What the Net Neutrality Repeal Means for Small Businesses

With the recently changed FCC laws surrounding internet regulation, businesses should take heed to how this particular modification will directly affect them.  Formerly, the internet was comparable to a utility; similar to water, electricity, or gas. This categorical change lifts a number of restrictions on what internet service providers can do, while reducing certain concessions of its users. This particular repeal officially marked the end of what is known as Net Neutrality, and professional opinions on the subject often vary according to where an individual places their status and identification within the business world.

Net Neutrality - businessman holding device

 

How are small businesses affected?

By regarding the internet as an “informational service”, rather than a utility, the providing companies (such as Verizon, Comcast, Time Warner, etc.) have now acquired the right to speed up or slow down your service according to which websites you most frequently visit. While this may be good news if you are one of these providers, the mass majority of small and even mid-sized business may very well feel the repercussions of this decision in their bottom line. The main reason is that the difference between a poor and quality internet service is likely directly correlated with which users have the advantage of paying for a fast connection.

Note that while these possibilities may not have fully taken effect, the chances of their occurrence will likely increase as larger companies become more accustomed to a less restrictive environment.

1.  Your content may take second stage.

Forbes Technology Council member/contributor, Chalmers Brown, points out how a “pay-to-play” system may result in your innovative new content taking a backseat to that of the larger media companies.  Brown offers the following example: “Imagine a world where YouTube videos were always prioritized in loading speed above Vine’s”. In other words, small start-ups or companies looking to newly expand their web presence may find their voices somewhat drowned out by the larger players.

2.  Customers and clients may experience slower service.

Direct-to-customer product sales are one of the newest trends in the start-up world; and, as noted by Brown, a way for developing companies to maximize transparent business routines, fair materials acquisition, and reduced pricing in a manner that many conventional and long-established retailers are often not entirely able to achieve. However, small business owners must be ready to recognize the possibility of slower-loading web pages and even a reduction in image quality. Unfortunately, these issues can negatively affect a company’s customer base, even driving them back to the traditional retailers.

3.  Your choices in software may be reduced.

In the days of Net Neutrality, using a brand of software that was considered a competitor of your internet service provider was mostly immaterial. However, the new laws now make it possible for service providers to slow down or even block certain software from simultaneous use, should they choose to do so. Brown offers the previous example of how AT&T had considered charging customers for using FaceTime when it first became available. So, while the concept existed prior to the law change, internet service providers now carry a great deal more freedom to slow down, block, or even charge larger amounts for the use of competing software than ever before. Naturally, to avoid glitches in service, users are more inclined to switch over to the software preferred by, and most compatible with, their internet provider.

4.  It may become more difficult to compete with larger corporations.

While the shift away from net neutrality may not be advantageous for small companies and start-ups, large companies and established web services will likely find the opposite to be true. The possibility of younger companies experiencing a reduction in content, decrease in user-friendly websites, or fewer choices in preferred software allows those with greater status to continue to thrive and grow with an anticipatory decrease in competition and disruption by industry up-and-comers.

Net Neutrality - graphic

 

What can small businesses do to combat negative repercussions?

1.  Be active.

While the sans-Net Neutrality forecast may not be exactly optimistic, small-business entrepreneurs should not panic, as they certainly have the freedom to speak out against any issue that could negatively impact their livelihood.  Getting politically involved as well as searching and accessing active campaign sites allows those affected to directly express their opinion to the appropriate lawmakers.

2.  Go to social media.

Utilizing social media is also another way for young business owners to make themselves heard, while also issuing a warning and/or explanation to current and potential clients regarding any disruptions or reductions in service. Your customer base will likely appreciate your honesty, and if you’ve continued to provide excellent customer service in other ways, you may even see an increase in loyalty. In the meantime, aim to increase your number of followers and connect with those you have. As we all know, notoriety can quickly spread via social media, and you might even directly increase your sales numbers.

3.  Review your budget.

While working to combat any possible threats that a lack of net neutrality may pose to your business, it may also be a good time to review your budget and spending. Funneling even a small amount of your revenue into an account dedicated toward technical and web expenses may help keep your brand afloat, should you encounter any of these specific challenges.

Fred Coon, CEO

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