The Federal Communications Commission voted last Thursday to repeal its net neutrality rules. The net neutrality rules prevented broadband providers from blocking, slowing, or imposing unfair billing practices that target specific web sites and services. Of course, this FCC decision is bad for end user choice. But what is the effect on innovation? The answer is not a happy one. Although they all publicly came out against it, Facebook, Google, Netflix, and Amazon might actually benefit from the FCC repeal of Net Neutrality. Their costs will go up but they will become entrenched and their competition will be suppressed. It makes you wonder if their stance on net neutrality was genuine or just PR rhetoric.
The end of net neutrality will not just mean added cost for consumers. It will also mean new fees for internet content providers, such as Facebook, Google, Netflix, and Amazon. Without net-neutrality, broadband providers like Comcast, Verizon, and AT&T, will simply charge tolls on these large content providers, to send their content and streaming data to the end users. Facebook, Google, Netflix, Amazon, and the other big content providers have ultra-deep pockets. So, they can afford to pay these new tolls. But new smaller startup content providers will not be able to compete in a world of high toll costs. So, the big players are protected because new competition will not be able to afford costly pay-to-play schemes.
This will hamper innovation. Web sites like Steemit.com and decentralized projects like Bitcoin will be suppressed. The dominant players of the status quo are always cowards in the face of new innovation and new competition. Indeed, the post-net neutrality internet is a Cowardly New World.