Regulating the Internet: Big Impact on Small Businesses

By at 12 November, 2014, 5:44 pm

President Obama called for strict rules to regulate the Internet. The implications will be especially profound for small businesses and entrepreneurs.

President Obama called for strict rules to regulate the Internet. The implications will especially be profound for small businesses and entrepreneurs.

by Karen Kerrigan

On November 10, President Obama called on the Federal Communications Commission (FCC) to advance “strong” regulations to govern the broadband Internet.  In a media statement, I responded: “The President’s immediate, post-election call for radical regulation of the Internet…demonstrates how out-of-touch he is with what our country needs to rebuild confidence and our economy.”

That may sound harsh, but it’s true. The Internet has been a major success story. There’s no harm or market failure to “fix.” Why is the President intruding in an area that actually works for entrepreneurs and our economy?

Broadband has been a lifeline to entrepreneurs, helping them get through the recession and weak economic recovery. Business owners have access to extraordinary tools that help them operate more productively, and find customers more efficiently. Innovative new services keep coming online, spurred by private sector investment. Consumers and small businesses have greatly benefitted.

SBE Council has continually expressed alarm about calls to regulate the Internet, and what this could mean for small businesses — from higher costs, for example, to the likelihood of less investment and innovation. Those concerns have come to pass with AT&T’s announcement on November 12. The company plans to delay fiber investment in 100 cities. That means a slowdown in quality broadband deployment and fewer resources for enhancing capacity and infrastructure. For some small businesses, it could mean a delay in access to quality broadband.

As I noted in my media statement: “Like so many of the Administration’s costly and intrusive regulatory undertakings, entrepreneurs and small businesses will get hurt the most. These regulations will impact investment, which means entrepreneurs and small businesses that need quality broadband, or access to broadband, will suffer.”

Hopefully, the FCC will stay above politics as it considers the approach it will take in response to “Open Internet” proceedings. An independent FCC cannot succumb to political pressure from the White House. Doing so – that is regulating the broadband Internet as a public utility – will do great damage to U.S. innovation and entrepreneurs.

SBE Council Meets with FCC: From October 27-28, a delegation of SBE Council’s small business members had meetings with every FCC Commissioner’s office, including the Chairman’s staff. These were very productive meetings where broadband access and affordability, rural broadband deployment, Internet regulation and other issues were discussed.  Specifically, our group expressed concern about how regulating the broadband Internet as a public utility would negatively impact investment, and therefore access to quality broadband for small businesses and entrepreneurs. Entrepreneurs are on the front line of “unintended consequences” that may result from inappropriate, old-style Title II regulation of the Internet.

Related content:

“Regulating the Broadband Internet: Small Business Impact,” October 31 Technology & Entrepreneurs brief by SBE Council chief economist Raymond Keating can be read here.

Comments filed by SBE Council President & CEO Karen Kerrigan on the “Open Internet” and broadband regulation can be read here.

Kerrigan also filed reply comments on September 15, 2014, which can be read here.

Kerrigan’s Op-ed, The Threat to Competitive Broadband, can be read here.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

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