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Trump's FCC pick may trim net neutrality rules -- what's a CIO to do?

With Ajit Pai likely to roll back regulations governing internet providers, IT leaders need to ponder an uncertain future.

Back in December, Ajit Pai, a Republican who has served on the Federal Communications Commission since 2012, talked about cutting down FCC rules that were "holding back investment, innovation and job creation."

He'd use, he said, a weed whacker -- a garden tool that edged into headlines this week after President Donald Trump picked Pai to head the FCC. Pai voted against the net neutrality rules passed in 2015 that require internet service providers (ISPs) to treat all web traffic equally. The fear persisting among many consumers and IT pundits and IT workers alike is that a deregulated internet would become a laissez-faire playground dominated by the AT&Ts and Verizons of the world, which control the pipes, and treacherous terrain for small businesses, which pay to access them.

For CIOs and their IT teams, who ensure the internet flows freely and swiftly throughout their organizations, the changing of the guard at the FCC demands attention. Corporate IT will need to be nimble enough to absorb the aftershocks -- and more strategic.

"You're going to need to buy your internet access on a proactive basis," said Lisa Pierce, analyst at market research outfit Gartner. IT needs to be "really looking at the providers, really looking at performance, really looking at time to repair and customer services support. It's time to stop treating internet access on an ad hoc basis."

Not that Pierce sees internet prices necessarily rising should net neutrality rules be repealed. The "open internet" regulations have only been in effect for a short time, so not much has changed, for good or bad, she said.

IT worried about a repeal

But plenty of people in IT see a repeal causing harm. A survey conducted by Spiceworks found that 59% of 411 respondents believe internet costs for their organizations will go up if net neutrality rules are cut back. And 47% think their access to internet services will be degraded.

Peter Tsai is an IT analyst at Spiceworks, which makes free help desk software and also serves as a peer forum for IT professionals. He said the results of the survey jibe with the concerns he hears from IT folks on net neutrality, in person and on the site. For example, 82% of survey respondents backed net neutrality. And among the 100 responses to a recent post, there were just a few "who were in favor of repealing the current regulations, because they think that they unnecessarily put a burden on ISPs," Tsai said.

An ISP slowing down access to Netflix in favor of another service -- say, Comcast, which owns NBC -- is a consumer-related example Spiceworks members have cited. But there are business concerns as well.

"What if that was, say, your email service that you rely on? Or if it was one of your financial applications, or if it is your voice-over-IP system that you really need to function as a business?" Tsai said. "What happens when ISPs decide to start charging hundreds or thousands of dollars more just to use the same services that you're using now for the same quality of service? That's going to affect their bottom line directly."

Contingency plans

Pierce said she doesn't foresee ISPs discriminating against a particular provider -- say, a video streamer like Netflix or more business-oriented services like Skype. But ISPs can partner with certain application providers and give them preferential treatment.

"You're not discriminating against anybody; you're discriminating in favor of a certain provider. That's different," she said.

In that hypothetical world, Pierce said, enterprise architects may have to more closely evaluate what applications they sign up for.

"That probably is going to need to be part of their RFP criteria if net neutrality goes away," Pierce said, referring to a request for proposal, the document that kicks off the bidding process for a service. "Because you can envision a scenario where certain application providers and certain service providers are going to form alliances."

Above all, Tsai said, organizations should keep a sharp eye on what's happening and what the orders coming out of Pai's FCC mean for them. For example, if rule changes lead to ISPs charging more money for fast lanes to services or applications, big corporations can afford the bills; smaller companies might not.

(Pai issued a plan Friday to scale back transparency measures for providers with 250,000 or fewer subscribers. The order will waive requirements to submit information to regulators and consumers on fees, data limits and speeds for five years.)

"I'm not saying it will happen, but people should be aware of the potential consequence and the fallout if it does and have plans to react to that," Tsai said. Contingency plans include alternatives to a principal ISP in case internet services get cut off -- something Spiceworks members often wrap into their disaster recovery plans, he said.

"But it's anybody's guess what will actually happen, because it is a theoretical debate currently."

CIO news roundup for week of Jan. 23

Net neutrality rules ranked high in tech news this week. Here's what else was happening:

Oracle announces layoffs. In a move to focus on its cloud offerings, Oracle is laying off about 450 employees in its Santa Clara, Calif., SPARC hardware systems division. The Santa Clara facility is not closing; rather, Oracle is refocusing its hardware systems business and has therefore decided to lay off certain employees, Oracle wrote in a letter to the California Employment Development Department, the Mercury News reported. The employees being fired include hardware and software developers, according to the same Mercury News report. Oracle has also stalled the development of the Unix operating system Solaris. Solaris and SPARC were part of Oracle's $7.4 billion Sun Microsystems acquisition in 2010. Reports from The Layoff also claim that Oracle is firing about 1,800 employees companywide.

Facebook hiring former Google exec to lead VR.  Xiaomi executive Hugo Barra will be joining Facebook to steer its virtual reality initiatives, including heading the Oculus VR team, Facebook announced Wednesday. The news comes within a week of an intellectual property lawsuit against Facebook-acquired Oculus going to trial. Barra, who is credited with leading Xiaomi's global expansion efforts, will return to Silicon Valley after he transitions out of his current role at the Chinese tech company in February. "Hugo shares my belief that virtual and augmented reality will be the next major computing platform ... Hugo is going to help build that future, and I'm looking forward to having him on our team," Facebook Chief Executive Mark Zuckerberg wrote in a Facebook post. Before joining Xiaomi, Barra served as Google's vice president of Android product management.

IBM acquiring cybersecurity startup. IBM Security is acquiring cybersecurity software firm Agile 3 Solutions, IBM announced Monday. The San Francisco-based startup develops software to help C-suite and senior executives better manage and understand the risks associated with protecting corporate data. "Adding Agile 3 Solutions to the IBM Security immune system of capabilities gives our team the ability to not only protect critical data, but demonstrate why it is at risk and how to remediate that risk," said Marc van Zadelhoff, general manager at IBM Security. In other cybersecurity investment news, Microsoft announced it will continue to invest over $1 billion a year on cybersecurity research and development, outside of acquisitions the company may make in the sector. "As more and more people use cloud, that spending has to go up," Bharat Shah, Microsoft vice president of security, told Reuters.

Assistant editor Mekhala Roy contributed to this week's news roundup.

Next Steps

Check out our previous Searchlight roundups on the Oculus trial, the FTC's PrivacyCon and the CIO angle on CES 2017.

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