Back in January, I wrote a piece about the dangers of not getting engaged in the “Net Neutrality ” debate. The bottom line was this: “…it’s important! Edmund Burke, an 18th Century Irish political thinker and troublemaker, is quoted as saying that ‘people never give up their liberties but under some delusion.’ In this case, the delusion is twofold: first, that Internet bandwidth is infinite, and secondly that competing corporations will be good citizens and not try to take advantage of the lack of legal or regulatory protections when it comes to Internet access to bandwidth. “

Well, it sure didn’t take long for the second part of that warning to manifest itself. On February 23, TIME magazine reported the following: “Netflix will pay broadband provider Comcast to improve streaming for its customers, under a multi-year agreement to allow the video-streaming service direct broadband access… The deal will allow Netflix to improve its streaming speeds, which have been slowing dramatically in recent months for Comcast users due to overwhelming traffic. The companies announced the deal in a joint statement Saturday, but did not disclose the agreement’s details. “

A related TIME article, Here’s Why Your Netflix Is Slowing Down(Feb. 19) explains: “…with the explosion of high-bandwidth services like Netflix, which accounts for a massive amount of Internet traffic, the traditionally amicable peering relationship between bandwidth providers is starting to break down. Consumer broadband companies like Verizon and Time Warner Cable are increasingly demanding payment from intermediaries … in order to carry high bandwidth traffic in excess of peering agreements from other service providers. This feud is now harming Netflix service for consumers, according to the Wall Street Journal… This is a scenario that open Internet advocates have been warning about for years. “

So, consider yourself warned.

Why Should Retailers Care?

It’s possible that you don’t see the connection between selling products and Internet bandwidth. After all, products are made of atoms, not bits, and the Internet’s job is to deliver bits. But if you happen to be working for Amazon, Barnes & Noble, or Walmart, be concerned because your company offers streaming video (searching Google for recent statements regarding their positions on net neutrality, I couldn’t find anything!).

But if you’re not from one of those companies, perhaps you should think a bit too, about the extent that you will be providing rich (video) content to your customers on the e-Commerce site. RSR did a consumer panel study recently, and we found that 40% of consumers shop at home at least “sometimes “, and that this behavior is driven by “mobile pad ” devices (rather than PCs or mobile phones). And the big advantage of mobile pads (aside from the obvious: they’re mobile!) is that they are big enough and fast enough to show videos.

Now, think of how your customers would feel about your company if videos showing off your Brand’s value were slow and choppy, pixelated, or causing iPads to display the dreaded spinning pinwheel of death. Welcome to the world of net un-neutrality.

Trade Orgs Need to Speak Out

The retail industry is famously disaggregated, but it is not powerless. Political pressure can, and should be brought to bear on the subject of net neutrality, because the vested interests of net un-neutrality are already exerting pressure.

So “how much pressure “? An opinion piece in the San Francisco Chronicle on 2/26, entitled FCC Throws In The Towel, But Public Has Right To Know Why shed some light. The author, James P. Tuthill (who teaches telecommunications, broadcast and Internet law at the UC Berkeley School of Law), explained:

“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… The failure of the chairman to seek review raises legitimate questions about the reasons for declining to appeal. Previously, he was the president of the National Cable Television Association and president of the Cellular Telecommunications and Internet Association. Cable television and wireless providers strongly opposed the net neutrality rules, and they must be secretly congratulating themselves over Wheeler’s decision not to appeal. “

The implication in the opinion piece is clear: there’s a fox in the chicken coop. And this is why I hope the leaders of retail’s trade associations will speak out on the issue, to provide the counter-balance to even an unintended bias towards cable and telecomm providers on the part of the FCC.

Retail is a huge industry, and must protect its interests. And in this case, retail’s best interests are served if the Internet remains a “freeway ” rather than a “toll road “.