“Net neutrality is pro-business in the best and fullest sense of the term, guaranteeing that new companies can grow unimpeded and help accelerate the [global] economy.” – Nicholas Economides, Professor of Economics, New York University
What is net neutrality, and how will it impact on our ability to invest in the global financial markets via an online trading platform? In fact, the question of how net neutrality will impact on our ability to trade on the world’s capital markets can be applied to whether we will continue to have unrestricted access to the Internet.
Net Neutrality: What, Why, How?
Much has, and continues to be written about the advantages and disadvantages of keeping or repealing the rules approved by the US Federal Communications Commission (FCC) under President Obama in early 2015. However, the new head of the FCC (AjitPai) is expected to embark on a strategy to overturn the 2015 ruling.
How will this affect our rights to unrestricted access to the internet?
Before we look at whether the overturning of the current net neutrality rules should be overturned or not, let’s have a look at what the term “net neutrality” entails:
According to Wikipedia, net neutrality is the “principle that Internet service providers and governments regulating the Internet should treat all data on the Internet the same, not discriminating or charging differentially by user, content, website, platform, application, type of attached equipment, or mode of communication.”
Furthermore, the net neutrality rules that were approved by the FCC in 2015 “prohibit broadband providers from giving or selling access to speedy internet, essentially a “fast lane,” to certain internet services over others. The 2015 FCC rules reclassified internet service providers much like utilities. A federal appeals court upheld the rules last year.”
The Impact Of Restricting Access To The Internet
Internet access can be restricted in many ways. However, the primary way that the net neutrality rules deal with is to throttle or slow down the high-speed internet connections to charge more for faster connections. Furthermore, governments, schools, families can censor or block access to certain websites.
Most forms of censorship are effected at a national level, and it differs from country to country. Finally, schools and families tend to prevent underage children from gaining access to websites that are deemed inappropriate for their age.
In essence, the current rules on net neutrality have determined that it is illegal to slow down the speed of Internet connections as well as the practice of charging more for faster Internet connectivity. Should the 2015 FCC ruling be overturned, Internet Service Providers (ISPs) will be allowed to block certain websites as well as charge consumers more for faster network connectivity.
Upon the consideration of this information, I believe that the question that begs is should the 2015 ruling on net neutrality be reversed, how will it affect your ability to invest in the global financial markets? In an attempt to answer this question, here are a couple of possible scenarios that you might face in the future.
Throttling The Speed Of Your Internet Connection
In my opinion, the overturning of the current net neutrality rules shouldn’t play a significant role in restricting your ability to connect to your broker’s online share trading platform. However, if the speed of your current internet connection is throttled or slowed down, it might affect the time it takes for you to place a trade, which is not one of the risks you really assess when investing in the market.
Ergo, should you need to open and close your trading position in a short space of time, you might lose out on this particular deal. In simplistic terms, to solve this issue, you would need to fork out more cash to purchase a higher internet connection speed bundle from your ISP.
Blocking Access To Online Share Trading Websites
A more radical, albeit unlikely scenario, would be for the government to decide that investing in the world’s financial markets is illegal. Thereby blocking access to your broker’s online trading platform. To be honest, I’m not sure what you could do to solve this challenge should it happen. However, in real terms, it’s highly unlikely that this scenario will ever occur.
As with everything in life, the right to freedom of access to the Internet comes with the responsibility of using this resource wisely. While I believe that the reversal of the 2015 rules on net neutrality will be a significant blow to many people, I also believe that there is an equal responsibility for people to utilize the current resources wisely.
In the matter of what premium we will be required to pay for high-speed Internet connections, I guess we will have to wait and see whether the current ruling is overturned or not.
[Photo Credit: FirmBee]