Implications Of Net Neutrality Repeal In U.S. Explored By IHS Markit Study

A study on the aspect of net neutrality and its history in the U.S. was published by business information provider IS Markit. The report also examined the related information on rivalry which could determine the future of the internet if the present net neutrality protections be repelled, amidst risin fears of removal of net neutrality.

“Despite the current strong net neutrality provisions, the mobile industry has tested the boundaries of what can be accounted for as network management” the report noted.

Supporters of net neutrality believe that the death knell would be sounded for an open and innovative internet ecosystem if the net neutrality protection provision are removed by the Federal Communications Commission (FCC). Markets are expecting that the provisions upholding neutrality on the internet would be repelled at the FCC meeting scheduled for December 14.

However, those who oppose net neutrality believe that the present prohibitions in the name of maintenance of net neutrality as hindered infrastructure investment and the removal of such hindrances would spur investment in infrastructure. They argue that investment have been stunted by limiting returns on investment.

They argue that there would also be an increase in innovation and investment by the removal of the protections. The removal would make possible imposition of a range of complex fee structures and by raising the overall cost of services. And there would be new competition if the deregulation is made into an effective strategy resulting in higher returns.

However, proponents of net neutrality protection claim that from the customer’s view point, that was the best outcome of the provisions.

Of the 11.2 million census blocks, about 9.1 million people have access to the broadband in the U.S. says the IHS Markit report which is called ‘Net neutrality in the United States – A once and future history’. While about 10 percent of the census blocks that have access to broadband do not manage to find the promised speed of 10 megabits per second (Mbps) while another 38 percent of census blocks with access to broadband have to depend on just one provider that deliver only reasonable speeds of service, the report found. For the consumers, the period of transition can prove to be hard because the current local monopolies would be able to charge discrete fees for third-party services as they take benefit from them being allowed to limit access to services.

The battle ground is likely to be video. In the U.S. the average revenue per user (ARPU) is about $80 for access to cable TV services which is more when compared to the rates charged in other developed economies for video services. One figure would put tings in perspective – $19.49 per month is the ARPU for cable TV in Western Europe.

“Despite the current strong net neutrality provisions, the mobile industry has tested the boundaries of what can be accounted for as network management,” said  Seth Wallis-Jones, principal analyst, IHS Markit. “Operators of both wired and wireless networks have been investigated and on occasion sanctioned for testing the regulatory environment. Those cases offer insight into the outlook for a more deregulated market, illuminating potential strategic options for fixed network operators. Outcomes from those strategic moves illuminate scenarios ranging from ‘good’ to ‘dystopian,’ with many outcomes likely to be both local and transitory as competitive market dynamics develop. The status of net neutrality has also been in constant flux as the administration and objectives of the FCC change. Looking ahead that state of flux is likely to continue.”

(Adapted from Businesswire.com)

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