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Obama’s Net Neutrality Comments Align with Small Business Interests

Obama’s Net Neutrality Comments Align with Small Business Interests

Net neutrality: what is it and how does it affect small businesses? President Obama weighed in strongly supporting net neutrality. Here's what you need to know.

Tuesday, November 25, 2014/Categories: independent-contractors

The Washington Post reports that President Obama made waves when he announced an aggressive stance in favor of net neutrality, arguing that ISPs like Comcast should be prevented from limiting web speeds and access for users and businesses.

In a video statement, the president surprised many people by arguing that to a certain extent, the Internet should be treated as a utility similar to the way water and electricity are. He argued that Internet service providers (ISPs) should be reclassified to fall under Title-II of the Communications Act, which would give the FCC more authority to intervene if it felt ISPs were unfairly restricting access.

Net neutrality is quickly becoming one of those issues where people begin speaking with irrational enthusiasm for or against it. In short, it's become a "partisan" issue. So it's important to take a step back and look at who is really affected by potential changes. In particular, let's focus on small businesses.

Why Net Neutrality Matters for Small Businesses

When you pick up a newspaper, analysis of the net neutrality debate usually points out that ISPs don't want Title-II restrictions because it would limit their ability to charge different rates for faster bandwidth. But journalists rarely discuss the impact on small businesses.

How will changes to net neutrality impact small-business owners?

  • A "neutral" Internet offers a level playing field for businesses. Start-ups and SMBs get the same Internet speed as large businesses. Say you run a business that streams videos. If your business takes off rapidly and you suddenly have high web traffic, your customers can't be restricted from accessing your site.
  • A "non-neutral" Internet means ISPs can restrict your users' access until you pay more for Internet access.

For example, Netflix ran into trouble with streaming speeds. As binge-watching became popular and more people began streaming their favorite TV shows, ISPs decided they wanted to charge Netflix more because its users required more bandwidth.

Critics worry that when ISPs have the ability to charge more for increased web traffic, small businesses and startups will suffer. YouTube, Funny-or-Die, and Netflix would have faced additional hurdles as they increased in popularity.

If net neutrality goes away, the new Internet will favor larger incumbent businesses. As we reported in the post, "Net Neutrality Update: Time to Weigh In on FCC Rules," Tom Wheeler, FCC chairman, expressed concerns back in May when the agency first announced possible net-neutrality rule changes. The FCC's proposal included creating an ombudsman position that would specifically consider the interests of small businesses and startups. By doing so, the FCC acknowledges that there's a potential danger to small business growth.

Do small tech businesses really need any more obstacles? If you offer web hosting services or work for clients that could need larger bandwidth as their business grows, changes to net neutrality could significantly impact your area of information technology. If you can filter out all the nonsense on TV and cable news, net neutrality is likely to be one of the defining IT issues of the coming year.

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