When on December 14th, 2017 America’s Federal Communications Commission (FCC) voted 3-2 to remove network neutrality provisions it made a change that could have far reaching impacts on the datacenter world. Hailed by some and derided by others, the net neutrality repeal is controversial to say the least. But what will its impact on datacenters be?

Net neutrality is the idea that all traffic on the internet should be treated equally. The now-repealed provision stipulated that an internet service provider (ISP) could not charge customers differently based on the content they consumed. One gigabyte of data, it said, must be treated the same whether it came from Netflix or The New York Times. Proponents of net neutrality’s repeal argued that this, in effect, amounted to a subsidy of high bandwidth consuming sites by lower bandwidth consuming sites. Opponents of the repeal argued that ISPs would take this opportunity to extract more money from consumers, which would stifle growth. They would prefer that the internet be regulated as a utility, similar to electricity.

In the short term, datacenters are unlikely to see many changes due to net neutrality’s repeal. Customers may become more cautious as they wait to see what the ISPs do, but most things will remain the same. Longer term, however, the industry could face substantial upheaval.

As Frederic Paul of Network World points out, the nascent internet of things (IoT) which promises to generate troves of new data could suffer if ISPs decide to force users or providers to pay extra to have data transmitted quickly and reliably[1]. This could stifle innovation, as smaller providers find themselves unable to pay the required fee to get their products off the ground. Additionally, consumers may be less likely to purchase IoT-enabled technology due to its increased price.

If the opponents to net neutrality’s repeal are correct, higher prices are also in store for datacenter customers as ISPs begin charging them extra to transfer higher bandwidth content. This need not necessarily have a negative impact on the datacenters themselves, but it is unlikely datacenters will benefit from their customers paying higher ISP fees.

At a minimum, one potential consequence at least for datacenters in the United States may be that firms move their data to international datacenters in order to minimize their interactions with American ISPs. By moving data to European datacenters, for example, companies could avoid interacting with American ISPs unless their data is being accessed from America. This would minimize the fees that could be levied by the American ISPs.

On the whole, it is difficult to predict what the impact of net neutrality’s repeal will be on datacenters. Much will depend on how ISPs choose to wield their newfound powers. However, datacenter operators are well advised to continue monitoring ongoing developments in order to stay appraised of emerging trends.

Author: Thomas Menzefricke

[1] Paul, F. (2017, November 22). Will the end of net neutrality crush the Internet
of Things? Retrieved December 27, 2017, from https://www.networkworld.com/article/3238016/internet/will-the-end-of-net-neutrality-crush-the-internet-of-things.html