Yesterday in a speech, Federal Communications Commission (FCC) Chairman Julius Genachowski has recommended a new rule to apply net neutrality to all telecom and cable service providers. Net neutrality will prohibit internet service providers (ISP), especially the phone and cable companies, from discriminating against users or applications.
ISPs must grant consumers equal access to all legal web applications and services. The rule was so far applicable to the wired services providers, but the new proposal from the FCC wants to bring the flourishing wireless industry under scrutiny.
The FCC’s new proposal is, in general, bad news for large telecom and cable operators like AT&T (T), Verizon Wireless (VZ), T-Mobile, a division of Deutsch Telekom (DT) and Comcast Corp. (CMCSA). As of now, these companies can restrict any devices, applications, services, or contents from running through their respective networks that competes with their own products.
In regard to controlling the flow of bandwidth-consuming applications such as video streaming, the ISPs have been discriminating against several web content and application developers. The FCC recommendation will disallow this discriminatory practice on the part of wireless, wireline, or cable operators from either blocking or slowing access to any video or phone services.
The new net neutrality rule will be a boost to the web content and application providers like Google Inc (GOOG), Netflix Inc (NFLX), Amazon.com (AMZN), and Skype Technologies S.A. Worldwide, rapid implementation of next-generation 3G wireless networks have resulted in significant growth of mobile data traffic over the net.
The massive demand for web-enabled 3G phones now used to access Internet-based multimedia applications like games and movie downloads. This scenario is only expected to take more concrete shape as the global wireless community is on the verge of deploying high-speed 4G networks. In this situation, implementation of net neutrality by FCC will be a huge positive for several web-based application and content developers.
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