Net Neutrality and the Democrats’ Win

I rarely use this space for political discussions, but considering the changes going on in Washington in the wake of the Democrats’ sweep of Congress, I thought it important to address how these changes will affect we who make our daily bread marketing on the Internet.

Overall, it looks like the Democrats’ win will be pretty positive for Internet marketers, mainly because of the changes in congressional leadership. The most important change is the likely elevation of Representative Ed Markey (D-MA) to chair of the Subcommittee on Telecommunications and the Internet, the subcommittee that’s been the center of the debate on network neutrality.

Markey (like much of the Democrats’ leadership) has been a staunch advocate of keeping the “Internets” (as Alaska senator Ted Stevens has dubbed them) free from the multitiered usage system much of the telecommunications industry has been advocating.

Why is net neutrality such a big deal for online marketers? ClickZ editor Rebecca Lieb has written a pretty good primer on the subject that’s definitely worth reading. In effect, it boils down to this: if the telcos get their way, we’ll be looking at an Internet where users, publishers, and (as a result) advertisers have to pay a premium to get faster access than those who can’t afford to pay for faster access. What you end up with is a Balkanized Internet, where the haves cruise the big pipes and the have-nots have to stand in line as their packets squeeze through with lower-bandwidth access.

For the big players (MSN, Google, Yahoo, etc.), this probably won’t make much of a difference except for cutting into their already prodigious profits. But for the smaller publishers, this multitiered system might really start to be a major drag on their operations and profitability. Niche players might start dropping off the map; they can’t afford the bandwidth to get the performance they need to attract readers, and the readers they do have are dropping off due to slower load times.

For us advertisers, the end of network neutrality could make dealing with online media even more difficult and expensive than it is now. Much of the current buzz and growth in the online ad industry has centered around rich media and video; witness Google’s billion-dollar-plus YouTube buy. These two bandwidth-hogging technologies would be negatively affected by increased bandwidth fees. Although they’re on the verge of really taking over how we use the Internet, slapping a speed tax on top of them would stifle innovation and reduce their cost-effectiveness as advertising media.

Another aspect of net neutrality and its relation to online advertising that hasn’t been discussed much might have the largest effect: online advertising networks. Networks like Burst Media and 24/7 Real Media work because they aggregate content from an enormous number of small, niche sites — sites that would be negatively affected by an end of net neutrality. In addition, the networks that serve the ads might have to substantially boost their rates to pay for the serving overhead of rich media and video advertising, two of the most effective types of ad units we have in our arsenal today.

No matter your political leanings otherwise, we should all be glad a fair number of senators opposing net neutrality have been ousted. Though many on the list had no real position on the topic, you can bet now that the elections are over more of them will start showing their true colors. We must all keep the pressure on to keep the Net the way it is.

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