‘Location, location, location” used to be the first principle for small businesses and entrepreneurs, but the new battle cry is “connection, connection, connection.” Virtually every aspect of a modern small business — from finding customers to paying bills to managing suppliers — has moved online. And with the rise of the Cloud, the growing importance of cyber presence over physical location looms even larger every day.
That is why the FCC’s recent vote to roll back 1930s era “public utility” rules for the internet is so vital. Unshackling the internet to promote new investment, network deployment, and broadband innovation will supercharge small business and open new avenues for entrepreneurs, boosting the most vital sector of our economy that produces 3 out 5 new jobs.
FCC Chairman Ajit Pai — a Washington outsider from rural Kansas — should be commended for leading the way for small business. Too much of the Washington debate is a phony argument between giant companies ... and even bigger ones. And it is critical to have leaders who are willing to speak for small business and entrepreneurs.
Many decried the utility rules, for example, as a giveaway to the big tech monopolies and other dominant globe-spanning megacompanies, who are well positioned to exploit complex regulations and find loopholes to stifle competition. With armies of lawyers and lobbyists, they can always game the system.
Small business, by contrast, is hurt the most by arcane and convoluted regulatory schemes that impose heavy costs to understand and slow down the nimble innovation at the heart of entrepreneurial success. Rules designed to rein in the early national telephone monopoly — a project that started in the 1930s and continued for the next 50 years — are a very poor fit indeed for the local businesses and startups of today.
These utility rules have driven down investment in network deployment and upgrades small businesses need, forcing a more than $2 billion drop in just the past two years with tens of billions in additional slowdown predicted to follow had the FCC failed to act. And while the debate often focuses on the harm to broadband networks, over 100 small and midsized manufacturers have warned, “the harm would cascade out far beyond the provision of broadband service because the Internet is now so entwined with our entire economy.”
From the perspective of small businesses, the proposal — recently approved by the FCC to repeal these utility rules — is a clear win because it will remove the regulatory obstacles holding back the investment needed to meet entrepreneurs’ growing demand for better, faster networks.
Nor are the new rules a threat to net neutrality — the widely accepted idea that the internet must be free and open, that all data and traffic must be treated equally, and that internet companies shouldn’t be able to censor or unfairly restrict what we do online. While the FCC’s order changes how these principles will be enforced, it is clear the internet will remain free and open and not become the dystopian Wild West some advocates have claimed.
All of the major internet providers have publicly committed to continue keeping the internet open, promising not to block, throttle, or unfairly discriminate against lawful content online. Pai’s plan further obligates providers to formally and transparently disclose these commitments and then restores the authority of the Federal Trade Commission — the nation’s premier consumer protection agency — to enforce those promises and police any anticompetitive abuses. And as a final layer of defense, state attorneys general across the country will have broad authority to protect their citizens online.
A free and open internet is vital for small businesses, and is not threatened by the FCC plan to modernize broadband regulation. Indeed, at its core, the FCC action simply restores the same pro-investment, pro-innovation policies that governed the internet in its early years, when revolutionary services like eBay, Facebook, and Google first got off the ground. Critics who would hide the ball and refuse to debate the real downsides of overregulation and government micro-management should not be trusted or taken seriously.
The FCC’s bold decision promises to unleash new investment and strengthen the internet for consumers and small businesses — creating jobs and powering a new generation of entrepreneurs and innovators.
Harry C. Alford is president and CEO of the National Black Chamber of Commerce.