Within the whirlwind of changes brought by the peaceful transfer of leadership the United States experience on 20 January 2017, are a shift in the perspectives and policies of the FCC. As this recent article in Forbes points out, it is no longer a question of IF the Net Neutrality rules of 2015 will be rolled back but of WHEN and HOW MUCH? While this has streaming services like Netflix and Hulu shaking in their gross margin boots and explains the investment of ISPs in content over the last few years, this also has an impact of other Over The Top (OTT) services like Facebook, Twitter, Skype, SnapChat, Apple Messages and others. Not only could ISP’s back charge these providers for preferred access on their networks but could also start to share those ‘costs’ with consumers, bundling favored SnapChat access into family plans the way we used to buy SMS messages in bulk.
And OTT service running over these networks that hasn’t yet seem to bubble up to the top rank angst over binge watching the latest season of Iron Fist on Netflix is the Internet of Things, or as I like to refer to it, the Internets of Things. ISP’s, loosed from the equal access/equal performance requirements of Net Neutrality can now price and provision premium IoT services, reducing latency, guaranteeing uptimes and other aspects critical to the deployment of IoT endpoints and their web of connections back to the home office. While this is very good for the firms seeking to deploy IoT solutions this could also turn into a boon for ISPs fighting the slow spiral of dumb data pipe-ness.
There is balance to be struck here. IoT promises to be the biggest economic disruption we’ve seen since the iPhone was launched a decade ago. While there are significant economic rents to be collected, if ISP’s set their premium access pricing for IoT deployments too high, it will delay the recognition of that hoped for revenue and slow the grow of the IoT market significantly. Firms seeking to embrace the promise of IoT are already complaining about the cost per endpoint for connectivity. Imagine the temptation to raise that price as we shift to a non-neutral internet.
Granted, the opposite could also be true for savvy ISP’s. Imagine a carrier bundling lower cost access for IoT deployments based on the lifting of the rules, sharing access across the billions of endpoints required to realize the promise of IoT and enabling tiers of service and performance so that IoT applications that are more tolerance of high latency, lossy data, etc. can realize the benefits of a sliced access internet. A connected pacemaker has more stringent latency requirements than a lawn sprinkler, why charge the same for access?