The Politics of Net Neutrality and What You Haven’t Heard

net neutrality

Net Neutrality has been presented as a set of rules intended to preserve the freedom of the internet.

It regulations as they have stood to this day, have prevented Internet Service Providers (ISPs) from interfering with internet traffic to slow down or limit data in any way. In the simplest terms, it means that consumers get access to sites A, B, X, and anything in between, without the ISP halting, manipulating or slowing the traffic.

It has been a contentious issue since President Trump took office, with the government seeking to repeal Net Neutrality and deregulate the internet market. The Democrat party and a very small minority of Republicans have criticized the move to repeal net neutrality, but is this politically charged issue as serious as the mainstream media makes it out to be?

Advocates of net neutrality claim that the repeal will mean that ISPs can start limiting traffic based on preference, commercial contracts, and political views. Consumers are worried that ISPs will start increasing prices and limiting speeds for popular services like Netflix. Some politicians have argued that ISPs could outright block access to perfectly legal content if it doesn’t conform to their business interests.

A major change in the political landscape was made this week, when the entire Democratic representation of the Senate voted for a bill that would overturn the repeal of it. Joining them were three Republican senators, which made the vote 52 to 47. Although the bill is unlikely to pass through the Republican led House of Representatives, this is still an important event in the ongoing Net Neutrality saga, mostly because it allows us to stop and look at why removing it might not be such a bad thing.

Net Neutrality, Republicans and the FCC Have Failed in Their Messaging

FCC Chairman Ajit Pai said this week “It’s disappointing that Senate Democrats forced this resolution through by a narrow margin, but, ultimately, I’m confident that their effort to reinstate heavy-handed government regulation of the internet will fail.”

Why are the Republican Party, IBM, Cisco, the FCC, and many tech industry innovators against Net Neutrality?

It comes down to competition…

Those who want to repeal the rules have said that Net Neutrality stifles competition and prevents innovation and infrastructure investments. If companies are forced to compete based on overbearing legislation, then they have no incentive to develop better products or improved internet infrastructure.

In an open letter to Senate and House representatives in 2014, companies like IBM, Alcatel-Lucent, Panasonic, Qualcomm, Cisco, and many others addressed the Net Neutrality regulations that were being proposed at the time. The letter said that there would be reductions to the “billions of broadband investment driving other sectors of the economy forward”, and that Net Neutrality regulations would “stifle growth across the entire economy.”

Fast forward to today, and those same companies and other industry innovators are still worried that without eliminating Net Neutrality, the market will simply stall as internet providers fall into a status quo with no real motivation to innovate and with no ability to differentiate their products.

To many, Net Neutrality won’t allow for a free and fast internet, because it provides no incentive for companies to move forward. Unfortunately, the opponents to Net Neutrality have failed to communicate these ideas to the public in the recent past.

This Is Not a Case of Greedy Corporations Seeking Freedom to Exploit Consumers

When looking at the situation objectively, it’s clear that Net Neutrality is more complex than what mainstream media has let the majority of the public to believe. There is actually clear value to removing Net Neutrality and allowing for a free and competitive market.

The average investor could benefit from the elimination of Net Neutrality policies. Some examples of publicly traded companies that would likely gain from the end of Net Neutrality are:

  • Cisco Systems Inc (NASDAQ: CSCO)
  • IBM (NYSE: IBM)
  • Qualcomm (NASDAQ: QCOM)
  • AT&T Inc. (NYSE: T)
  • Comcast (NASDAQ: CMCSA)
  • Verizon (NYSE: VZ)

This will continue to be a hot political issue, even when the House of Representatives inevitably quashes the Senate’s objection to the repeal. It can be strongly argued that the free and open internet is best left to innovation and competition, and it regulations (as they have existed so far) are not conducive to a profitable outcome for consumers, investors, and the ISPs themselves.

 

The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

 

The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

You May Also Like