Last week, the Newspaper Association of America said print advertising hit a 25-year low in 2010 and ad revenue is shifting to the Internet. Meanwhile, the financial success of Facebook and Groupon is sending investors online. J.P. Morgan Chase is creating a fund for Internet stocks. Solo investors are putting hundreds of thousands of dollars into high-tech accelerators.
Impact on businesses and consumers
My sense that big-hitters like Verizon, Comcast and AT&T feel intense pressure from the FCC to accept its terms, or go out of business. Verizon is taking the most aggressive response, filing a lawsuit challenging net neutrality regulations. Comcast and AT&T seem afraid to rock the boat too hard lest harsher regulations be issued.
A Comcast spokeswoman told me that Comcast is bound by net neutrality regulations for the next seven years, regardless if a court overturns them. Comcast agreed to these FCC terms in order to complete its January takeover of NBCUniversal.
Comcast will grow even larger if NBCUniversal accepts Blackstone’s recent offer to sell its 50 percent share of Universal Orlando. Anticipate a new Harry Potter attraction featuring “net neutrality” classes at Hogwarts.
AT&T’s recent Congressional testimony exposed its assessment that the FCC has out-stepped its legal bounds: “Since this debate began back in 2005, AT&T has consistently opposed any FCC regulation of Internet services or facilities. This is still our strong preference today. We feel the antitrust laws, the Federal Trade Act, and the discipline of highly competitive markets are more than adequate to police any potential abuses.”
Verizon CEO Ivan Seidenberg has said, “Proponents (of net neutrality) have a worldview that network providers and application providers, like Google, occupy different parts of the Internet: dumb pipes versus smart apps. This is a mistake pure and simple. It's an analog idea for a digital world. … You can’t create a smart economy by dumbing down the critical infrastructure." He also said that economic growth and development (think telemedicine) would struggle under the regulations.
Consumer costs will spike if corporations cannot act competitively and if they have to subsidize services to low-income users and rural areas. Quality will simultaneously go down if the free market no longer incentivizes corporations.
Give the government a yard now with net neutrality and it will throw for a touchdown. In January, Commerce Secretary Gary Locke released plans to create a government-run "identity ecosystem" or “national ID card for the Internet,” reports The Washington Times.
Net neutrality regulations are effective as early as midsummer, unless Congress or the courts intervene.
Stand up for free enterprise and innovation. Educate your friends. Voice your concerns to the FCC. Contact your elected officials.
Although the NFL is struggling to get its house in order, there’s no one quite as motivating as a passionate football coach. ‘Own this moment. Prevail.’