This week, the US Supreme Court struck down the FCC’s ruling on network neutrality, which defines telco companies as common carriers, who are therefore forced to treat all network traffic equally. In theory, this opens the door to things like tiered network access (where certain kinds of traffic get higher priority), or even attempting to bill large web media properties (i.e. YouTube and Netflix) for the traffic which they carry over their network.
I believe that the telcos are unlikely to move quickly on this, and will likely initially do some small (and very quiet) experimentation on a local basis.
The reasons are three-fold – firstly, the FCC may yet respond with an updated ruling that complies with the Supreme Court (this is apparently well within their power); secondly, large experiments run the risk of a massive consumer backlash; thirdly, the ultimate strategic outcome is actually quite hard to predict.
The third item on this list is most interesting from a business strategy perspective. Let’s try to game out some possible longer-term outcomes, shall we? Continue reading