In this new episode of The Digital Well podcast I explore net neutrality and how it impacts financial services. While it is a volatile economic and political issue, there are some fundamental risks as outcomes for any vertical industry. There are also a myriad of components of the issue that would take many hours to define – however in 10 minutes I discuss concerns for our industry.
The phrase net neutrality was introduced by Tim Wu, a Columbia Law Professor, eleven years ago. However the discussion has been going on for quite a while. It really hit the mainstream attention span in recent weeks with the Netflix-Comcast deal for premium handling of their video streaming, and subsequently a proposal from the FCC to allow these types of deals to become the norm. In essence, borrowing from an already popular analogy, creating a high speed toll lane on the Internet for those willing to pay.
Unfortunately, this toll lane runs some risks:
- This new environment driven by privilege based upon pay-to-play runs the risk of corruption, back-scratching and other unseemly issues.
- There is no regulatory or legislative mandate that once ISPs have highly profitable speed lanes, that they invest in the slow lanes for those who cannot afford to pay. And take note, this does not just mean impoverished users. This means vertical vendors in financial services, who if they find the slow lane performance degrading, and do not have the deep pockets of Netflix, Salesforce and others to invest a premium to change lanes, may see a decrease in their performance.
- Long term effect – the end user will subsidize through price increases from vendors they use who cannot afford to get in the fast lane.
- In my view, the Internet itself is a utility and more than a business tool. It is a global communications framework that connects families (a la Skype and instant messaging), non-profits and non-governmental organizations and more. This fabric weaves into our personal and business lives and powers nearly everything we do now.
Other concerns, such as ISP’s purposefully downgrading performance to land premium contracts, via The Verge.