Net Neutrality has set the internet on fire in the past month. Many argue that the repeal of net neutrality rules will allow ISPs to raise prices, slow traffic, hurt specific companies, and even control information. Many others expect ISPs to be able to invest more in infrastructure and services, leading to a newer, faster, more powerful internet than ever before. Depending on who you ask we’ve either ushered in a new age of information or been condemned to a dystopian age of control and deception. You can learn more about the facts of the repeal here.
Whether you believe we’ve entered a new utopia or opened ourselves to the dawn of the end of the world, the lack of net neutrality will certainly affect businesses. It will affect industries. It will affect employees and owners alike. Large and small, foreign and domestic, the internet changing means business will change as well. So let’s focus on small business, a bastion of the American dream.
The story comes from an article written by Harvard Business Review. The story is about a disruption startup called FarmLogs. FarmLogs allows farmers to gather data and create business intelligence insights about their own crops. The service tracks planting dates, weather conditions, soil nutrients, crop yields and more to track and predict profits, expenses, and operations. FarmLogs is a great example of how traditional, manual and analog business can be transformed through the power of the internet.
The insight gathered from FarmLogs allows small farms to compete with larger farms, as both have access to the same information. He who thrives will be he who utilized the information to the best of their ability. It’s a competitive playing field in that way. It’s one example of a number of startups that have been allowed to thrive in the open internet age. As the Harvard Business Review explains:
The success of this company is as much about agricultural process as about how the internet age has made entrepreneurship more accessible to all. Right now, anyone with an interest in launching a new venture has access to unprecedented online resources, relationships, and services. Good ideas and products can emerge from anywhere and almost instantly achieve national and even global reach. Crowdfunding platforms and social media have changed the way many small businesses get started raising capital. This stands in stark contrast to the state of entrepreneurship two decades ago, when starting a technology business often meant prohibitively heavy upfront investments, physical equipment, and limited access to broadband networks. It’s hard to imagine a time when it was easier for anyone to start a business.
This trend — call it the “democratization of entrepreneurship”— depends on an open internet. Since its inception, the growth of the internet has been guided by a foundational principle: your broadband provider should not get to pick winners and losers in terms of how quickly or easily you can access things online. Instead, you should control what you see and what you do, and everyone should have an equal opportunity to get their content or service to their intended audience, without interference. This principle has led to a virtuous cycle of innovation that has driven our economy in previously unimaginable directions. For the first time, small business could think big and consumers could shop small, from anywhere in the world.
When the FCC first introduced the concept of net neutrality in 2005, it did so in order to preserve the potential for these startups. When the FCC classified the internet under Title II in 2015, it did so to ensure, among other things, that these startups would always have the potential to thrive. That is no longer ensured now that the repeal has passed.
While hypothetical, it is entirely possible now for an ISP to sink a company like FarmLogs. According to HBR, “For the first time, broadband providers will have the technical capability, the business incentive, and legal authority to discriminate in the provision of internet access.” Small businesses will have to pay for the use of the internet. If an ISP wished, it could push these prices to such an exorbitant amount that a fledgling company would be unable to turn a profit, and would fail as a result. Not because of bad service or a bad product, but because they couldn’t afford to pay the bills.
The big problem here is that many ISPs are owned by or own a number of businesses that could be disrupted. In addition, much of the country only has one ISP available to them in their area. So, if your startup is disrupting a business owned by the only ISP in your area, the ISP could charge you ridiculous prices, kill you, and continue turning a profit through its subsidiary or parent company. That’s a scary prospect, and many disruptors have taken notice:
That is why more than 200 businesses and trade organizations have signed a letter to the FCC asking the agency to reconsider its plan to end net neutrality. Signatories include companies like Airbnb, Etsy, Foursquare, GitHub, Pinterest, Reddit, Shutterstock, Square, Tumblr, Twitter, and Vimeo, to name a few. And FarmLogs has also registered its concerns about eliminating net neutrality with the FCC, noting that the FCC’s plan would stifle its ability to compete with bigger companies.
That isn’t to say that any of this will be happening. It could be thrown away as conspiracy, conjecture, and plain paranoia if you’re a proponent of the net neutrality repeal. Perhaps it should be thrown away as such. However, the fact remains that legally, this now can be done. The threat looms over the heads of small businesses that utilize the internet to disrupt the market everywhere. So it’s something worth paying attention to, especially if you run or work for a small business like FarmLogs.