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Policy / DCN perspectives on policy, law, and legislative news surrounding digital content

Discriminatory deals could close the open web

July 20, 2017 | By Chris Pedigo, SVP Government Affairs – DCN @Pedigo_Chris

Earlier this week, we filed our formal comments with the FCC detailing DCN’s view on net neutrality. In the comments, we noted the potential hazards associated with allowing ISPs to give preferential treatment to some websites over other, particularly when it comes to those owned by the ISPs themselves.  

 

The issues really come into focus when you consider the case of Verizon. Over the last few years, Verizon has made a series of strategic acquisitions of digital content – first, by purchasing AOL and all its properties and, recently, Yahoo (which have been combined under the Oath brand). 

 

Many have speculated that these purchases were all about Verizon building scale to attract advertising dollars. And, if that was in fact their goal, Verizon is now heavily incentivized to maintain and even grow the audiences and platforms they have acquired. To do so, a natural next step would be for Verizon to provide faster access to its vertically-owned sites.  

 

In addition, Verizon would be disincentivized to allow the same speedy access to websites that compete with, say, Yahoo Finance. It’s not even a matter of whether a competing site could try to pay for preferential access (which on its own makes it hard for smaller content providers to compete). In this case, Verizon would simply want to ensure that Yahoo Finance gets the most traffic. And given its unique ability to control access speeds, it would be in a position to do so 

 

It’s hard to imagine that a public company with profit motives and shareholder expectations wouldn’t make every effort to drive more traffic to its sites in order to show the value of these acquisitions. However, the larger issue here is that—as an on-ramp to the internet—Verizon could prioritize delivery of its websites, thus ensuring that consumers are more likely to access them. 

 

The same dynamic would play out in any space where Verizon has its own content. It is not a stretch to assume that Verizon’s shareholders would expect Verizon to provide preferential access to Yahoo Tech, Yahoo Beauty, Yahoo Sports, Yahoo Lifestyle, TechCrunch, and HuffPost. In short, other tech review sites, fashion magazines, sports sites, lifestyle publications, and news organizations would lack the ability to compete fairly.  

 

Adding to the problem is that there are only a handful of mobile broadband providers. (And, as we all know, mobile increasingly dominates content consumption.) So, if each of the mobile broadband providers has their own content for a specific vertical, the remaining content creators would be left without a chair in the game. In fact, they would find themselves at a significant competitive disadvantage. Instead of competing on quality of content, publishers would be forced to compete over who can be bought first by a mobile broadband provider.

 

We all agree that ISPs should not block or throttle consumers trying to access the plethora of available lawful content. But, we need to be equally careful to ensure that discriminatory deals don’t dramatically limit the number and variety of websites available to consumers. As the internet’s inventor Tim Berners-Lee said, “The important thing is the diversity available on the Web.” The Internet is a wonderfully weird place where innovation is the norm and a cacophony of voices flourish. Let’s keep it that way.

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