Net Neutrality is making a big comeback after the U.S. Federal Communications Commission (FCC) voted to reclassify broadband internet as a telecom service and public utility, making it equivalent to other essential services (like water and electricity) and now eligible to be regulated by the federal government. The return of Net Neutrality should serve as a call to action for IT and finance executives to expect price hikes, rethink network modernization, and keep closer tabs on their telecom service costs and usage — here’s why.
Net Neutrality and the Rules Explained
Net Neutrality rules were originally introduced in 2015 but then revoked just two years later. Now they’ve been reinstated, expanding the FCC’s ability to regulate internet networks. Part of the rationale for reinstallation is the 2020 pandemic and the inescapable need for internet services when companies, schools, and people must connect digitally.
The details and exact requirements have yet to be released. However, Net Neutrality is a set of rules under the principle that all internet traffic should be treated equally without giving preference to any certain website or service. Internet service providers (ISPs) will no longer be able to throttle services or charge extra for faster service. As a fictional example, ISP Comcast (which owns Peacock TV) can’t create a better streaming experience for Peacock viewers by throttling or slowing Netflix traffic.
NBC reports that the rules “ensure that websites and apps have equal access to the global internet regardless of their size or ability to pay the companies that own the web’s infrastructure, such as network cables and cell towers. They block broadband internet providers from manipulating speeds or creating internet ‘fast lanes’ where a company might pay extra for faster uploads and downloads of its content.”
These regulatory requirements have long been a friction point for telecom carriers, but regulators argue their oversight “makes providers more accountable for outages, requires more robust network security, protects fast speeds, and requires greater protections for consumer data.”
Net Neutrality: 3 Actions Finance and IT Leaders Should Take
Watch your contracts and costs closely. Internet service price increases are likely, which could negatively impact IT budgets and network innovation projects. Plus, your abilities to manage telecom expenses will be key in unlocking the protections that Net Neutrality will bring.
1. Expect Price Increases and Monitor Your Contracts & Costs
Net Neutrality may increase internet service prices, helping carriers make up for lost income given that they will no longer be allowed to charge additional fees for faster delivery or manipulate traffic to protect the quality of specific services. ISPs will need to find new ways to guarantee service performance across the board. Someone must pay somewhere, and it’s safe to assume that new changes and any resulting financial fallout will be passed to consumers.
Audit your contracts and invoices to establish a baseline of what you’re paying today and read the fine print to know when and where services are being throttled. Tangoe’s cost management consultants warn about service throttling in our 2024 IT Trends and Savings Recommendations report, explaining it as today’s ugly secret that can happen in unexpected places – like when the network isn’t congested and with no regard to how much data the user has consumed or which services they’re using. The more details you know and track, the more you can hold your providers’ feet to the new Net Neutrality fire.
Insights into consumption habits and service usage data are also helpful in making better use of the services you already pay for as well as smarter decisions about what will likely become a growing number of plans and service options in the future as new regulations trickle down.
The Bottom Line: Don’t wait idly on your heels – preemptive optimization efforts can offset future price hikes.
But there’s another ugly secret to unpack…
2. Reconcile Your Invoices, Costs, and Contracts
In the telecom industry, carriers have never been held responsible for proactively crediting clients after failing to deliver on their service level contractual agreements. Instead, clients must find the carrier’s mistakes themselves and file an SLA claim to receive a refund in the form of a service credit.
While Net Neutrality may make providers more accountable, don’t count on every burden being lifted from the clients’ shoulders. This is why telecom invoice auditing and contract reconciliation will remain a critical activity (a service that has deep roots here at Tangoe.)
Know your current invoice auditing practices and any visibility or staffing challenges that stand in the way of correcting billing errors. Comparing SLAs and invoices to contracts is a manual, tedious yet necessary practice for those wanting to save the most money on their IT costs – one that becomes much more automated when you partner with Tangoe. Learn more about our telecom invoice and audit optimization services.
Invoice auditing activities will largely determine your ability to capitalize on all that Net Neutrality promises to deliver. According to Tangoe’s data, it takes the average company a staggering 50 hours per invoice to load and process invoice data, reconcile invoices against contracts and usage, validate expenditures, and allocate costs to their appropriate departments or business units. Tangoe offers AI-powered platform and fully managed service to streamline this process.
3. Consider Network Modernization Strategies in Light of Net Neutrality
ISPs claim Net Neutrality will negatively impact them with more spending on network maintenance, which could potentially increase costs. Any CIOs and CTOs leading network modernization projects should consider this carefully. If internet prices increase, it could put a damper on the benefits of transitioning to SD-WAN.
After all, SD-WAN is widely popular because it allows companies to trade their more expensive private wireline services for low-cost broadband connectivity. When done right, traditionally, SD-WAN can generate a savings of roughly 20-30% or double the amount of bandwidth for the same price. It remains to be seen how this figure will evolve in the months and years ahead.
No one has a crystal ball, but it will be increasingly critical to monitor this situation closely and make cost optimization both a strategic and tactical effort during any network innovation process. Implementing SD-WAN may not always equate to savings alongside network performance boosts if the solution isn’t designed in ways that strike the right balance between cost savings and resiliency. Here’s a 5-step process that explores how Tangoe modernizes networks while delivering cost savings. Learn how we helped a semiconductor company save $2M on their SD-WAN project.
Ready to review your telecom contracts and internet costs? Contact Tangoe’s Advisory Services for a free assessment.