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Shifting Net Neutrality Laws and the Digital Start-Up


The Federal Communications Commission (FCC) is considering rolling back regulation related to net neutrality in the U.S. A shift in legislation surrounding net neutrality could have a significant impact on all entrepreneurs who have web driven or e-commerce components to their business models. For small businesses or start-ups, reduced regulation could put the entire economic eco system on shaky ground.

What is Net Neutrality?

Net neutrality infers that absolutely everything on the internet should be made equally accessible by internet service providers (ISPs). In terms of business, this provides small business owners and large enterprise organization the same opportunities when it comes to the internet, allowing for small businesses to operate competitively online.

Today’s Net Neutrality Laws

In the U.S., President Obama believed all businesses, regardless of size or money, should have the same reach and opportunities via the internet. The former president pushed the Common Carrier law onto ISPs, essentially making it illegal for these providers to discriminate services based on customer or the nature of the goods and holding the internet as a level playing field for businesses across the board.

What Changes May be Ahead

Before he was even inaugurated, President Trump was discussing regulation changes surrounding ISPs with the FCC. One of the proposed changes, would be to allow ISPs like to be able to limit the data and speeds available to particular online content – and bill businesses for the luxury of having their websites operate high speeds, thereby putting user and consumer experience into a bidding war.

How Could These Changes Impact Small Business?

If ISPs have the ability to limit the speeds of our internet based on the websites or apps that we use, they will be able to charge sites for data prioritization. This prioritization would allow a website's users to have high internet speeds while browsing that site. Naturally, as a small business owner and / or start-up in today’s highly competitive digital landscape, your website is crucial for driving awareness and growth. But if you are unable to keep up with the costs of what could soon be hefty fees implemented by internet service providers in order to allow your users to browse your site at a high speed, it won’t be long before you lose your user base and soon have to consider closing your doors. On the other hand, multi-million (or billion) dollar enterprises would have the unlimited funds necessary to maintain a positive user experience and keep their website speeds consistent.

How Could These Changes Impact Consumers and the Economy as a Whole?

Thousands of small businesses, especially those driven by a strong online presence and ecommerce platforms, could simply find themselves priced out of the digital market and forced to shut down operations. In this instance, consumers would find themselves left fewer choices in their service or goods providers and the American economy could soon find itself on very shaky ground considering the millions of small businesses registered in the United States alone.

With that being said, many ISPs would argue that the proposed changes will provide more options to consumers as the telecom industry battles the cost of services out through bidding wars and competitive pricing. Could a saturated ISPs market actually end up empowering small business in the end? That certainly remains to be seen.

The Impact to Canadian Businesses

Some Canadian businesses operating ecommerce or web driven operations south of the border may be impacted at some level by these proposed changes. The bigger question at hand is whether or not this is a trend we can expect to see rolling across the globe and whether or not Canada will follow suit? As the Canadian Radio-television and Telecommunications Commission continues to evaluate our own net neutrality regulations, change could indeed be afoot in our own backyards.

For more information about changes to net neutrality laws and how they could impact your business, contact John Muffolini, CPA, CA, National Leader Technology, Media & Telecommunications at 647.943.4052 or [email protected].