Net Neutrality & Control of the Ads Business

I’m Alan Chapell. I’ve been working at the intersection of privacy, competition, advertising and music for decades and I’m now writing for The Monopoly Report. If you have a tip to share in confidence, ping me at my last name at Gmail or find me on Twitter or Bluesky.

Our latest Monopoly Report podcast is out with Omar Tawakol - Former CEO of BlueKai and current CEO of Rembrand. Omar shares what in retrospect he wishes he had done differently with the Oracle Marketing Cloud, the importance of privacy at BlueKai and future opportunities in AI.

Looking back to a kinder, gentler ads business

The year was 2009, and I was on a panel at an iMedia event alongside Michael Kassan, Omar Tawakol and AT&T Chief Privacy Officer Dorothy Attwood. We were discussing the future of behavioral targeting. In stark contrast to Attwood and Kassan, I took the position that AT&T should be viewed very differently from most ad tech companies when it comes to behavioral advertising. Disagreeing with Michael Kassan is often a recipe for an uncomfortable panel discussion, but I believed (and still believe) that scale was a distinguishing factor as between AT&T and “most” of the then existing ad tech companies.

My thinking was that ISPs had the ability to collect web-wide data - and the scale of data collected was justification for holding ISP behavioral targeting to a different standard. Not to mention that ISPs had the ability to exert a tremendous amount of control over the entirety of the ads ecosystem.

I wasn’t the only person taking that position. And in fact, when we created the DAA Code a few years later, ISP tracking (and adware/trackware like Claria and WhenU) were subject to an opt-in consent standard, while the rest of ad tech was mostly subject to an opt-out standard. In my view, it made sense to treat web-wide data collection differently from relatively piecemeal data collection. Still does.

Perhaps those weren’t kinder days, but things sure felt simpler back then. You were either a part of new media - or you were not. ISPs were in the NOT camp - partly because their ability to collect web-wide data to create profiles and syphon off publisher data at a massive scale.

We are NOT telcos

Back then, the prevailing sentiment amongst what we now call the OG digital media crowd was that the telecommunications sector was decidedly NOT part of the new media community. They were the old - we were the new. And the “we” back then included Yahoo!, Google (who had by then acquired DoubleClick), Facebook, Myspace, Amazon as well as all the ad tech companies. WE were finding innovative ways to target and advertise - while THEY were engaging in deep-packet-inspection which would lead to the certain demise of the publishing industry.

Editor’s note: I’ve written a bunch lately on the role of terminology in the digital ads space - from fingerprinting to tracking to framing national security threats. In hindsight, the term “deep packet inspection” was probably a bit loaded. But the term was oft-cited in an ads context - and ISPs were generally kept out of the ad tech space. Until they started testing their own UID and buying ad tech companies. None of which went particularly well, but I digress…

Somewhere along the way, a few of the “we” circa 2009 grew into companies that rivaled and eventually dwarfed the size of the ISPs. As you are probably all too aware, some of them can now collect data on virtually every page and are to gate keep on a multitude of levels.

Net Neutrality

You may be wondering why I’m taking this trip down memory lane. A couple of weeks ago, the Sixth Circuit Court struck down the Federal Communications Commission’s (FCC) 2024 order reimposing net neutrality regulations on broadband internet service providers. Thus, ending a 20+ year battle over the role of the FCC in regulating the telecommunications providers.

What is Net Neutrality? Net neutrality has traditionally been framed as the principle that Internet service providers (ISPs) should make no distinctions between different kinds of content on the Internet - and they certainly should not discriminate based on such distinctions. The concept of ensuring a level playing field when it comes to telecommunications providers can be traced back to the civil war era when President James Buchanan signed the Pacific Telegraph Act in 1860 to ensure fairness in the creation and implementation of the transcontinental telegraph.

For the most part, net neutrality has been a partisan issue – with the Democrats favoring net neutrality in support of the edge providers and the GOP opposing it in support of the telecommunications sector. I won’t go into all the details of the arm wrestling between the two political parties over this time period. If you want to get a metaphorical sense of the back and forth that took place, I suggest you look here and here. Whether the decision from the Sixth Circuit Court REALLY represents the end of the war, or just the completion of another battle is to be determined. Without getting too political, it does feel like there’s lots of folks changing sides right now.

I’ll admit - I hadn’t thought much about the net neutrality debate over the past few years. I’ve been busy thinking about the demise of cookies and the attack on addressability - mostly coming from companies with massive footprints who won’t be impacted to the same extent as most of the rest of the ad tech community. And who all too often exert control over the ads ecosystem for their own gain - the same type of control that we once feared the ISPs would exert. (#irony).

In my view, some of the original framing around net neutrality is almost quaint. While I agree with Senator Markey and Wyden’s concerns (see below), I think its fair to ask that the protections they seeking being applied with consistency.

Will the demise of net neutrality impact data driven advertising?

For the record, I really don’t know. Maybe ISPs will be a more benevolent landlord than big tech. Perhaps the demise of net neutrality will further complicate matters. I recognize that the last thing anyone in this space needs is ANOTHER group of marketplace behemoths being able to throw their collective weight around. At this point, I feel like the ad tech community is akin to some native American tribe in 1776. Perhaps it’s best not to pick a side.

But I will say this….

If we’re going to have a debate about gatekeepers imposing theoretical tolls on the highway, it seems reasonable for the debate to include a discussion of the actual tolls we currently have to navigate.

My hope for 2025 is that policymakers in the U.S. agree.

Alan’s Hot Takes…

Here are a few additional stories that hit me over the past week:

• Anyone seen Judge Brinkema? – Remember that Google ad tech decision we were all expecting in late December. Welp, we’re half-way through January at this point. Unless page 6 or TMZ spots the honorable judge hanging on the beach in Cabo, I’d say the most logical conclusion is that there’s a settlement being discussed. If I were Google, I’d probably want to freeze any public announcements on the ad tech and other antitrust trials until Jan 20 and try my luck with the incoming administration.

• Privacy Sandbox Report from the CMA - Speaking of being MIA, many of us thought we would have heard something from the UK CMA about next steps for the Privacy Sandbox by now. And I’m curious to understand why the CMA chose to open a case against Google search and search ads rathe than finish what they started with the Sandbox.

• Precise Location - More bad press, a hack and a lawsuit from the Texas AG. At some point, all this commotion is going to have a negative impact on the supply of precise location. Anyone heard from Unicast?

If there’s an area that you want to see covered on these pages, if you agree/disagree with something I’ve written, if you want tell me you dig my music, or if you just want to yell at me, please reach out to me on LinkedIn or in the comments below.