By Ray Birch
PLANTATION, Fla.—The FCC’s repeal of net neutrality rules may widen the competitive gap between credit unions and banks, and present a real challenge to the future of the movement, asserts one person.
Joe Winn, author of The Credit Union Geek blog, told CUToday.info he fears big banks may benefit from their wide reach, greater influence with Internet service providers (ISPs) and deep pockets to gain easy access to high-speed data lanes that could emerge on the Internet as a result of the repeal of the net neutrality rules—while at the same time many credit unions, particularly smaller ones, could get dumped into slow data lanes, markedly reducing member service.
“This ruling by the FCC could be rough on the smaller financial institutions because the playing field won’t be level,” said Winn, who is also president of GreenProfit Solutions.
Winn emphasized that if credit unions are placed into slow data lanes by their ISPs, home banking, website and mobile app performance could suffer, while at the same time the website and mobile performance of big banks could improve.
“Say members begin experiencing slowdowns with their credit union’s web tools, they might begin to stop using the tools, knowing they have a Bank of America account that works a lot better,” said Winn. “They may just decide not to deal much with the credit union.”
Winn also fears that ISPs, should a disagreement with a credit union arise, could block access to a CU’s sites. Winn’s concerns for net neutrality’s impact on CUs are stronger than those shared by two experts in a previous CUToday.info report.
The landmark decision by the FCC to dismantle rules regulating the businesses that connect consumers to the internet, has granted broadband companies the power to potentially reshape Americans’ online experiences. The FCC scrapped net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. The federal government will also no longer regulate high-speed Internet delivery as if it were a utility, like phone services. The action reversed the agency’s 2015 decision, during the Obama administration, to better protect Americans as they have migrated to the Internet for most communications
Winn, acknowledging that it is too soon to know what ISPs will do, said it is possible credit unions that are placed into data slow lanes may have to pay to upgrade, or their members may be asked by their ISPs to pay a little more to use the credit union’s tools. He said that only the very large credit unions, such as Navy FCU, may have stronger relationships with ISPs and receive favorable treatment.
“I am concerned this could separate the larger credit unions from the smaller ones,” said Winn, regarding web tool performance.
Winn believes that if a multi-lane Internet develops smaller credit unions may need to band together, as they do with CUSOs and shared branching, to gain the scale necessary to influence ISPs to keep them out of the slow data lanes.
What is more important, he believes, is for credit unions to make their voices heard.
“They need to come together with a united, single voice, saying we represent all these Americans, and we don’t like how net neutrality is impacting us. This does not work with our mission of people helping people. They need to make a public statement,” he said.
Congress To Provide Protection?
Ultimately that may influence Congress to at least provide some degree of protection for the net neutrality concept, said Winn, who does not think Congress will overturn the FCC’s ruling.
Whatever the ISPs do, Winn thinks the changes will come slowly to avoid any major backlash from consumers and businesses. But Winn feels the changes, when they occur, will not be broadcast by ISPs—they will be footnotes on an FCC webpage. He emphasized that credit unions should play close attention to what their ISP is doing and the service they are receiving.
“It’s hard enough for a lot of smaller credit unions to maintain their current technologies, without having to worry about their Internet service,” said Winn. “For example, will some have to worry that if their members are out of town can they still easily access the website? This is just another issue facing credit unions as they try to remain relevant. I hope things work out well for them here.”