The vote by the American Federal Communications Commission to repeal internet neutrality, and treat the internet as a product rather than a human service, is going to have a significant impact on efforts at financial inclusion in the US, including the research and development of new fintech solutions.
Internet neutrality, commonly referred to as net neutrality, was an effort by the previous administration to ensure that information that moved across internet lines is treated as equal. This attempt to level the playing field meant that some information cannot be determined to be more important or less important, and the bandwidth over which it travels costs the same, regardless of the type of information. The decision rested on the definition of the internet. Is the internet a product, or is it a human service? If a human service, government regulations would ensure that it was not monetized to the detriment of some segments of human society, and that access was equitable. If it was a product, then the free market would allow it to be bought and sold.
The decision was that the internet is a product, and will be allowed into the free market, without regulatory restrictions on how much can be charged for internet access. The two commissioners who dissented in the 3-2 vote suggest that the repeal will disproportionately affect rural, vulnerable, at-risk communities, and communities of color. But how will this decision reverberate across the world, and will other regional efforts at financial inclusion be impacted?
While individual countries and regions have their own regulatory agencies that set policy, many global communication, information, and financial services companies are headquartered in America. This move by the FCC may encourage the development of regional financial and communication services technologies and their related industries. If global communication and financial hubs move from America to Africa, South Asia, and South America, the countries and regions who have been working to develop financial inclusion and new digital fintech may continue to see gains.
Many microfinance initiatives have sought to develop ecommerce and other internet-based small businesses. This global startup market will be affected by less access to open markets in the US.
The FCC has suggested that fintech research and development and new digital technologies have been stymied by internet neutrality, and that the repeal will increase research and access to capital for development of these products. This assumption appears to be based on the idea that trickle-down economics actually works. However, when regulatory efforts concentrate power, control over communication, and financial resources into the same hands, the likelihood that a vibrant startup culture will bloom as a result is ludicrous.
Several countries already have regulatory structures in place without neutrality laws, and internet services are sold mostly as packages, with social media packages, TV packages, and lower-priced email packages. While the internet has been developing a love affair with video marketing, art, education, and communication, it is likely that this wave of development will stutter or stop.
It is unlikely that the financial inclusion efforts of the major economies in the developing world will stop their efforts with the loss of a neutral internet in the US. But America may very well lose leadership and the brightest young minds working in the research and development of new digital technologies. At best, this American decision will be a lesson for other economies in how restriction and sale of information and communication impact economic development and human culture.
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