Net Neutrality’s Impact on Business and the Unexamined Consequences of its Removal

Dec 4, 2017 -- Posted by : admin

The very root of the word “neutrality” implies a benign, vanilla meaning, which can easily lead one to believe that the concept of net neutrality is simply that – a boring, unimportant subject. However, that initial impression could not be any further from the truth, as the lack of net neutrality, and the enforcement of such policy by the US government is critical to some of the most defining factors of a capitalistic and free market.

First, what is US net neutrality?

A simple google search will reveal a vast array of explanations but simply put, it means that access to the data (content) on the internet, much like the free market, is left open for all of those that want to participate on a fair and equal playing ground. Net neutrality prevents ISPs (internet service providers) from being able to manipulate the data you see; When you support net neutrality, it means your ISP cannot block content or slow down the content of a competitor or someone that does not financially benefit their company. If we are to reverse the protections afforded by net neutrality legislation that ensure a free and open internet, we would open the door for ISP (internet service providers) to be able to manipulate the pipeline of information you receive based on their profits. This means small businesses would be squashed by big companies with deep pockets. It means ISP providers can ultimately create monopolies for nearly any product category by simply blocking merchants or businesses that do not line their pockets or that line the pockets of competitors.

So, what impact does net neutrality have on business?

It is no secret that e-commerce and the internet have been the modern breeding grounds for millions of new businesses. It is the contemporary version of the Industrial Revolution – the internet has changed the way businesses are created. Some of the most amazing (and profitable) companies have been started using the internet. It has become a new gateway to realize entrepreneurs’ dreams and it has offered an entirely new marketplace for capitalism to grow. Thanks to a free and open internet, American dreams and ingenuity have been realized from people’s garages and basements with hope, vision, little capital and most importantly, access to a free online market.

The impact on small or up-and-coming businesses is obvious. If the “big boys” with the deep pockets become the only businesses that attain visibility from the market, a self-perpetuated cycle of success continues with no entry point for the innovation, businesses, products and solutions of small business owners. The impact on the American people is equally obvious – choices are taken away, new product and service visibility is limited, and we have a far more drab online experience. (Imagine going online to search for something and seeing just two results – Amazon or Walmart.)

The long-term implications of eliminating US net neutrality for ISPs are far less discussed, and even harder to realize. In the long term, this approach would hurt the ISPs profitability and limit their growth opportunities as well.

Take Google paid search (Google Pay Per Click) advertising as just one example. One of the most interesting aspects of Google search is its “pay to play” nature and competition in the bidding process amongst numerous vendors that continually increases bids. If there are only one or two competitors that can afford the premiums placed on the advertising opportunities, speeds, etc. in time they will decrease, thus leading to a reduced profitability for the ISP. One could argue that the ISP does not care who is paying for it as long as they make their profit, but this vision is incredibly short sighted. In time, the lack of new businesses, new innovations, new companies, and new services also means the ISPs themselves will ultimately squash new product categories, competition that increases advertising fees, and potential advertisers, before they even begin. The lost revenue may be hard to measure initially, but in time we run the risk of creating online monopolies that will eliminate the endless new advertising and market opportunities they enjoy today with a wide and free market.

We have a Department of Justice that has repeatedly stepped in to prevent mergers of major monopolies as we have long recognized the threat they hold to our democracy. In fact, right now the DOJ is currently attempting to block the merger of AT&T and Time Warner as it "would result in fewer innovative offerings and higher bills for American families… and “(AT&T) may use its control of Time Warner's popular programming as a weapon to harm competition."* I truly struggle to understand how this is any different than the removal of net neutrality laws.

At times, we accuse the internet of being “the wild wild west” of the business world, but let us not forget – it was the freedoms and possibilities of that very wild west that created the opportunities and a breeding ground for the growth of our current capitalistic system. There is something to be said for wide open fields of opportunity, and the beauty of the endless possibilities that come with them.

There is nothing “neutral” about threatening consumer choice and our newest frontier for American greatness.