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How the Reversal of Net Neutrality Affects Your Small Business
*Updated January 2, 2018
By now, you’ve heard about the reversal of net neutrality, and you’ve got questions:
- Wait…what is net neutrality?
- Why is everyone freaking out….?
- How does net neutrality affect my local business?
- Hold up…Is the net neutrality reversal BAD for my business??
- I’ve got a small company…does this affect me at all?
What you’ll find below is a basic introduction to net neutrality and how its recent reversal could affect your small business.
If, after reading, you have additional questions about how net neutrality’s reversal can affect your company, please don’t hesitate to reach out and ask. We’re here to help!
First Off, What Is Net Neutrality?
Net neutrality is a principle—and former US law—that means no one owns the internet, and that ISPs (Internet Service Providers) treat all content, websites, and data equally. That means every single consumer can equally access every video, web page, app, etc., regardless of who hosts the content or how much bandwidth it takes up.
In 2015, the FCC—under the request of the Obama administration—voted to classify broadband internet service as a public utility, restricting it from monetary interference by ISPs. Think of it as the same principle that keeps water companies and electrical utility companies from putting a premium on cleaner water or more reliable electricity. The new Open Internet order required a few things from ISPs:
- No blocking: Consumers who subscribe to a retail broadband Internet access service must get what they have paid for—access to all (lawful) destinations on the Internet. ISPs are prohibited from degrading lawful content, applications, services, and devices, on the ground that such degradation would be tantamount to blocking.
- No throttling: ISPs are prevented from throttling bandwidth and speed of certain sites or certain locations.
- No paid prioritization: ISPs are not permitted to accept payment (monetary or otherwise) to manage its network in a way that benefits particular content, applications, services, or devices.
Why Everyone’s Freaking Out About Net Neutrality Getting Overturned
Under net neutrality, ISPs had no say in the websites you visit and what you do with the data on those sites. It also couldn’t throttle your speed or sell faster internet speeds at a premium.
In a world without net neutrality, your ISP controls your internet speed, websites you’re allowed to access, and how much data you’re allowed to download. For example, if your ISP is Comcast, Comcast can say “Your internet can only load this fast, and you can only visit these websites and download this much content, unless you pay us extra for it.”
Similar to how we buy cable subscriptions, this is what a net-neutrality-free world could look like in the future:
In fact, Comcast has been gearing up for this since April 27—when the FCC announced their plans Comcast subsequently changed their net neutrality pledge:
Here’s why people are freaking out about it: it will be really, really easy for corporations to have conflicts of interest and ask consumers for an unreasonable amount of money for access to sites that may threaten their corporation or sites that are incredibly popular. Staff at the Federal Communications Commission (FCC), who overturned net neutrality, have even confirmed that the deals “present significant risks to consumers and competition… because of network operators’ potentially unreasonable discrimination in favor of their own affiliates.” (In fact, the guy at the helm of all this—Ajit Pai—was on Verizon’s general counsel arguing in favor of the big telecom companies in net neutrality cases right before he was chosen as chairman of the FCC. Weird, huh?)
Here’s an example:
Comcast owns NBC Universal. A competitor of NBC Universal is Netflix. Therefore, if your ISP is Comcast, they could theoretically say you could have free access to www.nbc.com, but you need to pay $100 a month to get access to Netflix.
Here’s another one, this time with a small business:
Let’s say a consumer’s ISP is Verizon. The consumer bought the lowest “tier” internet access plan, and wants to buy a new toolbox. Home Depot has paid Verizon a large sum of money to be included in all internet packages as a “free” website. Bob’s Hardware Store couldn’t afford it. When the consumer searches for “new toolbox,” they only get access to HomeDepot.com. Who do you think will get more business, Home Depot or Bob’s Hardware Store?
Is Overturning Net Neutrality Bad for Small Businesses? Does It HURT My Business?
In August 2017, the American Sustainable Business Council—along with many small business groups—wrote and published an open letter to the FCC stating the reversal of net neutrality would be disastrous for small American businesses. Below is the gist of it:
“We are a group of businesses empowered by unencumbered access to an open Internet. We are deeply concerned with the Federal Communications Commission’s proposal to roll back its existing strong net neutrality rules based on Title II of the Communications Act.
… Today, broadband is vital to American enterprise; connectivity is absolutely essential to businesses. We also depend on a strong competitive framework and legal foundation to ensure that Internet service providers (ISPs) cannot discriminate against websites, services, and apps, or impose new fees that harm small businesses.
… While only a small handful of companies sell Internet access, nearly every company in the country buys it – including ours. Weakening or rolling back the 2015 protections would be disastrous for the country’s business community. Internet providers would gain new powers to steer businesses and customers one way or another. For example, our customers’ Internet access providers could charge us new fees for the right to get to our customers, or for prioritized access to our customers. While big companies 1 of 17 might be able to afford a pay-to-play prioritized ‘fast lane’ to users, small and medium sized enterprises like ours cannot; at the very least, such new fees would put us at a distinct disadvantage with larger competitors.
Internet access providers could also charge our customers new fees for access to our websites and services. And they could favor our competitors by slowing down our traffic or exempting our competitors’ traffic from users’ data caps, or they could block websites and apps outright. This would create immense uncertainty for companies in every sector of the economy who rely on open, unencumbered connectivity as a key enabler for their business and productivity.”
Well said, American Sustainable Business Council. Below, I’m going to dive into the most important ways your small business is affected:
Overturning Net Neutrality Might Hurt Your Website Traffic
How do people find your local business? Online, either through mobile or desktop search.
Currently, local businesses use local SEO in order to rank well in search results. A key component of this is your Google My Business profile. With the net neutrality reversal, local SEO might become completely moot since ISPs will have the ultimate say in which websites are found.
Another way this could affect your web traffic is from limited or difficult website access. Your website speed already affects your bottom line. In fact, 47 percent of online users expect your webpage to load in two seconds or less, and 40 percent will abandon a page that takes more than 3 seconds.
If your business can’t afford to pay the ISPs to put your website into the “fast lane,” consumers will naturally abandon your slow-loading site for one that has higher speeds—the ones favored by the ISPs. That’s a serious disadvantage for you.
Oh, and don’t forget that by giving control over to communications companies you’re also giving control to mobile internet providers. That means your mobile search will give you same premium results as you’ll get on desktop. Sorry, local Mexican restaurants, looks like everyone’s going to Chipotle since that’s all that showed up on Google Maps when you search for “burritos near me.”
Without Net Neutrality, ISPs Can Pick Local Market Winners and Losers
A free and open internet has allowed countless of small businesses to thrive. In today’s digital world, most local businesses find their footing and gain success through their online presence and through digital marketing.
The rule of thumb is that if your business produces quality, locally-relevant, optimized content to your target audience, you have the same access to them as every other company in the world. Without net neutrality, ISPs have total control over a company’s online destiny. Who are the winners? The ones with deep pockets. Who are the losers? Your company.
ISPs Will Basically Have No Checks and Balances
Lobbyists and lawyers in favor of the net neutrality repeal state it will increase competition in the ISP marketplace, essentially bringing in more innovation and better prices.
Problem: Only a small handful of communications companies dominate the marketplace, and local communications companies don’t have the same coverage.
What this means is no matter how many consumers complain, if they have no other choice their voice is meaningless. Without having net neutrality or a truly competitive marketplace, ISPs are set up as monopolies and consumers are put at the mercy of the fat suits in the C-Suite.
No More Level Playing Field Between Your Business and the Big-Box Competition
The way the internet is now, you have the same access to consumers as your big-box competitors. When someone goes to the internet looking for your services, you pop up right next to Fortune 500 companies. Without net neutrality, that might not be the case. If ISPs are allowed to sell “premium services” there’s nothing stopping industry giants from shelling out gobs of money to be included in every single package. This eliminates the level playing field for smaller companies that may not be able to shell out cash in order to be placed in the fast lane.
What Happens Now? What Do I Do to Protect My Business?
We’ve already seen internet price hikes from most cable and internet providers. Comcast, Cox, DirectTV, Dish, and Frontier have all either already raised their prices or are set to do so in 2018. Frontier is the first to specifically call out higher prices for faster and more reliable internet speed, citing an “internet infrastructure charge.”
Unfortunately, right now it’s a waiting game until all the lawsuits pan out and cable companies actually start offering perks for businesses. Until then, keep treating your website as if nothing has changed, but pay attention to your traffic in 2018. If you see a large drop, call a digital marketing company (like Blue Corona) to look into the causes for you. We are going to stay on top of this story in 2018, and will update it based on forthcoming news and information.
About The Author: Blue Corona's Editorial Staff is determined to help you increase your leads and sales, optimize your marketing costs, and differentiate your brand by passing on our tribal knowledge. The team vigilantly stays on top of the latest in digital marketing, bringing you the top insights with expert commentary. Want to see something on our blog you haven't seen yet? Shoot us an email and our marketing team will get to work.
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