How Could the Loss of Net Neutrality Impact Small Business IT Departments?

By: on January 25, 2018

Last month the FCC voted to repeal net neutrality rules. The vote was one of the most contentious in recent memory, sparking intense debate both on- and off-line, and across party lines—all this despite the fact that a majority of voters in both parties disapproved of the move.

As the manager of a business IT department, you’re left wondering: How does the loss of net neutrality impact your company’s IT options and decisions? It’s definitely too early to say, but it’s not too early to consider the possibilities.

Here, we’ll do just that, considering the impact the repeal of net neutrality regulations could have on SMB IT departments and IT decisions.

Basic Internet Connectivity

SMBs get their internet service like everyone else—through one of the major national internet service providers (ISPs). While there are small, local ISPs peppered around parts of the country, market consolidation means they’re a dying breed.

Most small business owners choose among one or two national providers, like Spectrum or Comcast, for their business service, just as they do for their home internet service.

business internet service tiers

Online advertisement showing two basic tiers of business internet service

ISPs tout a variety of extra features included with their business plans; things like “direct connections,” support for “business applications,” IT security tools like anti-virus applications and software firewalls and a dedicated customer service line for business accounts.

Apart from faster customer service, the additional features are rarely needed. (See the next section for discussion of the dubiously named “business applications.”)

What will stay the same?
What might change?
SMBs will continue comparing bandwidth cost and network reliability when choosing ISP plans. Network reliability guarantees should be in the ISP’s service level agreement (SLA). SMBs in areas with poor infrastructure will continue to prioritize customer service, spending extra on ISP plans that offer faster support for business customers. ISPs could add many more levels to their tiered pricing strategy with prioritized services or promises of faster connections to certain websites. Choosing among an increasingly convoluted selection of packages and services would be frustrating for SMBs.

VoIP, Video Conferencing and Other Real-time Services

These days nearly all small business phone systems use VoIP to route voice calls over the internet, as opposed to the old-school PSTN (public switched telephone network). VoIP phone services have been a huge boon to small businesses, offering far lower costs and saving time with simpler billing.

Critics and cynics see the repeal of net neutrality as a move by ISPs to increase costs, partly, it’s suspected, by re-complicating how services are billed. Imagine if VoIP calls were billed the way calls were billed back in the landline days, with different rates for evening, weekend and in- and out-of-network calls.

While that would be an extreme example, that’s the door that’s been opened with net neutrality’s repeal.

isp billing schemes

One vision of how ISPs might use increasingly complicated billing schemes to grow profits

What will stay the same?
What might change?
SMBs will continue to rely on IP-based voice and video conferencing tools. Computer-telephony integration (CTI) is at the heart of the workflows used by so many SMBs—especially by their service and sales departments; ISPs would find it impossible to get businesses to abandon it. ISPs may re-complicate voice or video conference billing, perhaps by offering different prices for in- and out-of-network calls and conferences. More likely, they’d try to get subscribers to switch to a preferred service provider through some combination of incentives (cost savings) and disincentives (poor quality for non-preferred services).

SaaS and Other Cloud Services

Voice calls are just one drop in the bucket of IP services upon which small businesses rely. With cloud-deployed software, aka Software-as-a-Service (SaaS), a majority of businesses rely on their ISPs to connect them to their operational and mission critical software platforms. Over recent years the shift has been dramatic:

Deployment Preference

isp deployment preference

The alternative to SaaS and cloud-deployed software is software that’s installed locally, on individual workstations or on company-owned, on-premise servers. For detailed discussions of how these two competing deployment options play out in general and with different software, see:

What will stay the same?
What might change?
SMBs have wholeheartedly adopted cloud software solutions and it’s not likely many will turn back. SMBs should continue to weigh their options before committing to any one vendor and also take the vendor’s long-term viability as a company into consideration. As with voice and video, ISPs may choose to give preferential treatment to the traffic to and from partner vendors. This would greatly complicate the considerations used to make software purchase decisions—and might result in some SMBs considering on-premise solutions.

SMBs as Providers of Online Services

All of the above scenarios look at SMBs in the consumer role—consuming IP data, voice and video communication tools and cloud software services. But many SMBs are in the business of providing and selling these and similar services themselves. Those SMBs could face a different variety of post-net neutrality complications.

With the repeal of net neutrality rules, ISPs have essentially been given a green light to pursue more “pay to play” arrangements. Under these arrangements, ISPs agree not to slow down traffic to and from partner websites and services, provided the partner is a paying partner.

This could be done instead of (or even in addition to) charging end-users more to access various online services.

What will stay the same?
What might change?
SMBs whose main product is an online service, or whose services require an internet connection, can’t do much to change that now. Their businesses will still require ISP connectivity at both ends: the business’s and the customer’s. Companies whose products and services rely on high-speed or real-time communications may need to enter into “pay to play” arrangements with ISPs. SMBs may start looking into caching content and using third-party content delivery networks to reduce their (more expensive) high-speed connection reliance.

Conclusion

With the blood, sweat and tears all still drying on the FCC’s move to repeal net neutrality protections, it’s clearly too early for businesses to react. Reassuringly, several state attorneys general are fast-tracking efforts to replace the protections with new legislation, new legal decisions or some combination of the two.

In the meantime, SMB help desk leaders should:

  • Carefully examine ISP plans, contracts and billing statements. Do not assume these will remain unchanged month to month.
  • Understand that costs for real-time IP services (VoIP, video calls) could increase as ISPs seek a premium for these types of IP traffic.

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