Special thanks to Source One Management Services for this guest post

Net neutrality has been a prominent topic in the telecom industry since the early 2000’s and is simply the principle that telecom providers must treat all transmitted data equally and cannot discriminate based on user, content, application or other qualifier. This restricts providers from being able to throttle a user’s speeds depending on what they are accessing and prohibits them from being able to favor their own content, sites, or videos. In 2015, regulation was passed by the FCC that reclassified high-speed internet as a telecommunications service rather than an information one which prohibits telecom providers from elevating one kind of content over another.

Recently conversations regarding net neutrality have come back into public focus since FCC Chairman Ajit Pai began campaigning to peel back the 2015 Open Internet Order and net neutrality regulations earlier this year. Pai officially released the Notice of Proposed Rulemaking (NPRM) on May 23rd, 2017 and it details that it would eliminate the FCC’s ability to enforce net neutrality regulations under Title II of the Communications Act and remove the bright-line net neutrality rules that keep providers from blocking or throttling content and websites. This proposal would also allow providers to participate in paid prioritization. Pai has expressed that one of the reasons behind the proposal is that he feels the regulations have restricted the incentives for telecom providers from expanding their internet access to more remote areas of the United States and, according to his unnamed sources, investment has gone down 5.6% among the top 12 internet service providers over the past 2 years. He believes ‘lighter’ economic regulations on net neutrality will incentivize telecom providers to increase their investment in building out infrastructure to support higher quality data services throughout the United States, specifically rural and suburban areas.

As an IT and Telecom sourcing professional, this raises concerns around how supplier relationships may change due to paid prioritization and how the user experience of critical business applications may be altered from data speeds being throttled or blocked. These concerns become even more complex when you apply hypotheticals to them and for me, it’s come down to vendor selection criteria and new areas of spend that will need to be negotiated.

Pertaining to vendor selection, if your company utilizes web-based applications such as SalesForce, Amazon Web Services (AWS), Microsoft Azure, etc. to support business critical functions then your accessibility or performance of those are potentially at risk. In this scenario let’s say your telecom provider is Comcast and they have an agreement with AWS but your company uses Azure. With ‘lighter’ regulations, Comcast could have the authority to throttle your data speeds to 5 Mbps when accessing Azure but, because of their agreement with AWS, those speeds could be 10 Mbps if you switched platforms. Comcast is willing to increase your data speeds to 10 Mbps but it’s going to cost a premium.

So what do you do in this scenario?

  • Do you find a new telecom provider for network services that has partnered with Azure?
  • Do you switch to AWS?
  • Do you pay the premium?
  • And finally, do you risk accepting the lower speeds and take the hit on user experience and productivity?

All of these outcomes have an impact to overall supplier relationships and a financial impact to your company. While this scenario is certainly an extreme example, it is not far-fetched to think that with ‘lighter’ regulations on net neutrality, there are going to be changes in the current environment because of new found freedom for your telecom providers.

Categories: Procurement


Published On: December 13th, 2017Comments Off on Net Neutrality & Vendor Selection Criteria