What will happen to UC now the FCC changed net neutrality?
How Net Neutrality Roll Backs May Impact the UCaaS Community
Today, the FCC passed Ajit Pai’s proposal to roll back net neutrality regulations.
As with any change, it’s important to see how a policy affects everyone, directly and indirectly. That includes everyday users of the internet—a perspective consuming social media and Reddit. (Nothing inspires a grassroots movement faster than threatening to retard or block someone’s access to their Netflix account.)
This ruling also influences businesses that make the internet. . . well, their business. Jive Communications falls under this category: they provide enterprise-grade Hosted Voice over Internet Protocol (VoIP) and Unified Communication as a Software (UCaaS) to businesses and institutions worldwide.
To better understand the effects this rollback in net neutrality may have on internet-based services and industries, I talked to Matt Peterson, a Jive co-founder and current CMO, about Pai’s FCC proposal.
How will the roll back of FCC net neutrality affect the UCaaS community?
“For less sophisticated, legacy, or hosted providers that are running one large datacenter with one backup, the change of net neutrality could negatively affect their voice quality, connectivity, and ability to compete for customers in certain geographies and demographics.”
How will the change to net neutrality affect Hosted VoIP and UCaaS start-ups?
“It will make it harder for start-up businesses to compete with legacy and service and infrastructure providers. This change will enable larger corporations to engage in monopolistic and predatory competitive practices, including slowing down or even blocking IP traffic from competitors, start-ups, or smaller firms with less leverage and buying power. It could also affect the start-up community’s ability to communicate effectively and expand into certain markets, effectively curbing free speech and diluting the transparency that helped spawn many (especially Internet) start-ups.”
—Matt Peterson, Jive CMO
The Fate of Hosted VoIP Start-Ups and Industry-Leaders
What’s particularly poignant about Matt Peterson’s prediction that rolling back net neutrality will “dilute the transparency that helped spawn many (especially internet) start-ups,” is that Jive is one of those very start-ups. As a bootstrapping co-founder of Jive, Matt Peterson experienced the early days of Jive—when they interviewed candidates at the nearby McDonalds because they didn’t have a large enough office. Eleven years later, Jive has over 500 employees and was named one of the 2017 Next Billion-Dollar Startups by Forbes.
Are industry-leading providers like Jive completely safe? Matt Peterson is confident Jive can weather changes in net neutrality:
“The change to net neutrality will affect Jive’s ability to route voice traffic to the most efficient routes over the Internet. Jive is better positioned than the vast majority of the business VoIP/UCaaS community to handle net neutrality issues as it runs its own BGP protocols, and is already actively routing traffic around problematic routes. The change would cause Jive’s LCR (least cost routing) protocols to become much more active to maintain voice quality.”
Matt Peterson’s prediction is the most probable outcome. Yet, in Matt Grech’s excellent article for GetVoIP, he entertains an even darker, hypothetical scenario for industry-leaders:
“Some of the popular Business VoIP providers will simply piggy-back off existing ISPs to deliver their data, meanwhile AT&T, Comcast, Time Warner and Verizon are both Internet Service Providers and VoIP providers. So they could simply throttle Nextiva and Jive’s traffic, while favoring their own.”
(Did you notice that this hypothetical included Jive?) It’s an extreme scenario, but Matt Grech’s article is just illustrating all the possibilities for the Hosted VoIP community. Not only are start-ups within the internet-based services likely disadvantaged, but even the most popular VoIP providers may experience discrimination from powerful ISPs.
Hosted VoIP and UCaaS in Net Neutrality “Free” Countries
We can also create a rough sketch of the UCaaS community’s future by looking abroad. Jive provides Hosted VoIP for clients residing in countries that already lack net neutrality, like Brazil. I talked to Dano Ybarra, Vice President of Jive’s International Business Development, who works with many of our international clients.
How are Hosted VoIP and UCaaS companies affected working in countries without net neutrality?
“In some countries, the dominate internet and voice service provider installs software on their network to disrupt any competing service’s streaming traffic. In other instances, a lack of net neutrality enables dominate players to charge additional money for providing the same Internet access. For example in Brazil, there is one case where a specific service provider will not allow Jive traffic at all. Fortunately it’s a smaller player and we can route around them. ”
—Dano Ybarra, Jive
How does net neutrality affect the Hosted VoIP and UCaaS markets?
“In countries throughout the European Union, we see a rich set of new applications emerging almost daily. This is a healthy environment where the people decide the winners and losers based on the merits of the application—not based on a dominate internet provider’s preferences.
Included in this is the opportunity to find a more flexible, robust, and scalable way for a business to deploy a voice and communications system. Jive is delighted to compete with other Hosted VoIP and UCaaS vendors on a level playing field. However, if any internet provider has the ability to favor a particular vendor by regulating traffic speed, quality of traffic, or charging additional fees for access, they are in a position to win every time. Everyone else suffers through the creation of a virtual monopoly. No one suffers more than the business because the business no longer has the ability to choose the best solution for their needs.”
—Dano Ybarra, Jive
Businesses, Call Congress!
It’s important to recognize that the FCC’s decision to change net neutrality not only affects our mundane, everyday Netflix access, but it also affects the everyday lives of businesses. It will affect VoIP providers, other businesses that provide internet-based services, and any companies that use internet-based services.
It also influences communities and local economies. Jive’s start-up origin story is just one of many bootstrapping companies that make up Utah’s Silicon Slopes. Currently, four unicorn companies are community members of Silicon Slopes: Qualtrics, Domo, InsideSales, and Pluralsight. This burgeoning tech community contributing to Utah’s economy has earned a well-deserved reputation for being a start-up friendly environment.
In short, US businesses and communities will undoubtedly see consequences. That’s why, as a business owner and leader, it’s in your best interest to make your opinion heard—whatever your views may be.
While the FCC passed Pai’s proposal today, luckily there is a way for companies to actually have a say in policy that will dramatically impact their business: Congress. The real power resides with the US Congress. Alina Selyukh, an NPR tech reporter, explained on NPR Politics Podcast that “the only thing that can potentially settle the debate is a congressional effort to write some kind of law to guide the FCC through this.”
Mignon Clyburn, an FCC commissioner, also emphasized this in today’s ruling: “The agency does not have the final word.” Again referencing the power of Congress, Clyburn calls today’s ruling a “temporary deviation from the bipartisan path that has served us so well.”
Business owners and industry leaders need to speak on behalf of their company and employees. We’ve seen a lot of inspiring activism from individuals, but wouldn’t it also be brilliant to see businesses join a grassroots movement that lights a fire under Congress to settle this net neutrality issue once and for all?
I think the CTA is pretty clear here: Call My Congress