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How Will Net Neutrality's End Impact Your Credit Union?
Tuesday, February 13, 2018 6:40 AM

When it comes to talk about the potential impact of the recent Federal Communications Commission's decision to end net neutrality, which prohibited internet service providers from discriminating against any lawful content and applications, you may hear silence throughout credit union land. But some credit union professionals are trying to sound the alarm and warn the industry that the removal of the net neutrality rules may lead to serious repercussions in operations, payments, and marketing.

The rollback of net neutrality rules will mean that internet service providers could refuse to let their customers access certain websites or slow down content from those websites, which would essentially create fast and slow lanes for web content. ISPs would do this to promote their own content or the content of their partners and affiliates, and charge content providers to reach consumers, according to Consumer Reports. Moreover, similar to cable and satellite television companies, ISPs now have the green light to create tiered service packages that would charge customers higher fees for premium services or other packages with different prices, including plans that block users from instant messaging, video sites, Skype and other services, according to an analysis by Politifact, an independent fact-checking site.

Jordan Lampe, head of strategic products for the Iowa-based payments innovator Dwolla, warned the rollback of the net neutrality rules would be bad news for the payments side of a credit union's business.

“If you thought negotiating to get access to ApplePay as a payments provider was a nightmare, imagine trying to broker deals with Comcast,” Lampe said. “Getting rid of net neutrality will reshape the way banking apps are presented — and you thought ‘top of wallet’ was a big deal — introduce a new era of financial service and ISP negotiations, and possibly create the next generation of interchange. The FCC is playing with fire, but we’re the ones who are going to get burned.”

Another problem credit unions should be aware of is that the absence of the net neutrality rule could also have a big impact on digital marketing for selling loans and attracting new members.

Marne Franklin, digital director for Your Marketing Co. in Greenville, S.C., explained ISPs could form agreements that could benefit their content or the content of their business partners, which could jack up the price for marketing ad space.

For now, and into the foreseeable future, the rollback of the net neutrality regulations are expected to be challenged in the federal courts, which could temporarily delay any plans by the ISPs to change the internet.

Last month, attorneys general from 22 states and the District of Columbia filed a lawsuit in the U.S. Court of Appeals for the D.C. Circuit to block the FCC's decision to rescind net neutrality. The states included California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and the District of Columbia.

Read more on this issue at Credit Union Times.