Category: CommunityNet Neutrality Decision May Be Bad News For Web Hosting Companies

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Photo Credits: jamiejohndavies

Since its inception, the Internet has been agnostic when it comes to providing bandwidth to sites and online service providers. It didn’t matter whether you were a small-scale blogger with a few hundred uniques a month or Netflix — your traffic would flow over broadband provider’s networks with the same priority. Net neutrality meant that broadband providers couldn’t treat any traffic source as a second-class citizen.

Until recently, the FCC was the guardian of net neutrality, creating rules in the Open Internet Order that forced broadband operators to treat all web activity the same. The broadband companies have long bridled against the limitations of net neutrality. They would like to be able to “double dip” on their bandwidth charges, taking money both from the consumers and producers of online content. To overturn the FCC’s rules, Verizon sued, and won. The court decided that the FCC didn’t have the legal power to regulate how broadband providers apportion their bandwidth.

While the decision is not a final death blow for net neutrality — the FCC still has some legal wiggle room should it decide to use it — the ruling is a serious blow to supporters of net neutrality, which include many of the Internet’s largest bandwidth users.

The success of many web hosting companies depends on the long tail of low margin, high volume clients. Those clients are likely to be seriously disadvantaged by the overturning of the principle of net neutrality.

Consider eCommerce; the industry is dominated by big players who wouldn’t blink an eye at the idea of paying broadband providers to prioritize their traffic. But, for the thousands of smaller eCommerce retailers who contribute a significant chunk of web hosting revenues, paying those extra fees would be an onerous burden, whether they’re direct or folded into hosting costs.

It’s entirely possible that we’ll end up with an Internet where Amazon’s pages load extremely quickly, while an independent online retailer’s traffic is deprioritized to the point at which they can no longer offer an adequate experience to their users.

The same is true of many areas of the online ecosystem: YouTube will load quickly, your video hosting clients’ sites won’t; the New York Times will provide a great reading experience, thousands of blogs and small business sites will be laggy and slow.

The abandonment of net neutrality as a principle has the potential to damage the enormously fertile ecosystem of blogs, businesses, startups, and retailers who have driven the growth of the web hosting industry. It may leave us with a much poorer Internet, dominated by a few big players, and a reduction in the ability of new competitive businesses to drive the market forwards.

Photo Credits: jamiejohndavies

Hosting IndustryNet Neutrality
Jan 28, 2014, 4:04 pmBy: InterWorx (0) Comments

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