What Net Neutrality Means for Small Business

The Internet has leveled the playing field between big businesses and small. On the Internet, after all, nobody knows you’re just two men and a dog working out of your garage. Until now, net neutrality has ensured that as long as you could meet your customers’ needs, no one could tell the difference between you and your behemoth competitors.

That could be about to change.

Equal ground

Net neutrality means that all content, users and devices will be treated the same by broadband carriers such as AT&T and Verizon. Streaming video, for example, will be carried at the same speed and cost as a no-frills e-mail. Carriers won’t levy a tariff of heavy users and there’s no price penalty attached to visiting different categories of websites. Devices share and share alike; carriers treat a smart phone no differently than a desktop. Wireless or wired, it’s all the same.

Net neutrality has been the rule of the road on the Internet in the past and remains so to this day. But the Federal Communications Commission (FCC), the traffic cop of all communications, this summer introduced a proposal to reclassify the transmission of data as a telecommunications service that the agency could directly regulate like it did in the days of Ma Bell.

Though the courts originally rebuffed the FCC in this quest, the agency is marshaling its resources for another attempt to codify and enforce its concept of net neutrality

The carriers not unsurprisingly would like to be the masters of their own fate, with the freedom to set their own pricing and policies, especially in the exploding area of wireless broadband, which is expensive to roll out and particularly susceptible to overload by heavy users. One idea popular with carriers is providing expedited delivery to those willing to pony up higher transmission fees.

Essential to survival

Many small business owners consider the net to be an essential utility, much like water and electricity. It’s not just nice to have; it’s essential to survival as a going concern.

“Net neutrality has been a crucial factor in fostering innovation,” Shel Horowitz told BusinessNewsDaily. Horowitz, the author of “Guerilla Marketing Goes Green,” is the owner of a number of small web sites that have limited budgets. Without net neutrality, he says, he might not be in business.

“The ability to get the same quality of Internet connection and the same access across millions of sites has paved the way for innovative small companies to develop whole new ways of thinking,” Horowitz said. “If they were choked off and bypassed in favor of content streams from the corporate giants, or blocked entirely as some are in China, we would probably not see such creative ventures as Craigslist or even Google itself.”

Self-regulation.

While the Small Business & Entrepreneurship Council (SBE Council) serves as an advocacy group for small business owners like Horowitz, it does not believe FCC oversight and regulation of the carriers will best serve the interests of the groups it represents. It believes that an environment of open competition and enlightened self-interest on the part of the broadband carriers will better serve its constituency.

“The bottom line here is critical to keep in mind,” said Raymond J. Keating, the SBE Council chief economist. “A light regulatory touch by the FCC regarding broadband has worked very well.”

As evidence, he cites the annual investment of $27 billion in broadband networks and infrastructure by broadband providers between 2003 and 2009.

The SBE Council said high-speed Internet, both wired and wireless, is critical to the success of entrepreneurs and small business owners. It has been a great equalizer, allowing small firms to compete better with big business both domestically and internationally. The FCC’s attempt to regulate broadband, Keating said, “is a real threat to investment and innovation in broadband.”

“It’s a government regulation issue,” he said. “You don’t want the government stepping in and setting pricing. What you want is a competitive marketplace. The broadband providers will figure out what works and what doesn’t based on customer response.”

Frank Taney chairs the information technology litigation practice group at the law firm Buchanan Ingersoll & Rooney. He said that some measure of imposed net neutrality is inevitable and, on balance, a positive thing.

“Without net neutrality I’d be concerned there’d be a Balkanization of Internet services,” he said. “People would discriminate against certain types of content and devices. The Internet is a tremendous engine of commerce and education. There’s a magic there. The magic is that it’s so democratic. Imposing net neutrality is not going to dissuade carriers from making the necessary investments.”

Taney said that ultimately the FCC will prevail.

“The FCC is all-in for net neutrality,” he said. “The FCC is going to be successful.”

This article was provided by BusinessNewsDaily, a sister site to LiveScience.