What Is Net Neutrality & How Does It Affect Business?

ethernet cables plugged in net neutrality

Imagine if internet service providers were suddenly given the ability to block certain online products or restrict access to company websites if hefty fees aren’t paid. Now, think about what it would it mean to a small business if a bigger competitor was able to price them out of the market to the point of financial ruin. It sounds like a rigged system, right?

Well, it’s fair to say that changing the current FCC net neutrality laws in order to allow corporate bidding on data and speed prioritisation would be disastrous for every company other than the biggest players out there.

While the issue of net neutrality was brought into the limelight around 2014, it still remains a hot topic because of the potential consequences that could befall small businesses.

After Donald Trump’s recent appointment of Ajit Pai as the Federal Communications Commission (FCC) chairman the whole issue of net neutrality has reared its ugly head again.

We’ve highlighted some key points to help you gain a better understanding of what is net neutrality and how any changes could affect businesses. So, read on to learn more or find out what net neutrality means for the future of IT. Alternatively, head over to our Tech blog and take a look at our other tech-related articles.

Understanding FCC net neutrality laws as they currently stand

In 2015, the Open Internet Order (OIO) was established by the FCC. After passing the OIO, internet service providers (ISPs) essentially became classified as a public utility the same as water, electricity, and sewage companies.

While there are many rules that ISPs don’t have to adhere to that other utilities must do, the OIO does make some things very clear – ISPs must not block or throttle bandwidth and cannot offer paid data prioritization.

So, 2017’s new proposal essentially seeks to strip ISPs of the restrictions they currently have to live with and hand control back to the Federal Trade Commission (FTC).

How will the changes impact small businesses?

It should come as no surprise that the proposed changes are striking fear into the hearts of small businesses everywhere. Thankfully, there are plenty opponents in the general public as well as politicians and big business such as Facebook, Amazon, Twitter, and Microsoft.

So, how will the proposed changes to the FCC net neutrality rules affect businesses?

  • Increased costs and revenue loss

It’s clear that small businesses would be badly affected if they had to pay high fees in order to ensure their website would have decent speeds for their users. But, failing to have speeds that are acceptable for customers could actually drive traffic away from company websites. For small businesses and startups this is a lose-lose situation but bigger companies would thrive due to the reduction in competition.

Additionally, it’s important to note that Google takes slow website speeds seriously when it comes to page rankings. Having your business’ website pushed into the ‘slow lane’ because you can’t afford the data fees would severely impact your ranking and opportunity to convert website visitors into paying customers.

  • Sacrificing employees in order to pay increased fees

The seriousness of the new net neutrality proposals really becomes clear when you take into account how important the internet is for businesses everywhere. Faced with the option of having to find the money in order to pay the data fees or simply going out of business, most companies will probably try to find the money.

When companies are faced with having to pay costs, they normally look at their workforce when all else has failed. The data fees from ISPs would undoubtedly be high and businesses would have to reduce salaries, make staff cuts, and hold back on hiring new employees. While this might be a necessary move it would also hinder growth, and this could mean the end of many companies.

  • Marketing efforts could become useless

Critics worry that competition between small and large companies will be hugely affected; with smaller ones being pushed out as their content isn’t ‘paid-for prioritised’.

Creating a financial barrier for startups and small businesses to deal with would kill off a huge amount of companies or severely damage them. After all, it’s hard enough to get your content noticed in the internet’s current neutral state as it is.

Companies need to be creative in today’s world but websites that incorporate video streaming, embedded videos, or high quality imagery into their marketing strategy could find themselves facing huge fees.

Are you still wondering what is net neutrality or are you concerned about the potential changes to net neutrality that could be on the horizon? To speak to a friendly member of our team, please contact us now. Or, head over to the IT Managed Services page to learn how Saxons can take care of all your IT requirements.