Back in 2005, UK-based future scenario planner and author Eamonn Kelly published Powerful Times: Rising To the Challenge Of Our Uncertain World. The author stated, “…today’s global economy depends heavily on the developed world’s physical infrastructure; its components literally enable the international flow of goods and services. We tend to take this for granted, assuming that this critical infrastructure will always be there… “. Although Kelly wasn’t specifically including the Internet in physical infrastructure, he threw it into the discussion later in the book, quoting his colleague Andrew Blau (currently President of the Global Business Network): “Broadband’s wide use…foster business choices that will in the future shape this market around the assumption of widespread access to high-speed connections. “

All of that was said in 2005, not even ten years ago — how the world has changed! Now in 2014, the prediction that broadband access would be assumed has come true. How assumed? I consider myself a pretty informed consumer on things technical, and I certainly take it for granted. So when I get a message just about every month from my cellular carrier that, “more than 90% of the 1 GB of shared data for your plan has been used for the current bill period, which ends in 3 days, ” I get irritated. One GB…hmmm, I remember signing a contract for 1 GB of mass storage for our data center for about $1M around 20 years ago. Now I assume that I can eat up that much in bandwidth on a monthly basis with impunity.

But here’s another angle on how assumed. Two of the world’s biggest retailers, Walmart and Amazon.com, are locked in deadly hand-to-hand combat for consumers’ hearts and minds via the Internet. On Sunday August 4th, the Boston Globe reported that Walmart is relaunching its website to appeal more to consumers by rolling out a feature that will enable its website to show shoppers more products that they may like, based on previous purchases. It will also customize Walmart’s home page for each shopper based on the customer’s location, local weather and the customer’s search and purchase history. Of course, 100% of Amazon’s sales come from online shoppers, while only a fraction of Walmart’s sales do (a mere $10B fraction!), but the bigger question is, how many of Walmart’s shoppers assume that they can investigate and/or buy whatever they are looking for wherever and whenever it’s convenient for them to do so? Without the benefit of statistics, I’ll still venture that the number is big, as in a majority of Walmart shoppers, with more to come. Our own soon-to-be published report on the state of cross channel gives us a sense of the importance of this for the overall industry:

To sum it up: retailers (and especially over-performing Winners) expect consumers to use their access to the Internet as part of their shopping experience. And Kelly and Blau’s predictions are true — the Internet is now a fundamental part of the physical infrastructure used to support global trade, and (like other infrastructural components) people expect it to be there, all the time.

So, What’s Up With The Net Neutrality Debate?

Here’s a quick overview of the current Net Neutrality situation. The Internet is currently classified as an information service, and thus, according to a Washington DC District Court decision handed down earlier this year, the Federal Communication Commission (FCC) cannot prevent commercial interests from prioritizing higher speed bandwidth to those who are willing to pay for it. The analogy I used in my January 2014 Retail Paradox Weekly post was this: “If you’ve ever driven from Arizona to Texas on U.S. Interstate 40, you can see [that it’s] full of Walmart, Walgreens, and other retailers’ 18 wheelers, bringing products to market day and night. Now imagine if Walmart paid for preferential access to the left lane. That’s what the court’s action enables on the Internet. “

At the FCC’s Open Meeting in May 2014, the Commission introduced its new proposal for Net Neutrality rules. But the proposal still allowed for fast lanes and slow lanes online. The period for public comment closed on July 18th, but a quick scan via Google doesn’t reveal any public comments from retail trade associations such as the National Retail Federation (NRF). But many business and consumer advocacy groups are urging the FCC (and possibly the U.S. Congress) to reclassify the Internet as a telecommunications service, thus putting it within the scope of the FCC’s regulatory control.

In the meantime, Verizon (one of the companies involved in the successful Court challenge to the FCC’s Net Neutrality rules) announced on July 25th that it will begin to throttle network speeds for some of its users, presumably to make more available for other, more lucrative, customers. The FCC Chairman, Tom Wheeler, issued a letter to Verizon expressing his concern over the company’s move. But what it means in practical terms is that the push by corporate entities to segregate bandwidth for different classes of users has begun. And one can only expect this to continue.

None of this should be a surprise. In another Retail Paradox Weekly column in March, I quoted an article from the San Francisco Chronicle on 2/26, entitled FCC Throws In The Towel, But Public Has Right To Know Why:

“The Federal Communications Commission said last week that it would not appeal a court decision issued in January overturning the FCC’s net neutrality rules, Verizon vs. Federal Communications Commission. Those rules prohibited discrimination and blocking by Internet service providers that provide high speed connections to the Internet. Tom Wheeler, chairman of the FCC and an Obama appointee, said that the FCC supports an open Internet and will develop new rules to replace those thrown out by the court. But for practical purposes, he threw in the towel. And the just-announced deal between Comcast and Netflix for preferential delivery shows how quickly the industry will move to capitalize on its now unrestrained power…”

So Here We Are, But Where Is That?

The truth is, both Amazon and Walmart and a number of other large retailers will have the wherewithal to get what they need to deliver a great experience to consumers via the Internet connection of their choice, but (obviously) the playing field will be far from level. But without exerting industry-wide pressure on regulatory bodies, the retail community as a whole will have no voice in the outcome of this debate. So one last time, or forever hold your peace! Get out your Internet connected technology and send a message to your government and industry representatives to express your concern (if you can get the bandwidth).