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What Net Neutrality Approval Means for E-Commerce

Net neutrality scored a big win Thursday when the Federal Communications Commission (FCC) voted three to two in favor of regulating broadband Internet service as a public utility. This means that from now on, network providers like Comcast, Verizon and AT&T can’t control access to some websites or charge more for faster speeds and traffic.

Backed by President Obama, commission chairman Tom Wheeler said the FCC was using “all the tools in our toolbox to protect innovators and consumers” and preserve the Internet’s role as a “core of free expression and democratic principles.” Mobile data service for smartphones and tablets, in addition to wired lines, is being placed under the new rules because, as Wheeler put it, Internet access is “too important to let broadband providers be the ones making the rules.”

Essentially, it’s business as usual for e-tailers. “It’s not a game changer,” according to Poonam Goyal, senior retail analyst at Bloomberg Intelligence, “But it’s going to level the playing field. If you’re a small online retailer that wants to have the same speed and access as a large online retailer, you now have that. But consumers won’t even notice anything going on.”

Reid Sherard, research lead at L2, a New York City-based firm that measures fashion and beauty brands’ digital presence, agrees, adding that net neutrality is much more of a concern for content providers than for retailers. “That being said, the FCC’s ruling preserves the status quo and eliminates uncertainty going forward, ensuring that competition in online retail is based on current principles such as product, customer service and marketing,” he said.

The protections won’t take effect for a few months, however, offering opponents of net neutrality — who say these new rules will force them to cut back on investments in new technologies — time to challenge them in court.