Net Neutrality and Its Effect on the Cable Industry

Net neutrality, the concept that all content and data sent over the Internet is created equal and, therefore, should be dispersed equally, might very well be a thing of the past if the Federal Communications Commission’s (FCC’s) recommendations are implemented. Last month, the FCC offered its opinion that providers should be able to charge companies premium prices to deliver their content faster.In addition to how such a change could alter the Internet as we know it, the shift might also have implications for over-the-top (OTT) content. That’s because industry juggernauts might be put in a prime position to capitalize on their assets and take advantage of the “fast lane” made possible by changes in the law.

Case in point: Earlier this year, Verizon announced its purchase of Intel Media—including TV service OnCue and an IP-based set-top box—putting itself in a prime position to launch an OTT service of its own, in addition to its traditional FiOS television offering. One might conclude that Comcast, Dish Network and DirecTV—companies in a position to afford access to the “fast lane”—could launch similar OTT services of their own. If all that were to occur, the traditional structure of the pay-TV industry as we know it would cease to exist.

It remains to be seen how all of this will play out, but should these massive providers get involved in the OTT game and be able to afford access to the “fast lane,” one could foresee a difficult road smaller companies would have to traverse to become similarly successful.