SMBs And Net Neutrality

Network neutrality has made a hash of traditional political alliances over the fundamental issue of whether the Internet should be regulated or whether tolls for faster lanes makes sense.

It may even force politicians to think for themselves for a change. After all, no matter how they vote, they’re going to disappoint some very powerful constituencies. At issue is whether language should be added to pending telecom reform bills that would prohibit broadband Internet carriers from prioritizing some Web traffic over others.

The rules changed last summer, when the Supreme Court let stand an FCC ruling that broadband carriers no longer have to comply with provisions of the 1996 Telecommunications Act requiring them to interconnect with competitors.

Network neutrality proponents say this means that cable and DSL carriers no longer have to allow rival providers access to their networks. Therein, they say, lies the problem. “The concept of non-discrimination on the networks was the engine of our economic growth,” said Jim McGann, a spokesman for the It’s Our Net coalition. “If you think about how the Internet would change if the [broadband] carriers get their way, it would make things particularly difficult for small businesses.”

McGann and others argue that small businesses will end up with less than their fair share of Internet traffic if carriers are allowed to give preference to content providers with whom they have a relationship, or if they charge more for different levels of service. Nonetheless, support for network neutrality is far from unanimous within the small business community.

Some umbrella groups representing small and medium sized businesses (SMBs) oppose net neutrality language because they don’t trust government to regulate the industry properly.

Ray Keating, chief economist at the Small Business and Entrepreneurship Council (SBE), based in Washington, D.C., said that small businesses shouldn’t try to legislate their problems away. “The answer is not to get more command and control from the government,” he said.

Keating added that broadband providers will be spanked by the invisible hand of the market if they do discriminate against small businesses. “The carriers have every incentive to please consumers and content providers,” he said.

David Fish, a spokesman for Verizon Communications said the issue should not be a concern to small business. “Our goal is to provide high speed broadband to more and more customers, small businesses included,” he said.

Small telco trade group COMPTEL, on the other hand, is one of several pro-business lobbies that supports net neutrality language. Earl Comstock, president and CEO of COMPTEL said, “It’s easy to say you want a level playing field with no rules and no ref. That works really well if you’re the biggest guy on the block.”

Laurie McCabe, vice president of SMB Insights and Business Solutions at New York-based small business consultancy AMI-Partners, said that if Internet access providers set up different levels of service, it will hurt small businesses. “You’d just be putting another obstacle in the way of their deriving the kind of benefits that the Internet can bring to a company,” she said.

The carriers, who oppose net neutrality provisions, dismiss these concerns as the unfounded ravings of a vocal minority. “It’s a fear about a hypothetical issue and nothing we believe that our customers need to worry about,” said Fish. “This issue has been pushed by a highly motivated minority, particularly a sector of the blogging community and people on the political left.”

In fact, the coalition supporting network neutrality includes large companies like Google as well as large trade groups like the National Retail Federation. He said Verizon needs small business customers and would not do anything to alienate them.

But even disinterested observers believe that carriers will eventually charge different rates for different levels of service. Jean-Luc Valente, senior vice president of marketing and strategic alliances for InfoVista, which provides IT services to carriers, equipment makers and content providers alike, noted “it’s inescapable that there will be differentiated services.”

However, he cautioned the carriers against moving too quickly in that direction. “They have to inform the market and they have to be able to explain why they are going to introduce new fees,” he said.

He also noted that the carriers will have to show that higher fees are worth paying for. “As soon as you start promising better service, you have to prove it,” he said.

Adapted from

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