Decentralization, Deregulation, and Blockchain Technology: Externalities of Policy
As Internet-powered businesses and services are becoming the norm within the global economy, it naturally follows that political realities will begin to impact this still nascent industry in an accelerated manner. This in mind, there is one recent political development in the United States that could potentially have disastrous effects on the most network-dependent technology companies.
On December 14, 2017 the FCC (Federal Communications Commission) voted - in a 3 to 2 decision - to repeal their enforcement of net neutrality. This is a repudiation of the agency’s 2015 regulatory decision, which was to ensure the equal treatment of ISP (Internet Service Provider) customers. Currently, there is none of this “net neutrality.”
In effect, net neutrality is the regulation of the Internet with egalitarian intentions. Net neutrality ensures that service providers can’t charge different rates for different internet data, can’t treat some media or content differently with regards to how traffic is handled, and can’t throttle bandwidth. These protections are now gone.
Net neutrality stops companies from slowing down or blocking access to competing sites. For instance, what keeps a major telecommunications carrier from creating their own streaming platform and then slowing or blocking access to streaming sites like Amazon or Netflix to deliberately stifle competition?
Lack of regulation begetting uncompetitive and unfair corporate action isn’t hypothetical at all. In fact, ISPs have a history of doing this. In 2005, Comcast slowed speeds (throttling) to some file sharing and torrent sites. In 2014, Verizon blocked access to Google Wallet to sway users to use Verizon’s own Isis Wallet. And while a name change might have been a better decision, the truth is that without net neutrality, the internet is not a truly free place.
An absolutely incredible amount of cryptocurrency transactions occur via exchanges. If so inclined, ISPs could target cryptocurrency exchanges, slowing them down or banning them altogether. Assuming cryptocurrencies continue their historic rise, there will be noticeable monetary incentive for ISPs to invest in or develop their own exchanges and subsequently limit access to their competition. In addition, they could throttle connections to blockchain websites and the user interface of various blockchain applications they deem “competition.” A simple action such as slowing down the API (Application Programming Interface) that the user interacts with would slow the entire application. To convey this concept in different terms, it doesn’t matter how fast and smooth Candy Crush runs if the entire App Store is unusable.
If there’s one thing being revealed in this increasingly technology-focused era, it is that the need for decentralization is more critical and necessary than ever. We as a worldwide community need decentralization - we need to be empowered and feel that we have a voice within a system. We have the power to protect ourselves, our assets, and our future. This revocation of net neutrality is a wake-up call.