Internet of Things hindered by Net Neutrality?
The decision of the US Federal Communications Commission (FCC) to adopt the “net neutrality” principle raised concerns by European authorities that declared their intent to adopt a different solution. And this happens in a period when the usage of bandwidth is becoming essential to ensure the growth of the Internet of Things.
The position taken by the FCC is that bandwidth services will be considered “utilities” i.e. public services like water and gas with the consequence that they will be subject to considerable regulatory restrictions. Providers will be unable to request additional fees for faster connection services or to block some types of contents. Should an entity deem to be unjustly overcharged, it can report the matter to the FCC.
The European Union reacted to such move taking a difference stance stating the following
— Günther H. Oettinger (@GOettingerEU) March 3, 2015
during the Mobile World Congress of Barcelona.
And indeed apparently the European Union is considering a two level more “flxible” approach leaving the freedom to telecom providers to charge additional fees for “special services“.
This is a very hot topic at the moment since the usage of bandwidth for special services might become exponentially relevant due to the growth of the Internet of Things. The Internet of Things will enable our everyday “things” such as our cars, appliances, but even our cities’ lighting system to communicate among them to provide additional services and ensure more efficiency.
This is a market which is expected to generate $ 7.1 trillion in sales by 2020. But, Internet of Things devices such as connected cars (or even self-driving cars) and eHealth systems of remote monitoring of patients will require more bandwidth than the current services.
According to some commentators, the net neutrality risks to reduce investments of telecom operators in infrastructures and on the increase of available bandwidth since they will lose any guarantee of being able to recover them. And if such investments on bandwidth will diminish, this might slow down the growth of the Internet of Things.
The comment from Cisco’s CEO, John Chambers, was that the net neutality is a “major mistake“ that will hinder the development of bandwidth which might put the US behind Europe. And a similar comment was released by the CEO of Nissan and Renault, Carlos Ghosn.
Europe has now to decide its future. Maybe for the first time in history, investments in Europe might become more profitable than those performed in the United States due to the more restrictive American regulatory regime. And since this happens in a period when the Internet of Things is expected to generate a change even bigger than the Internet, it might become an opportunity for Europe and an big issue for the US.
It will be interesting to see the development of the above. But in the meantime, as usual, feel free to contact me, Giulio Coraggio to discuss. Also, join my LinkedIn Group or my Facebook page, follow me on Twitter, Google+ and become one of my friends on LinkedIn.
WRITTEN BY GIULIO CORAGGIO
IT, gaming, privacy and commercial lawyer at the leading law firm DLA Piper. You can contact me via email at email@example.com or firstname.lastname@example.org or via phone at +39 334 688 1147.