Posted By David Brousell, March 17, 2015 at 1:26 PM, in Category: Transformative Technologies
Are the Federal Communication Commission’s new ‘net neutrality’ rules governing the Internet a good thing or a bad thing for manufacturers?
At first blush, some manufacturers might feel that the FCC’s “Open Internet” rules, approved by the agency on February 26 by a 3 to 2 vote, are a step removed from them. The new rules prohibit broadband Internet service providers from blocking access to content as well as establishing so-called pay-for-play “fast lanes” for Internet access, among other provisions.
But, at a time when the business of manufacturing is becoming more and more technology-based, manufacturers have a direct stake in how the Internet is run. And the importance of the role the Internet plays in manufacturing today will become even more pronounced as connectivity expands throughout factories and plants, in products, and connecting manufacturers with customers via the so-called Internet of Things.
“Manufacturers essentially have become technology companies,” wrote Brian Raymond, Director, Technology and Domestic Economic Policy, at the National Association of Manufacturers, in a recent article on the NAM website. “They have leveraged the Internet to compete, deploy new technologies, connect with their workforce and their customers, reduce costs, cut waste, enhance the environment, and create safer, more reliable products.”
The new Internet rules, however, have provoked a predicable set of responses. The NAM opposed the FCC’s action, decrying increased government intervention in what it said had been the federal government’s market-based, pro-competition approach to the Internet in the 1990s. The NAM also claimed the new rules will stifle innovation and investment.
Other associations, including the National Cable and Telecommunications Industry Association and the Telecommunications Industry Association, also opposed the rules, with some saying there will be years of legal battles over the FCC’s decision.
“Today’s release of the Open Internet order only confirms our fear that the Commission has gone well beyond creating enforceable open Internet rules and has instead instituted a regulatory regime change for the Internet that will lead to years of litigation, serious collateral consequences for consumers, and ongoing market uncertainty that will slow America’s quest to advance broadband deployment and adoption,” said the NCTA, in a March 12 statement.
On the other side of the fence was the Internet Association, whose membership includes companies such as Google, Amazon, Facebook, Saleforce, and Twitter. “Today’s FCC vote on net neutrality is a welcome step in our effort to create strong, enforceable net neutrality rules that apply to both mobile and fixed broadband — banning paid prioritization, blocking, and discrimination online,” the group said in a statement.
So is this just a power struggle between old-line companies, as represented by NAM, the NCTA, and the TIA, and newer companies, such as those in the Internet Association? Or is there something deeper going on here?
Companies will usually act based on what they perceive to be their best interests at a point in time, but the different views also reflect different philosophies of the government’s proper role in the economy.
But what I think is also going on here is that the Internet market, if you will, is maturing and, like the oil, transportation, and steel markets before it, is now becoming subject to greater scrutiny and control designed to better ensure openness, fairness, and a level field for all players, at least as far as that’s possible.
The not so veiled threats of legal action and a pull-back on investments by those opposed to the new rules will not prevent the market from behaving as it has in recent modern history, but these actions may indeed distract them from continuing to innovate in a market that still has a lot of headroom for innovation.
Such a result would be unfortunate but perhaps inevitable as the struggle for power trumps other priorities. But, as swords clang, others will be on the sidelines looking for an opening. And then the cycle of innovation and competition will start yet again.
What’s your view on the new net neutrality rules? What effect do you think they will have on manufacturing?
Written by David Brousell
Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council
Obama drove this, given his complete lack of private sector experience and therefore his ongoing effort to increase the role of government versus the private sector, which is the definition of socialism. The FCC chairman was explicit about his opposition of the FCC regulating the internet, but changed his mind under unprecedented pressure from Obama. Now the only hope to rescind this latest bad move by Obama is congress and the Supreme Court.
Possibly someone could explain what problem the FCC was going to solve by regulating the Internet, since there is no question the regulation will bring on a lot of additional government cost. The cost benefit ratio will demonstrate the lunacy of this move by Obama / the FCC.