How Will the Repeal of Net Neutrality Affect Small Business?

The issue of net neutrality has permeated the news, talk shows, and discussion boards for a while now. Different sectors have already voiced their concerns about how repealing net neutrality will affe...
How Will the Repeal of Net Neutrality Affect Small Business?
Written by Staff
  • The issue of net neutrality has permeated the news, talk shows, and discussion boards for a while now. Different sectors have already voiced their concerns about how repealing net neutrality will affect consumers and businesses. Meanwhile, many people are still confused about the magnitude of the issue.

    What is Net Neutrality?

    Net Neutrality, or the Open Internet as it’s also called, works around the premise that all internet service providers (ISPs) should treat and deliver web traffic, content, and applications equally. There were concerns that some providers might slow down broadband connections to rivals or boost speed to content providers that are connected to subsidiaries.

    Regulations passed by the Federal Communications Commission (FCC) during Barack Obama’s presidential term sought to protect net neutrality by classifying the Internet as a “Title II” carrier. Under the Communications Act, ISPs had to disclose data caps and hidden fees and were prevented from interfering with the speed of their competitor’s sites and apps.

    However, the current chairman of the FCC, Ajit Pai, indicated earlier this year that he planned to undo the existing regulations against ISPs. Pai has long been against the Title II regulations, as he believes it hinders innovation. He also claimed that even before the 2015 regulations were enforced, ISPs did not engage in the practices that the Act prohibits.

    Pai’s campaign to repeal the Net Neutrality law successfully pushed through on Dec. 14, when the organization voted in favor of the repeal.

    What Happens Now?

    The FCC’s decision to rollback the previous administration’s policies on Net Neutrality could lead to several things. Open Internet advocates believe that the repeal could cause the creation of a high-speed internet lane for big internet, established media companies, and rich households. Meanwhile, the rest of consumers and businesses will be relegated to the slow lane. Mobile plans are also expected to be affected due to its built-in data caps. This could lead to telecom companies charging more for access to streaming services or particular websites.

    Image result for net neutrality

    How Will Repeal of Net Neutrality Affect Small Business?

    A lot of people are under the impression that the FCC’s decision to repeal the Communications Act would negatively affect small businesses. The concern is justified as it appears to give more advantages to established or richer companies. How else does the repeal of open internet affect startups?

    • Service Providers Could Choose the Winners and Losers in the Market

    As previously mentioned, one of the main concerns of the repeal is how it gives ISPs the power to throttle web traffic to its competitors or small businesses and allow big companies or ISPs subsidiaries or partners to get faster speed.

    Site speed plays a key role in how companies are ranked in Google’s search engines. Startups are afraid that if their site is being throttled by certain ISPs, their rankings will go down and they have no way of fighting it.

    Throttling will have a big effect on video marketing companies that rely on speed in order to stream videos with limited buffering and interruptions. Established video companies like Netflix can pay the extra cost, but small businesses might not be able to.

    • Competition Will be Split

    The Obama-era FCC regulation ensured that no broadband company can try to outperform other ISPs. This gives all companies, regardless of the size, the capacity to offer the same speed, with no limitations.

    However, some sectors are saying that reversing Title II will split the competition between ISPs and permit them to offer more free data plans or flexible pricing. This is a development that smaller ISPs might not be able to offer to consumers and could potentially cause these companies to flounder. Still others are saying that this can push smaller providers to become more creative and come up with offers that would attract other audiences, thereby giving them the opportunity to diversify and distinguish themselves from their more established counterparts.

    • Small Businesses Will Experience Financial Challenges

    There’s a risk that smaller companies will be unduly burdened when premiums for faster internet and high speeds are levied on them. Depending on how expensive these fees are, startups might experience financial challenges just to promote their business and gain visibility.

    This could also lead to small companies making cuts in other areas just to ensure an online presence. It could lead to salary cuts or slower job growth until the business finally gains a consistent online presence.

    It’s safe to say that the FCC repeal will not be accepted point blank by consumer groups and the business sector. Lawsuits and appeals have already been filed. However, it’s unclear how the repeal will affect consumers and the economy in the long run.

    [Featured image via YouTube]

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