I’m not normally an alarmist or a “conspiricist” who whips out her tin foil hat without hesitation, so bear that in mind when I tell you this: The impending net neutrality judgment from the DC Circuit has got me very frightened, and no, this isn't just some nerd thing. This could affect how we do business in the multifamily housing industry in a less than positive fashion.
A lot of people don’t know what “Net Neutrality” is, or why it’s important, so let’s start there. In 2010, the FCC made a ruling that the owners of cable and DSL/FiOS lines were not allowed to throttle back bandwidth on services just because they wanted to – ie, Comcast isn't allowed to make the information packets from Netflix run slow on your network so that you’ll change your mind and watch their crappy OnDemand services instead.
The FCC said that the internet was neutral ground, and the netizens rejoiced in the ruling, because for the first time in our capitalist society, we had an even playing field where innovation, content creation and dispersal, and communication of information and opinion could happen without having to go through the social and economical bureaucracies that have been in place for years. People with good ideas could share them at the same speed and with the same reach that any corporation could.
Verizon, AT&T, Comcast and several other service providers did not rejoice in the 2010 ruling, because they think since the lines belong to them, they should have a right to say what goes over them. Initially, in 2005, they offered what they tried to pass off as a compromise – they agreed not to “block” any sites, but reserved the right to throttle speed up or down on anything they wanted for any reason they wanted. For the record, this is not a compromise, it’s a crapromise. They filed an appeal which is now being decided imminently by the DC Circuit courts saying that the government has no right to tell them how to run their business.
But here’s what they’re really fighting for: Let’s say you have a property management company with a substantial amount of units and a decent sized operating budget. You could go to the cable/DSL/FiOS providers in any region and say to them, “Here is a bag full of money. In exchange for this bag full of money, I want you to throttle down the bandwidth for your users of any sites for apartments are not my corporate sites.” Because we know the following facts… (from http://blog.kissmetrics.com/loading-time/)
- 73% of mobile internet users say that they've encountered a website that was too slow to load.
- 51% of mobile internet users say that they've encountered a website that crashed, froze, or received an error.
- 38% of mobile internet users say that they've encountered a website that wasn't available.
- 47% of consumers expect a web page to load in 2 seconds or less.
- 40% of people abandon a website that takes more than 3 seconds to load.
- A 1 second delay in page response can result in a 7% reduction in conversions.
- If an e-commerce site is making $100,000 per day, a 1 second page delay could potentially cost you $2.5 million in lost sales every year.
…we know that the housing provider who can pay to sabotage the internet speed presence of their competitors will come out on top. For the same reason, this is a horrific issue for the ILS services – All it takes is a bag of money from one company to sabotage the usability of all the other companies, and when that happens, everyone’s rates for advertising go up because what has been created is a defacto monopoly on bandwidth access. And I’m not extrapolating out to something that wouldn't happen, either. From a recent WIRED article:
The implications of such a decision would be profound. Web and mobile companies will live or die not on the merits of their technology and design, but on the deals they can strike with AT&T, Verizon, Comcast, and others. This means large phone and cable companies will be able to “shakedown” startups and established companies in every sector, requiring payment for reliable service. In fact, during the oral argument in the current case, Verizon’s lawyer said, “I’m authorized to state from my client today that but for these [FCC] rules we would be exploring those types of arrangements.”
And the Junior High rule is at play here: If you can do it to someone else, that means that someone can, and probably will, do it to you.
Think of the money that could be paid to block things like Craigslist, or access to the ForRent app on people’s mobile devices. How much can your company or property afford to pay to Comcast, Verizon, AT&T or other service providers just to keep your marketing views high enough to keep traffic flowing through the door?
Lastly, this has the makings of a freedom of the press issue if I've ever heard one. We are but a stone's throw away from being cut off from information that either a corporation or a government thinks we shouldn't have access to without facing substantial hurdles in service or speed to acquire it. It frightens me to think that this freedom baby of information and equal playing field that has served to create innovation for both businesses and individuals is about to be handed over to a sitter that intends to shake it mercilessly every time it cries out until it is so damaged there will be no fixing it.
Net Neutrality – You should care. You should be concerned. You should be outraged.
Or do you have a big enough bag of money to come out on top?