Why Canada’s small businesses should care about “net neutrality”
On December 14, 2017, the U.S. Federal Communications Commission (FCC) voted to repeal net neutrality. The ruling overturned the net neutrality rules the FCC passed in 2015, which aimed to ensure a free and open Internet.
What did those rules mean? Basically, net neutrality means the Internet is a level playing field. All websites ride on the same highway to get to their viewers’ computers, and no Internet service company (ISP) can give preferential treatment to one website over another. Those rules prevent broadband providers from blocking websites, censoring content, preventing access to services and engaging in “paid prioritization” schemes. (This is when a broadband provider accepts payment to manage its network in a way that benefits particular content, applications, services or devices.)
December’s ruling means that the U.S. will eliminate many of those restrictions. And that means U.S. service providers can favour one customer over another, including slowing down or speeding up service based on, for example, which customer is paying for the privilege of having a faster connection.
While the FCC’s decision applies only to U.S. companies, and while Canada has some of the strongest net neutrality regulations in the world, businesses in Canada do have cause to be concerned. After all, the Internet has no borders. And as the U.S.’s closest neighbour, Canada has a history of quickly following suit; what happens in the U.S. can greatly influence what happens here.
What could it mean to your business if net neutrality was eliminated in Canada?
- It could cost a lot more for Internet service. Broadband service providers can discriminate in terms of who they provide service to. Small businesses could find themselves severely disadvantaged; if they don’t have the money to pay for high speed, premium service, they’ll be forced into the “slow lane” and unable to compete against companies with deeper pockets.
- Worse service for clients and customers of smaller companies. If customers are trying to use your website and the pages are downloading slowly and images are not clear, they’ll likely become frustrated and stop browsing. Worse, they’ll be driven to websites of larger companies that can afford to pay for better service from their providers.
- Loss of choice over the products you use. For example, if you regularly use software that’s owned by a company that competes with your Internet service provider, your ISP could slow down access to it, charge more for you to access it or block it entirely in an attempt to force you to use the software they prefer you use (i.e., one they would profit from).
- Slimmer chances of success for the little guys. For all of the reasons listed about, the loss of net neutrality will make it more difficult for smaller businesses to compete with bigger ones, and even harder for smaller start-ups to get a foot in the door. That’s especially bad for innovation, because new companies with new ideas but not much money will be pushed away in favour of larger, tried and true (but dinosaur-like) businesses.
So far, Prime Minister Trudeau and the CRTC have vowed to maintain net neutrality in our country, but you will feel the impact already if:
- You have a market in the U.S. and now have to compete with other U.S. companies that can afford to deliver their content to customers’ homes at faster speeds.
- You use services from U.S. companies like Netflix or Spotify. Your bill may go up if they begin charging customers more – including those in Canada – to recoup the extra money they have to spend to use the Internet “fast lane” to reach (and keep) customers.
- You’re trying to find specific content, products or services that some companies no longer want you to access. Bell, for example, is proposing to create a not-for-profit corporation that would maintain a list of websites it says are selling pirated materials, and force all ISPs providers in Canada to block access to them. With a number of other companies supporting this plan, this could be a slippery slope.
hbr.org/2017/12/what-small-businesses-stand-to-lose-in-a-net-neutrality-rollback