Surprise, small publishers screwed the most by net-neutrality rules

Here’s one more thing for small publishers to worry about: New net-neutrality rules are going to jack up the costs of doing business.

Rolling back net neutrality would relegate independent publishers to the slow lane of the internet because they’d be unable to afford access to high speeds. Large publishers with more cash can overcome this obstacle, but they’ll be hit with onerous fees and face possible competitive disadvantages from subsidiaries of internet-service providers receiving preferential treatment.

“I suspect that ISPs would create different tiers of data transmission speeds and prioritization,” said Fred Lane, an attorney who specializes in emerging technologies. ”Large corporations would be in a position to negotiate preferential treatment in ways not available to smaller content producers.”

Purch CTO John Potter said that large publishers, which are more likely to afford fees associated with faster page loads, would also be disadvantaged by changes in net neutrality since many publishers aren’t that profitable to begin with. An additional tax on internet service would place more pressure on already-struggling business models.

“Publishers prefer the certainty of net neutrality to the uncertainty of rolling it back,” he said.

Unfortunately for concerned publishers, this battle isn’t going away. On Tuesday, tech lobbyists urged the Federal Communications Commission to preserve current rules that prevent ISPs from opening up paid fast lanes. And last week, FCC chairman Ajit Pai reportedly briefed telecom trade groups on his plan to rollback net neutrality.

If Pai gets his wish and guts the rules in place, it could create conflicts of interest because the conglomerates that control the major ISPs also own publishers. Verizon owns AOL and Yahoo, Comcast owns NBC and AT&T has a stake in Otter Media and is trying to merge with Time Warner. So when an ISP like Verizon has its own video-streaming service like Go90, it would have incentive to make Go90 load faster than competitors.

“This system would allow ISPs to raise the cost of the rivals of their affiliates,” said Santa Clara University legal scholar Catherine Sandoval. Lane added, “Preferential treatment for in-house content providers seems very likely.”

Allen Mendelsohn, a lawyer who specializes in internet law, said that publishers could try to recuperate some of the ISP fees by using their newfound speed to drive more ad revenue by raising ad rates or serving more video ads. But those practices are only sustainable if a publisher has great demand for its inventory and the additional ads don’t alienate users.

Net neutrality hasn’t been killed off yet, and even if Pai makes good on his word, it’ll be a while before it’s officially approved by the FCC and ISPs adapt to the new law. But the Trump administration’s bullishness on deregulation doesn’t paint a hopeful picture for the future of equal internet access.

“It is really important that folks recognize how what happens in Washington affects them,” said Dave Morgan, a former attorney and CEO of Simulmedia. “It isn’t the day after a law changes that you see changes in your business. But it is clearly a shift in the balance of power, and it could have a significant degradation on publishers’ business over the course of time.”

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