Mar 24, 2015 - 4:45pm

If You Like Small Businesses You Shouldn't Like Net Neutrality

Senior Editor, Digital Content


Web servers inside a Facebook data center in Prineville, Ore.
Web servers inside a Facebook data center in Prineville, Ore. Photo credit: Meg Roussos/Bloomberg.

Net Neutrality proponents claim that the regulations are “crucial” for small businesses. However, the fact is small businesses will bear much of the brunt, as Will Rinehart at the American Action Forum discovered:

The Federal Communications Commission (FCC) admits at least 90 percent of the businesses that will be burdened by the new utility-style network neutrality regulations will be small businesses.

As required by law, the FCC must estimate the effect the new rules will have on small business. In total, 20,640 companies will be affected, of which 18,532 are considered small businesses by the Small Business Administration.

The new rules will invariably impose new compliance costs on businesses, which will hit small businesses like rural internet service providers (ISPs) and wireless carriers the hardest.

In related news, the Net Neutrality legal wars have begun, which includes a small Texas ISP:

On Monday, USTelecom — a group that includes some of the nation's largest Internet providers — filed suit in Washington, while Alamo Broadband sued the Federal Communications Commission in New Orleans.

The court filings kick-start a legal effort to overturn the FCC's regulations, passed in February, that aim to keep Internet providers from speeding up, slowing down or blocking Web traffic.

"We do not believe the Federal Communications Commission’s move to utility-style regulation invoking Title II authority is legally sustainable," USTelecom President Walter McCormick said in a statement. "Therefore, we are filing a petition to protect our procedural rights in challenging the recently adopted open Internet order.”

In its petition, Alamo alleges that the FCC's net neutrality rules apply onerous requirements on it under Title II of the Communications Act, the same law that the FCC uses to monitor legacy phone service.

"Alamo is thus aggrieved by the order and possesses standing to challenge it," the company's lawyers wrote in the petition, a copy of which was obtained by The Washington Post.

This is what happens when the FCC chose to ignore the light-touch regulatory approach to the Internet that has garnered decades of bipartisan Congressional support and resulted in vast amounts of innovation and economic growth. Expect years of legal fights and much business uncertainty. All because the FCC insisted on fixing a problem that isn’t there.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.