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In a 3-2 vote last week, the Federal Communications Commission voted to repeal net neutrality protections established in 2015. The previous rules required internet service providers, or ISPs, to provide equal treatment for all traffic on their networks. Under the new rules, ISPs would no longer have these restrictions, as long as they provide notice of traffic-treatment policies to their customers.
The debate over the net neutrality ruling has sparked a great deal of passion on both sides. Critics of the vote argue that eliminating net neutrality will allow ISPs to segment and meter different types of traffic on their network. This could potentially raise costs for people who wish to access over-the-top content providers, like Amazon and Netflix, while limiting emerging application providers to use the internet to deliver innovative new services.
Supporters of last week's vote -- made on Dec. 14, 2017 -- argue that enabling service providers to exert greater control over their networks will lead to more investment by service providers to expand their offerings.
As a result of the net neutrality ruling, the Federal Trade Commission, and not the FCC, would police anticompetitive behaviors. The new rules are not yet in place and could face congressional and legal hurdles.
Net neutrality ruling could raise operating costs
IT managers responsible for unified communications strategies should pay careful attention to the net neutrality ruling, as the fallout could disrupt various enterprise services, including the following:
1. Telework. Currently, residential internet services are largely priced based on desired bandwidth. Now that ISPs are free to shape traffic on their networks, I'd expect to see residential services shift more to a model where prices are based on the desired applications.
For instance, do you just want email and light web surfing? That will be $XX.XX. Want support for video conferencing and IP telephony? That will be $XX.XX. These kinds of tiered services are no stranger to frequent travelers, as hotel Wi-Fi services are typically priced in this manner, but they could potentially raise the cost of supporting teleworkers.
2. UC as a service. Over-the-top UCaaS providers -- such as 8x8, RingCentral and Vonage -- typically work well over the public internet. But in a world without net neutrality, ISPs could deprioritize competing UCaaS offerings in favor of their own services.
Achieving acceptable performance could require paying extra to directly connect the enterprise WAN to UCaaS providers. On the other hand, ISP-provided UCaaS products could potentially become more attractive options based on cost.
3. Virtual desktops and virtual private networks. It's not just voice and video that could suffer from ending net neutrality protections. Many organizations use thin clients, such as virtual desktop infrastructure, and VPNs to provision applications to remote workers and branch offices. If companies are using the internet as their WAN, these applications could potentially suffer negative performance consequences if ISPs rate-limit general internet traffic, or VPNs, to prioritize their own services.
Again, the end result is likely a need to purchase a guaranteed performance service for remote offices and home workers, raising operating costs.
4. SD-WAN. The SD-WAN market has exploded in the last several years. Organizations have used the technology to reduce MPLS spending by shifting more traffic to a virtualized WAN that actively distributes packets across a mix of internet and MPLS circuits, or just internet connections, to achieve MPLS-like performance and reliability, while reducing telecom costs.
If organizations are forced to shift their current internet services to more expensive, "business-grade" offerings, the economic model driving SD-WAN adoption could potentially change.
These are just a sample of the potential effects that UC leaders should understand as ISPs react to the change in operating rules and develop strategies to better monetize their networks. UC leaders should carefully follow what is likely to be a rapid change in how organizations purchase, deliver and manage internet services.