Net neutrality.

Okay, stay with me! I promise this won’t be boring!

Net neutrality. Commonly defined as the the principle that Internet service providers (ISPs) should enable equal and fair access to all content and applications across the internet regardless of the source, without favoring particular sites or applications. Basically, net neutrality is the Internet’s version of a free and open press.

Right now, the principle of net neutrality is under threat. The Federal Communications Commission, which controls how ISPs are regulated, is considering a move that would eliminate many of the rules that currently regulate ISPs. This would allow ISPs to create an “open market” on Internet access for websites and applications, which could in turn create bidding wars for access.

Before we get to how this could affect your bank or credit union, and thus your marketing activities, a quick history lesson.

In 2010, the FCC approved the FCC Open Internet Order, which attempted to ban cable television and telephone service providers from preventing access to competing web sites and applications, such as Netflix. However, the telecommunication companies rebuked this, and in 2014, successfully won a lawsuit reversing the order. The court ruled that if the FCC wanted to invoke such an order, they would need to reclassify the telecommunication companies, or ISPs, to stricter regulations. The court said that ISPs did not fit under the “common carrier” section of the Communications Act of 1934.

Skipping ahead to late 2014, the FCC began the process, and ultimately succeeded in early 2015, to vote to reclassify ISPs to Title II of the Communications Act. This allowed them to openly enforce net neutrality rules.

Since the installation of the new administration this winter, the FCC has come out against the net neutrality rules and is pledging to find ways to roll back these protections. This could have a profound and detrimental effect on how we are able to conduct business as community financial institutions.

To give you a financial-related example: prior to net neutrality laws taking affect, in 2012, Verizon Wireless, AT&T Wireless and T-Mobile all shut out Google Wallet from phones on their network. Because, coincidentally, it happened to compete with a mobile payment app that they had developed on their own. Because mobile carriers are also technically ISPs and there were no net neutrality rules in effect at the time, they could legally do this.

With the disappearance of net neutrality, this could mean that financials could end up paying a premium to ISPs in order to allow customers and members access to things like:

  • Mobile banking apps
  • Online banking access
  • Fast-loading web sites
  • Fast transaction times at branches
  • Online account opening and loan applications
  • And so much more….

Not only that, but as community financial institutions, we already stand at a disadvantage to large regional and national competition. On a marketing level, we must make our budgets stretch further and find more creative ways to distribute our message and brand in lieu of being able to make huge media buys and run multiple television spots, radio spots or buy billboards.

Doing away with net neutrality could mean that community financials would also be competing with larger competitors to allow access to all of those items above for OUR consumers!

If your bank or credit union uses companies such as Cox Communications or Comcast as your digital advertising partner, it could also mean that your pipeline to the internet – if provided by this same company – may also be tied into the amount of advertising dollars you spend with them. Or, they may require you to be a customer of their ISP in order to advertise with them.

Now is the time that we need to come together as community financial institutions and ensure that our consumers have equal and fair access to all of our internet-based solutions so that we can continue to market and compete on an equal field with larger competitors. For more information on how to contact the FCC, please visit this page. To contact the FCC and file a note about this issue directly, please visit this page.

I would also encourage you to contact your representatives for more information and to further relay your stance on the issue of net neutrality.