How The Proposed FCC Rules Changes Could Impact Algo Trading
Algo Trading: Recently the FCC’s new Chairman, Tom Wheeler, proposed changes to the way that internet providers provide access. These changes would essentially end Net Neutrality. When those changes were published, they invited the people of the internet to comment on them. They got such an overwhelming response that it crashed their server, and most of the responses were negative to what they were saying about algo trading.
Since then the FCC Chairman has walked back his proposal and removed the mention of the “two-tiered” access system from his proposed rules changes. This is a very good thing because one of the things that makes an Algorithmic Trading system possible is high bandwidth and low latency. We have come to rely heavily on that, and it’s a core part of the equation. Take that away, and the system either becomes dramatically less effective, or fails to function at all.
For this reason alone, every algorithmic trader, and anyone associated with the maintenance of such systems should be absolutely against the idea of ending Net Neutrality. It would essentially give another company, outside of our control, the ability to end our entire business with the flip of a switch. That is unacceptable, and we should rally behind the rest of the internet’s citizens to stand against any attempt to move away from Net Neutrality. Even if you had an inside track and stood to benefit in the short term from such a change, sooner or later, you would be next, and find yourself in the cross hairs. It’s just not worth the risk.
Algo Trading Would Be Affected
Keeping the internet neutral so that everyone has an equal chance at competing is the responsibility of all who use the internet for whatever purpose. A change of the sort that Mr. Wheeler proposed would do untold harm to a number of industries on the web, Algotrading included. We cannot allow that to happen.