The branch is dead. Imagine a world, not too far from now, where the vast majority of banking occurs digitally via some kind of device, PC, smartphone or tablet., Now imagine that world without net neutrality. A world where the owners of the ‘last mile’ of broadband, the essential, single threaded link between you and your online bank, can accept payment from content providers to control the speed of that connection, how much the transaction costs – or even access to that connection at all.
The net neutrality rules drafted by the Federal Communications Commission, currently out for public consultation, provide a relatively level playing field so that the concept of an Internet “open for all” is maintained. However, the rules, as drafted, would allow for ‘paid prioritization’ giving ISPs the opportunity to deliver content providers with faster connections to their consumers. Streaming content providers are the ones that will be at the forefront of the paid prioritization debate, and already have been. Comcast and Netflix reached an agreement in February of this year whereby the streaming video content provider will pay Comcast for faster and more reliable access to Comcast’s customers. Netflix signed a similar agreement with Verizon in April but continue to spar over who is to blame for degradation in speeds to consumers.
When it comes to Internet banking, it is hard to imagine a scenario where the mega-banks are in a position to enhance their competitive situation over community banks and credit unions through negotiating paid prioritization directly to their customers’ devices. Or is it? But there is an alternative to the wild west of totally open Internet and the FCC’s current rules – make Broadband a utility.
If broadband access were to be considered a utility, in the same way that telephone networks are, then fair access is provided to all and the service is regulated. The providers proclaim that such a move would herald the end of investment and innovation, but that should not be the case. Allowing a monopoly of broadband providers by geography will kill innovation, a regulated level playing field for content providers will not. Consider this: There is no difference in the quality of the call, from the phone to the exchange, when a customer picks up the phone and calls their local community bank or the call center of mega-bank – it’s the quality of the service once the call is connected that dictates customer satisfaction. Similarly, it seems right in this new era where broadband has moved from nice-to-have to necessity that quality of broadband service should not be constrained or enhanced based on the financial power of service providers who themselves are broadband company customers. Retail banks should provide competitive advantage via the products and quality of service they provide to their customers, in their ability to be innovative in their digital messaging content, not on the deals they strike with the ISPs.
For further insight reach out to John Vance at firstname.lastname@example.org.