You may have heard a lot about net neutrality over the past several months. Thanks to some new developments out of Washington, D.C. it’s making headlines again. While the topic is nuanced, many may still be wondering what exactly net neutrality is at its core and why there’s so much debate over it.
Net neutrality is a principle that all internet traffic should be treated equal. So whether it’s Netflix (NFLX) or a personal blog frequented only by close friends and family, the speed with which the content is delivered should be the same.
The problem is big internet service providers (Comcast, AT&T etc.) don’t agree that should be the case. Take Netflix. It is eating up tons of internet bandwidth thanks to millions of people streaming high definition videos. Comcast (CMCSA), AT&T (T) and others like them believe they should be able to charge Netflix for fast service to deliver their content effectively to the consumer.
Until now the FCC has sided with the consumer and has issued rules trying to protect net neutrality and stop the big service providers from creating those fast lanes. The courts on the other hand have sided with corporate America, striking down the FCC rules.
Yesterday the FCC reversed course and is reportedly sending around a new set of rules internally that would open up the possibility for the Comcast’s of the world to charge more for faster service.
So what does all this mean for you? Well it serves to reason that the average consumer will have to pay more at some point to enjoy the content they do today with the same level of quality. If Comcast or AT&T charge Netflix or Amazon (AMZN) more to stream their videos, it’s only a matter of time before Netflix and Amazon pass that price on to you. In fact they already have. Netflix, with it’s back against the wall, has already agreed to pay Comcast not to slow down its content, and Netflix just this week announced a price hike for new customers.
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