Posted in News | by: Jessica Kraft

This Is What the Net Neutrality Repeal Means for Your Small Business

TL;DR

  • The repeal could spell trouble for small businesses.
  • Without net neutrality, internet companies would be able to decide your website speed based on how much you can pay.
  • This means big businesses could dominate online traffic.
  • This is all speculation until the law goes into effect on April 23.
  • Before that date, here are a few things you can do.

Access to the internet is so fundamental to life that the U.N. declared it a basic human right. It’s probably just as vital to your business, right?

So it’s pretty alarming to hear about the federal vote to get rid of free internet protection. Yep, that really happened.

In December, the Federal Communications Commission (FCC) repealed the Open Internet Rule, better known as “net neutrality.” Removing the requirement that internet service providers (ISPs) must treat all online traffic the same allows ISPs to set pricing and prioritize different types of internet traffic. For businesses, this means online traffic will likely come down to how much they’re able to pay.

Here’s what it means for your small business:

Big businesses will be at an (even bigger) advantage.

Net neutrality creates a level playing field among online businesses. A teenager in Arkansas can upload their latest piano concert to SoundCloud just as easily as a rock star can release their latest song. And the small business next door doesn’t have to worry about paying extra for the same services as a giant corporation.

If ISPs are not obligated to provide equal speed to every website, small businesses could end up losing customers to bigger sites.

Without net neutrality, smaller websites could either take too long to load (remember the dial-up era?) or not load at all. Given that consumers are notoriously impatient when shopping online, they often go to sites that are faster. Websites that can afford to pay for the quickest access will likely win more customers, and those that can’t will likely see their online businesses lose traffic.

That means small businesses’ sales, revenue, and profitability could take a big hit.

Small businesses will be more difficult to discover.

Helen Wade sells clothing and household goods from her shop, The Stockist, in Salt Lake City. Like many businesses, she is always looking to increase her online sales so she doesn’t have to rely solely on customers coming to her brick-and-mortar shop. But if smaller sites get deprioritized, her products may be more difficult to find.

“I think for product search, we’re just going to get buried,” Helen says. “Stuff will get pushed to those bigger sites—the Amazons, the bigger stores that can afford to pay to play. And we can’t.”

We may see fewer small businesses, period.

Althea Erickson, head of advocacy and impact at Etsy, says the repeal could easily put micro-entrepreneurs out of business and discourage others from starting companies.

“If the traffic of our Etsy sellers were slower compared to bigger competitors, then they’d lose sales,” she says. “The bigger trend would be that fewer small businesses would want to take the risk to start and grow over the long term.”

Internet companies will get to pick the winners.

While ISPs like AT&T, Comcast, and Verizon have all publicly claimed that they support the open internet and will not discriminate against certain content, there are many ways in which they can use the repeal of net neutrality to their advantage.

Mike Masnick is president of the Copia Institute and a longtime advocate for net neutrality through his website, Techdirt. He likens the repeal of the Open Internet Order to the early days of smartphone apps.

“If you go back to pre-iPhone days, when you wanted your app to show up on the phone, you had to convince AT&T or Verizon to put your app on the phone, which required a ridiculous amount of negotiation,” he explains.

“Giant gatekeepers, like Verizon and AT&T, which are now controlling internet access, are in a position to pick winners and losers. Since some websites are willing to pay them more money, the gatekeepers will let those sites work faster and better,” he says.

But small businesses won’t go down without a fight.

Small business owners are speaking up against the open internet repeal. Etsy sellers in particular have been very vocal in their disapproval of the FCC’s new rules. According to Althea, 15,000 Etsy sellers sent nearly 50,000 messages to Congress about the issue.

These are the small-batch bakers, artisans, and vintage clothing collectors who would have to go back to their previous modes of in-person sales, operating booths at markets, and renting space in shops to sell their goods.

“Etsy has changed how these people operate and offered them a world of opportunity and freedom to pursue their life dreams because they aren’t beholden to a 9-to-5 job or retail location to make a living,” Althea says. All of that may be on the line when we lose open internet.

On the other hand, some small business owners aren’t worried at all. Stoney deGeyter is the founder of Ohio-based Pole Position Marketing. He argues that the internet landscape under net neutrality was no different than before the regulations were put in place.

“I have yet to see a single issue that net neutrality solved. In short, net neutrality was a solution in search of a problem,” deGeyter explains. “With net neutrality repealed, we can address actual problems as they arise rather than throwing regulations on the internet as a precautionary measure. In the end, small businesses win when there are fewer regulations standing in their way.”

What happens now?

The good news is you don’t have to worry about any immediate changes. When the FCC officially registered the repeal in February, it started a 60-day countdown (ending on April 23) for the repeal to take effect—and for opposition lawsuits to be filed.

Those lawsuits are already pouring in, and it could take months before they’re resolved. Experts believe that ISPs will wait for the outcome of the many legal challenges before making any significant changes to their business models.

And that’s not all. Legislators around the country are taking matters into their own hands:

  • Washington was the first state to pass legislation that makes it illegal for internet companies to slow down sites. Several other states are considering similar legislation or have issued executive orders to protect net neutrality.
  • Twenty-two state attorneys general have partnered together to sue the FCC over the repeal.
  • There is also talk of Congress intervening with a Congressional Review Act, which can overturn an agency’s ruling within 60 days of its effective date (though the president would ultimately need to sign it).

Whether these various efforts to protect net neutrality will succeed remains unclear, but many communications law experts are cautiously optimistic.

“Most Democrats and Republicans believe net neutrality is important,” Mike from the Copia Institute says. “It’s a very small, very powerful group that has engineered this repeal. The public can still take action. If enough people make this a priority, their voice will matter in the debate.”  

So, what can you do?

There are several ways small business owners can join the opposition—and also prepare for a new internet landscape that will likely favor deep-pocketed companies.

  1. Contact Congress to record your opposition to the repeal.
  2. Contact your governor’s office to voice your support for net neutrality.
  3. Support advocacy groups, like Free Press and Demand Progress, that are fighting the repeal.
  4. Consult with other small business owners about their plans to survive a post-repeal internet, and consider joining the local chapter of a national small business association, like the NSBA, to stay up to date on the latest developments.  
  5. Consider joining a lawsuit if you have a compelling story to tell about the positive impact net neutrality has had on your business and the damage it would suffer with the repeal.
  6. Study your website data and digital marketing results now to gain a better understanding of what drives traffic to your business so you can adjust your marketing budget, if necessary, down the road.
  7. Pay attention to what Google does. The company supports net neutrality and may help small businesses promote and protect themselves once the repeal takes effect.

We’re at the beginning of a long journey, one we intend to see through together. Stay tuned for more net neutrality coverage and learnings on how small businesses can continue to thrive in a post-repeal world.

About Jessica Kraft

Jessica Kraft writes about pressing issues in health, education, and technology from San Francisco.