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'Wait and see' posture follows end of net neutrality

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On June 11 the repeal of net neutrality rules went into effect.
On June 11 the repeal of net neutrality rules went into effect. - ()

Net neutrality is no longer and folks around the state are mulling the fallout.

Net neutrality is generally defined as a principle in which internet service providers treat all web content the same, regardless of the source and without favoring some sites or blocking others. The principle means that the ISPs such as AT&T, Altice USA, Charter, Comcast, Cox and Verizon, are “neutral” on whatever content is on the web.

In December, the FCC repealed net neutrality rules, and the repeal went into effect June 11, ending consumer protections prohibiting ISPs from blocking or slowing traffic, or charging an “internet fast lane” for content. For New Jersey’s businesses and consumers, it’s not entirely clear what sort of marketplace reaction comes next.

Gil Santaliz, CEO and founder of New Jersey Fiber Exchange, said he’d like to make sense of the new landscape sooner rather than later.

“It’s a weird time,” Santaliz said. “We’re going into an area of uncertainty and the concern of uncertainty is people are hesitant to make decisions.”

New Jersey Fiber Exchange, a Wall Township-based internet infrastructure company, has many international clients.

“Our clients are across the board and predictability is a must in any market,” Santaliz said.

In the worst-case scenario of a world without net neutrality, costs would rise for inferior services. There could be a basic flat fee for the internet, and then extra for virtually everything else.

“Death by a thousand cuts,” mused Richard Howard, a research professor at the Wireless Information Network Laboratory at Rutgers University-New Brunswick. “Five dollars here and there and suddenly you realize you’re out $200 a month.”

There is another related concept so-called “internet fast lane,” the concept of ISP’s charging companies or consumers a premium cost for higher speeds. An ISP that owns certain news websites could offer a fast lane for their own content while throttling, or slowing down, speeds to competing sites. Content producers would have to shell out more in order to stay in the fast lane.

“As a small business owner I think it’s going to cost more money and that obviously wouldn’t be a good thing for us,” said Chris Dudick, CEO of the Fair Haven-based tech company SiLas Solutions.

“If we have to pay more for [search engine optimization] and to get onto those fast lanes, it already costs a lot as a small business to maintain those types of things,” Dudick added.

Santaliz said that there would be winners and losers under the new internet landscape, but that remains to be seen.

“You’ve got to read the fine print and understand what that really means. Some might benefit. Some might lose,” he said.

Lawmakers have enacted or proposed a variety of rules aimed at mirroring the protections of net neutrality.

In February, Gov. Phil Murphy signed an executive order enforcing net neutrality standards for any ISP seeking to do business with state entities. That makes New Jersey the third state, after New York and Montana, to enforce such principles.

Additionally, New Jersey Attorney General Gurbir Grewal joined 22 other state attorneys general in a lawsuit to overturn the FCC’s repeal of net neutrality.

“The FCC gave a green light to internet service providers putting a yellow or red light on the delivery of content based on any number of criteria, including if a company should pay to have its content treated more favorable,” Murphy said.

The executive order applies to all state contracts signed with ISPs after July 1.  But there’s been some uncertainty about the extent or impact of the executive order.

“I guess the state is hoping there are some companies that will follow along,” Santaliz said.  “We’re home to a couple of big telecommunications providers here in New Jersey.”

Assemblyman Kevin Rooney, R-40th District, unveiled his own, more aggressive net neutrality standards.

Assembly Bill 3339 would restrict ISPs from creating their own fast lanes, which the legislation calls “paid prioritization,” unless the providers offer broadband speeds to the entire state.

“Unfortunately, states are prohibited from developing net neutrality rules,” Rooney said in a statement. “But that doesn’t mean consumers have to settle for a worse product, or settle for more cumbersome government as a result.”

Mark Stogdill, CEO of Hammer Fiber Optics Holding Corp in Point Pleasant Beach, said that he can “see the wisdom” in the proposal but added the bill still stands to benefit larger companies.

“Most companies like us, and there’s thousands of us, do not have the wherewithal to cover a statewide footprint,” Stogdill told NJBIZ in February.

The pair of bills were assigned to the Assembly Telecommunications and Utilities Committee in February, but have not advanced since.

Meantime, some predict a potentially contradicting patchwork of net neutrality laws varying from state to state, though there’s a measure in the U.S. House of Representatives to overturn the FCC decision after the U.S. Senate narrowly approved the same measure by a 52-47 vote.

The overturn is a power granted to Congress through the Congressional Review Act, a little-known legislative maneuver that allows Congress to undo actions taken by the executive branch.

House Speaker Paul Ryan has thus far declined to schedule a CRA vote.

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Daniel J. Munoz

Daniel J. Munoz


Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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