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Net Neutrality Update: Time to Weigh In on FCC Rules

Net Neutrality Update: Time to Weigh In on FCC Rules

Changes to net neutrality could unfairly affect small businesses. Here's what tech ventures need to know about the FCC's proposed rule changes.

Thursday, May 22, 2014/Categories: errors-and-omissions

An NPR report details how the FCC's recent efforts to please consumers, businesses, and ISPs may leave no one happy. The FCC has proposed new rules for Internet service providers (ISPs), but the rules aren't final. To be honest, it is difficult to say exactly what the FCC proposal would and would not allow. The FCC insists the new rules preserve net neutrality, while experts say the opposite.

In a contentious news conference last week, FCC Chairman Tom Wheeler emphasized that the proposed rule change, which was voted on 3 to 2, would not create a “fast lane” and “slow lane” for Internet traffic. The news conference, which was interrupted by protestors, saw a visibly frustrated chairman deal with journalists who were suspicious about his claims.

Further, experts say that this is just a matter of semantics, and in reality, the new rules will make it possible for ISPs to segregate traffic, providing faster service to certain customers and businesses. (You can read the FCC's 99-page Notice of Proposed Rulemaking and decide for yourself.)

These rules could change in the next few months, but let’s look at how they could affect small-business owners and what the FCC is doing to protect small businesses and startups.

How Does Net Neutrality Affect Small Businesses and IT Consultants?

One reason net neutrality is such a big issue is that it could affect how quickly small businesses and startups are able to develop. In a non-neutral Internet, ISPs can provide limited speeds or faster service to certain customers. This could greatly affect small businesses, web host companies, and IT professionals.

Say you start a video-streaming business like Vine or YouTube. The site takes off and pretty soon you're up to your ears in web traffic. This is great news for your business. However, if your Internet service provider is able to discriminate against certain web traffic, your business may get the short end of the stick.

In this scenario, current market leaders in video streaming (such as Netflix and Hulu) can afford the high bandwidth that their services require. But in the early days of your business, you aren't able to afford this premium service and your growth is hamstrung.

Some experts worry this could lead to reduced competition and possible Internet monopolies. For instance, Comcast is a co-owner of Hulu and provides cable television, which means it has a vested interest in promoting and protecting Hulu's video-streaming site and its own cable market. Theoretically, a company like Comcast could discriminate against other television and video providers.

How the FCC Intends to Protect Small Businesses

The FCC is aware of this issue and has expressed its concern that rule changes could disproportionately affect small businesses, app developers, and startup tech companies. To assuage these concerns, the FCC has said it will…

  • Create an ombudsperson position to watch out for the interests of small-business owners. Skeptics point to these actions and say, “If the FCC is creating a position to defend small businesses, doesn't that mean that it foresees a greater risk to small-business growth?” This is a fair question, and suggests that the new proposed rules could make it harder for small businesses to compete with larger, well-funded companies.
  • Create a dispute-resolution process, whereby consumers and businesses are able to file complaints against their ISPs if they think their Internet access is being unfairly throttled.
  • Require ISPs to be more transparent about their services. If these new rules come into play, ISPs must disclose their speeds to consumers and provide any information about bandwidth throttling. When Comcast limited Netflix access speed, it was not required to disclose that it had done so. The proposed FCC rules would change that.

What You Can Do about the Net Neutrality Issue

The new net neutrality rule changes have been initially approved, but they aren't in play yet. The FCC is accepting comments from concerned citizens and business owners until July 15. You can visit the FCC Inbox site for more details on making your voice heard, or send them an email at [email protected].

The uncertainty caused by rule changes and constantly evolving cyber risks means that small IT businesses need to protect their companies from lawsuits. Say you'd recommend a client use a certain ISP. If the ISP throttles your client's Internet when the business starts to take off, you could be sued for recommending an ISP that wasn't up to par.

Lawsuits like this – about your professional recommendations and performance – are covered under an Errors and Omissions Insurance policy. With all the uncertainty about the future of net neutrality, make sure to protect your business from these professional liability lawsuits.

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