The internet has changed the face of business forever. It can be argued that the internet is the modern-day equivalent of the printing press. The web created a level playing field where businesses of all sizes could compete in the same game, and all consumers had the same access to this vast sea of information.

 

Net neutrality has been a topic of discussion for quite some time, but it has recently become a hot-button issue. A landmark decision by a U.S. Court of Appeals has put net neutrality in danger. This decision, and the resulting changes in regulations will likely have sweeping effects on consumers and businesses alike, and will have a deep impact on the way we all think about and use the internet.

 

Just What is Net Neutrality?

 

“Net neutrality” refers to FCC rules that were laid out in 2010. These rules were created to keep internet service providers (ISPs) from playing favorites when it came to service delivery. The regulations were an attempt to keep the internet open and accessible to everyone, and prevent unreasonable discrimination against specific websites or specific types of content.

 

This meant that ISPs had to treat everyone the same. Whether users were searching Google, hanging out on Facebook, or binge-watching Breaking Bad on Netflix, all content was delivered in the same way, at the same speed. ISPs could not slow down service whenever a customer visited a streaming site that used a log of bandwidth.  The FCC and supporters of net neutrality believed that internet access was a right, not a privilege.

 

They feared that without regulation, ISPs would slow down service in an attempt to either force customers to pay more for speed, or to encourage content providers to pay ISPs a premium to ensure their content was delivered without interruption.

 

A decision handed down in early 2014 overturned these regulations, and the court sided with ISPs, allowing them to charge premiums for content delivery. According to the decision by the US Court of Appeals in Washington, DC, the FCC overstepped its boundaries when it barred ISPs from slowing down or blocking selected internet traffic. In this new, post-neutral landscape, the FCC will have to allow ISPs to negotiate individual deals with internet sites and content providers.

 

What Does All of this Mean for Consumers and for Businesses?

 

Essentially, ISPs will be able to create “fast lanes” and “slow lanes.” Companies that can shell out the money for premium delivery will be placed in the “fast lane.” Those companies that cannot or will not pay to play will be stuck in the slow lanes. This new tiered-level of internet service delivery is what has many consumers, businesses, and internet content providers up in arms.

 

There is much debate over just what the end result of this decision will be.  But no matter how everything shakes out, the loss of net neutrality means:

 

  • Small business will be at a disadvantage when it comes to competing with large corporations.
  • ISPs have the ability – and now the right – to discriminate against content providers and content formats.
  • Increased prices for consumer access to the internet.

 

Small Business and the Loss of Net Neutrality

 

Ask anyone involved in e-commerce, and they’ll tell you the same thing: Speed is money. A single second delay in page load time can result in a 7% drop in conversion rate, up to 11% fewer page views, and can decrease customer satisfaction by 16%.  The likelihood that small business and startups will be able to afford the payoffs to ISPs is slim. But giants like Amazon and Google will. An uneven playing field could choke of small business innovation and stymie entrepreneurship.

 

Let’s say that a user wishes to download a song from Soundcloud. In the era of net neutrality, that individual just had to hop onto the Soundcloud website, download the song, and they were on their way in a matter of moments. Let’s pretend that Soundcloud doesn’t wish to pay extra money to IPSs in a post-net neutrality environment. Under the new regulations, it might take users an hour to download that song. But they can jump over to Amazon, who (for the sake of this example), was willing to pay ISPs for preferential treatment. On Amazon’s site, that user can download the song in a few seconds – but Amazon may charge twice as much in order to offset the fees they pay to ISPs.

 

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The Loss of Net Neutrality and Content Discrimination

Opponents of the new regulations fear that the end of net neutrality means the beginning of censorship. ISPs have been given complete control over delivery, which means they can slow down content that they disagree with.

 

Although many ISPs have spoken up to say that they would not engage in blatant censorship, the possibility is still very real, and it is now their right to determine which types of content their customers can access. While ISPs may not blatantly censor content, they might simply slow it down in order to frustrate the consumer. This would open the door for ISPs to favor their business partners and slow down the sites and content produced by competitors.

 

Price Increases for Consumers

 

Supporters of the new rules claim consumers will not feel the pinch when it comes to pay-to-play fees for service. But in order for large businesses and content providers to offset the costs of paying ISPs, it’s likely they will pass those costs directly to the consumer.  Many opponents of the new regulations also believe that ISPs will eventually charge users more based on the type of content they access. Heavy Netflix user? You’re going to have to pay a little more. Online gamer? Get ready to pay a premium.

 

The possibility for consumers to get hit with a double-whammy is also very real. ISPs could begin charging sites like Netflix higher fees, which the streaming service might then pass on to consumers in the form of higher monthly subscription fees. At the same time, ISPs could begin operating on tiered systems – if you want to be able to stream a lot of video, you’re going to have to pay extra for the speed to be able to do it.

 

Price Increases for Advertisers

 

Companies that utilize internet advertising could also find themselves caught in a double-billing situation.  Advertisers already foot much of the bill for the general public’s access to the internet, and they are used to paying a premium to get their content in front of potential customers. In a post-net neutrality landscape, however, advertisers could end up paying twice: Once to purchase the ad space, and a second time for the bandwidth to deliver the ad to consumers.

 
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A Whole Lot of What-Ifs

 

As of right now, there is no way to accurately predict how the loss of net neutrality will ultimately affect consumers, businesses, and content creators. What is certain, is that this signals the end of a free and open internet. Whatever the end result, it is likely that advertisers and consumers will feel the biggest pinch, and that small businesses and entrepreneurs will have a much harder time getting their content and services delivered to the general public.