FCC don't have the rule of law on their side (though they're trying to change that through actual net neutrality legislation).  What they have is essentially the power to recommend when it comes to most internet activity as net neutrality is nothing more than a principle, not law. There is plenty more if you are interested in the political side of things and it can be read here.

I would like to shift real quick to talk about what this means for marketers without spoiling too many of my future posts or getting ahead of what I expect most marketers currently understand about the issue.  I will expand on all of this in future posts, but , basically, if internet remains regulated by the ISPs and not the government as this court decision leans, certain sites and the subsequent advertisements could be entirely inaccessible by large segments marketers are targeting. This is especially interesting, in my opinion, for the marketers employed by ISPs as their online campaigns could be getting screwed by the very legislation they are supporting (in this case it's actually a lack of legislation they are supporting, but you get what I'm saying).

Don't get me wrong, I'm in no way trying to sway your opinion of net neutrality.  If the FCC gains control over and subsequent capabilities to regulate the internet, there are any of a million scenarios that could equally hinder a marketer's ability to effectively communicate and market online.  This is likely especially true of e-mail marketing since it takes more of a direct and sometimes invasive approach to communicating with customers (think do not call registry only likely stronger as there will be proof of people getting contacted by companies).

Which is right and which is wrong?  I have absolutely no idea and probably never will (actually I feel like both sides are wrong, but I digress).  I encourage anyone to follow this story and comment to let me know if I'm missing anything or if they think I'm getting something wrong here.