Net Neutrality’s Demise is a Travesty for Independent Retailers
If you’ve been paying any attention at all to the news over the past few weeks, you’ve likely heard about that little policy debate that’s been taking place at the Federal Communications Commission. It centers around this notion of “net neutrality,” a very soft and cuddly sounding term that refers to the “open and equal internet”—another lighthearted, buzzy-wordy sort of phrase.
On Thursday, the FCC voted to repeal net neutrality rules that were first proposed during the Bush Administration era in 2005 and finally implemented during the Obama Administration in 2015. The repeal still needs the approval of Congress—which, who knows what can happen there—but it’s fair to start wondering what impact this decision will have on the consumer electronics retail community, and the wider retail community in general.
First, it might be helpful to understand what net neutrality accomplished in its two years in effect, and why exactly FCC Chairman Ajit Pai wanted to tear it apart. Net neutrality, explained simply, ensured that the internet was a level playing field for all websites. No matter the size of the business or how deep their pockets ran, every single website is granted the same open access. Internet service providers were not allowed (legally) to throttle certain websites or grant larger amounts of bandwidth to websites. Every website and every business that hosts content on the internet is given a fair shake, no matter their size, the broadband pipes they travel over, etc.
Pai’s argument is that, by repealing these rules, telecom companies will have to be transparent about their offering, so if they decide to charge more for one service, it will let the consumer decide whether or not they want to buy into that service. You can already see how, without net neutrality rules in place, the opportunity is even presented to ISPs to charge more for website access that—to this point—is free and open.
And if you think ISPs like Comcast, Verizon, Time Warner, and others are going to, for a second cater to the notion of “increased competition,” you’re kidding yourself. Take a look at your current cable bill and tell us how that’s going for you?
What’s even better is that, creating a competitive landscape for ISPs sounds like a way to prevent internet costs from getting out of control, but there’s still nearly a third of the country that only has access to one internet service. So, who’s to stop those mini monopolies from creating an internet nightmare for those customers? And sure, the FCC and Federal Trade Commission announced a plan to “police the internet” after the repeal—but those agencies combined aren’t the least bit equipped to handle such a gargantuan task. FCC Commission Mignon Clyburn admitted as much: “The agreement announced today between the FCC and FTC is a confusing, lackluster, reactionary afterthought: an attempt to paper over weaknesses in the Chairman’s draft proposal repealing the FCC’s 2015 net neutrality rules.”
Impact on Retail
So, what then should the retail community be worried about moving forward as it relates to net neutrality?
The answer to that question depends on the size of your business, really. If you’re a Walmart, Target, Amazon, or anyone of that size, this means nothing to you. If internet service providers start asking you to pay more to ensure you’ll be able to provide consumers a seamless, uninterrupted, smooth user experience, you’ll be able to do just that. And, given your reputation as some of the go-to retail brands online, if consumers are asked to buy into a package that gives them access to your website so they can continue to shop you, you won’t have to worry, because of course they’re going to want to pay for access to your website.
Independents? Regional chains? Tiny, one-store shops in Middle America? You might fall into the black holes of the internet as these ISPs throttle access to your site or cut you off completely because you can’t afford to pay up for access to the internet’s fast lane. So, the user experience is likely to be shoddy—and that’s if they are even able to find your website in the first place.
Small businesses rely heavily on their stature and self-marketing in the local community. And, even if they haven’t made ecommerce a top priority, they’re ability to get a website up and promote themselves on social media and through other channels on the internet has played at least some role in their marketing efforts. Gutting net neutrality puts the power in the hands of greedy communication firm executives who, with a single swipe, can upend any small business.
That’s what repealing net neutrality means to the retail community. It’s an unfortunate situation that we find ourselves in as an industry. Retailers already have to fight Amazon and other big name players who’ve molded their entire businesses around internet sales. And now, with the help of our own government, they appear to be on the verge of having unrivaled control of the future of the internet.