Manufacturing

Net Neutrality and Advanced Manufacturing: What’s at Stake

William Krueger / May 12, 2017

Net neutrality is the principle — currently enshrined as law — that internet service providers (ISPs) like Verizon, AT&T and Time Warner can’t prioritize some internet traffic over others. While its name suggests a lack of drama, the issue is anything but dull, especially for U.S. manufacturers looking to shift into high-tech gear.

Net neutrality’s merits and demerits — like anything else — are in the eyes of the beholder. Consumer groups and consumers love it. Content providers like Netflix, Hulu and Spotify do, too (although it could be argued some of them enjoy preferential treatment — the opposite of neutrality — already). ISPs, however, find it hampering. They claim it slows investment in internet infrastructure and hamstrings their efforts at innovation. Their best and most relevant gripe, however, is that it unfairly keeps them from exercising a competitive advantage that should rightfully be theirs.

Whose Internet?

As the builders, providers and purveyors of the information superhighway, ISPs want the right to favor some content and traffic over others in a way that benefits them, whether by boosting traffic and speed to their own content, apps and traffic or charging a premium for others’ to enjoy that same boost. The playground equivalent of “It’s my ball, so we should have to play by my rules;” their point is not without value. Still, since none of us can just go buy the equivalent of Comcast’s “ball,” it feels unfair. Are ISPs just asking for what they rightfully deserve, or are they the troll under the bridge we all have to cross to get to work?

For individual consumers and companies without deep pockets or their own internet, the current rules regarding net neutrality ensure a relatively level playing field. So long as you pay for access or log in at your local library or coffee shop, the online world is your oyster. You can surf the whole of cyberspace, build an app, pay your bills, troll your nemesis, check in on your network of connected CNC machines and rent out a room on AirBnB. The emails you send to grandma get to her just as fast as Bill Gates’ emails to his grandma. When you watch videos on YouTube, the content arrives just as fast and reliably as when you watch DirecTV NOW — even when you’re using AT&T, the company that just so happens to own DirecTV NOW.

net neutrality and manufacturing


And that’s where net neutrality gets dicey. If the current rules and regulations went away, your emails to grandma might be de-prioritized and put into a backlog in an attempt to get you to pony up more dough. Likewise, as ISPs get further into the content and app-building game, they may slow connections to a competitor’s site or charge a competitor more to get any traffic at all.

In the realm of advanced manufacturing, the implications of losing net neutrality become especially serious. The Industrial Internet of Things is projected to add $14.2 trillion to global economies by 2030 according to Accenture, and internet is literally in its name. In the United States alone, the IIoT could add as much as $6.1 trillion. Without widespread and full-scale adoption proceeds, though, those trillions will never materialize, and an obstacle-free, reliable, fast and low-cost internet is to their materialization.

And it’s not just about GDP and capital gains. Here’s a closer look at how net neutrality benefits manufacturers in advancing their goals and what you can do to help ensure it stays the law of the land.

Innovation Needs It

What are your plans for the future? According to a 2017 PWC Industrial Manufacturing report, there is a growing tendency among industrial manufacturers to slow investment and adoption of Fourth Industrial Revolution technology — at least for the time being — even while recognition of the importance of such investment and adoption grows. Amid global political uncertainty like Brexit and slowing demand for manufactured goods, such a pause may at first glance appear prudent. However, if sales continue to lag, inventory continues to grow and policy uncertainty doesn’t disappear, increasing productivity while cutting costs will become even more essential to organizations’ survival. Innovation in such a climate is not an option; it’s an imperative.

net neutrality and innovation


Which is why the FCC chair’s threat to end net neutrality is such a bummer. An internet that works best for the highest bidder and meh for everyone else is not the kind of supportive environment that fosters innovation. Especially considering the fact that some of the world’s most profitable and innovative companies were built, not in spite of unfettered and affordable access to the internet, but because of it. Without the principles of net neutrality in place, innovation would slow to a stutter-step in every corner of the industry not currently flush with cash.

The Price of Fair

Such a scenario might initially please industry heavyweights and the internet service providers who stand to profit, but for any small manufacturing company, CNC machine shop or tech startup, ditching net neutrality will ensure hard work gets even harder. Not only will it make it more difficult to use the same internet at the same pace as more established players, but attempts to do so could be very expensive. Also, just because a small fry or newcomer raised enough capital to pay for a fast lane on the superhighway wouldn’t even guarantee internet service providers would let them buy their way onto the fast track.

All’s fair in love and war is also a truism of capitalism. Without net neutrality in place, if an ISP perceived — rightly or wrongly — that a tech startup, content-streaming service, online CNC machine shop or manufacturing company posed a competitive threat to some of their own aims, they could effectively keep that startup, service or company from being able to fully wield the most valuable tool of the 21st century. Especially given the reality that some communities and regions can only purchase internet service through a single provider, the threat of ISPs functioning like monopolies is real. From slowing access and speeds to competitors’ sites, apps and content to making it difficult for competitors to access much-needed services and programs based in the cloud, innovation — outside that achieved by ISPs and their partners — could slow to a trickle. As the rest of the globe speeds up its investment in Fourth Industrial Revolution tech and the IIoT, such a scenario could prove ruinous for U.S. manufacturing and tech as a whole.

Be Careful What You Wish For

No business ever operates in a vacuum. When a Fortune 100 company is able to pay more for better and more reliable internet use than a disruptive innovator is, both companies will inevitably suffer. Competition, after all, isn’t just good for the consumer; it’s good for the companies competing, because it keeps everyone on their toes, fighting to improve.

Competition is the stuff innovation is made of. In advanced manufacturing, a free and open internet is its fertilizer. Established companies with a lot of capital and customers tend to innovate at a slower pace than smaller, more flexible companies, who aren’t beholden to years of R&D, shareholder profits and other tethers. By applying the tether of expensive and/or crummy internet access, these newcomers will struggle to help push innovation forward.

Competition has always been a incongruous but collaborative game of winner-takes-all. In the 21st century, advanced manufacturing tech — particularly tech that’s powered by and dependent on the internet like big data, AI, digital twin, the IIoT, etc. —  needs net neutrality to ensure collaboration is the norm so winning can still happen. If the FCC throttles the open internet, it make it more difficult for U.S. manufacturers, inventors, researchers and entrepreneurs to push one another forward, which will make it all the more problematic to compete globally.

Choosing Collaboration, Not Just Competition

So, let’s not do it.

The FCC is taking public comments on net neutrality until May 18th. If you believe an open and free internet benefits your business, then speak up about it. The United States won’t transition into the world’s advanced manufacturing leader unless we take investment in advanced manufacturing seriously, and removing net neutrality is more likely to hamper that effort than help it.

It’s true that for the big players and ISPs, removing net neutrality will make competing locally easier, but competing globally is going to require everyone: the disruptors, the CNC machine shops, the upstarts, the know-it-alls, the college kids and the nerds. American manufacturing has weaknesses that can be exploited, but if we nurture the competition that’s taking place in our own backyard and treat it more like a collaborative partner than a threat, we’ll be able to harness the energy, investment and brilliance that has served us so well in the past.

Tell the FCC what you think about net neutrality here. All you have to do is click on “Express” and fill in the fields. Change is never easy, but we should at least work to make sure it happens on our terms. Net neutrality will keep U.S. manufacturing in fighting shape, and in the coming years, that’s exactly the shape we need to be in.

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