How Net Neutrality Affects Small Business

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If you’ve been paying attention to recent news, you’ve likely heard of “net neutrality.” As a small business owner, it’s important you have an understanding of net neutrality and how the recent U.S. Court of Appeals’ decision may affect your business; ensuring you are prepared when changes to the way Internet content is delivered takes place.

What is Net Neutrality?
What is net neutrality? According to an article in Business Insider, net neutrality prevents Internet providers from dictating the kinds of content users would be able to access online. Instead, Internet providers are required to treat all traffic sources equally. Why is this topic so controversial that the U.S. Court of Appeals had to weigh-in?  Because Internet Service Providers (ISPs) like Verizon, AT&T, and Comcast want to charge for use of their networks.  Meaning, these providers will have the ability to pick and choose what consumers see online and to then charge content providers.

Changes to Net Neutrality
The U.S. Court of Appeals ruled last week, January 14th, that the FCC doesn’t have the right to enforce net neutrality. The appeals court stated that although the government is responsible for overseeing crucial utilities like telephone service and electricity – considered common carriers – the Internet isn’t one of those utilities under current law.

The implication of this ruling means, eventually, Internet Service Providers would become the “gatekeepers of the web” and would determine the content shared to users based on the ISP’s own interests.

How Net Neutrality Changes Could Impact Your Business

The following are three examples of how these changes could affect your small business.

1. Higher Costs
Without net neutrality, Internet Service Providers are able to create their own payment options for individuals and businesses. Although nothing is official, these Internet companies could charge higher fees for higher speeds. For example, with Netflix being the leading streaming video provider on the Internet, they may have to pay more to ISPs in order to provide customers with fast content.  According to USA Today, “Netflix may face an incremental $75 million to $100 million in annual content delivery costs.” This additional expense will be incurred to provide the same service levels consumers already expect from Netflix.  For companies that can’t afford the more expensive fees, possibly small businesses like yours, they would be subject to a slower website than larger competitors – effectively squeezing smaller companies out of the marketplace.

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2. No Longer an Even Playing Field
Net neutrality ensures small businesses are able to compete with larger companies. With both having the same access to the Internet, they are able to have the same opportunities for their businesses. If net neutrality is eliminated, small businesses may not be able to afford to share content and therefore, unable to compete with their larger competitors.

3. Changes to Video Marketing
At Wasp, we have dedicated a lot of time and effort to creating videos that feature and promote our productivity solutions, such as Wasp Inventory Management and Asset Tracking. Small businesses that rely on video and YouTube as part of their marketing strategy, could see changes if net neutrality is eliminated. If we can’t afford to pay Internet providers to share our content, our potential customers may not be able to view as many product videos and may not be enticed to purchase our products. Furthermore, the investment to produce and optimize these videos will be result in a monetary loss.


Related Article: STATE OF small BUSINESS REPORT

As a small business owner, it’s important to understand net neutrality.  The decisions being made could possibly have an impact on your small business and how you are able to access the Internet in the future. For more small business news, resources and industry insights, please visit the Wasp blog and explore existing blog posts.

What are your thoughts on net neutrality and the appeals court’s recent verdict?  Tell us in the comments.

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Brian Sutter

Brian Sutter

Director of Marketing at Wasp Barcode
Brian Sutter is the Director of Marketing at Wasp, responsible for the development and execution of the company’s marketing strategy. His role encompasses brand management, direct and channel marketing, public relations, advertising, and social media. He also writes and speaks on topics related to helping small business owners grow their business and improve operational efficiency.
Brian Sutter
Brian Sutter