Net Neutrality and its Impact on Innovation

Net NeutralityIn today’s technologically advanced society, the Internet is a vital resource for start-ups and established businesses alike when it comes to driving innovation. From finding new ideas to testing prototypes, the Internet provides a vast multimedia platform through which companies can innovate on a global scale.

However, in recent months the topic of ‘net neutrality’ has become a growing concern for innovators. Simply put, net neutrality is a practice which ensures that Internet service providers (ISPs) should be legally required to enable access to all online content and applications regardless of the source and without favoring or blocking specific products, services or websites.

In this manner, net neutrality provides a level playing field where businesses of all shapes and sizes can drive innovation and compete for the attention of consumers without restriction. Until recently, net neutrality has been upheld by the Federal Communications Commission (FCC) and their 2015 Open Internet Order. However, on December 14th, 2017, the FCC voted to repeal the current US legislation on net neutrality. Given that the previous US administration proposed a strong defense of net neutrality on the grounds that it promotes innovation, we have to wonder how will this recent decision affect start-ups and small businesses? As an Inverse article highlights;

“We are still in the infancy of the web…We are just starting to see AR, VR, and mixed reality take off. This field plus many other new technology fields will need access to even fast(er) networks and more data delivery. Incumbent technology companies plus start-ups will be racing with each other to develop the new ideas. Start-ups to challenge and progress the status quo will need the critical access to an equal and fair playing field”.

After all, companies such as Google, Apple, Amazon and Netflix as well as small businesses and individual users have voiced their outrage at the repeal of net neutrality on the grounds that it will enable ISPs such as Comcast, Verizon and AT&T to corner the market it and price out competition. But how is this possible? One article, “The End of a Free and Open Internet?”, advocates that;

“The end result would mean that even if you paid a more expensive monthly fee for high speed internet, the loading times of certain websites could still be significantly lower if the site in question did not have a deal with your ISP. For example, if your ISP had a partnership with Netflix then they could slow down the loading times of sites such as Amazon Video in order to make their own TV and movie services more appealing”.

In this manner, it is suggested that small content producers will not be able to afford the rates which ISPs will inevitably charge for faster loading times. As such, the repeal of net neutrality could create a ‘two-tiered’ Internet where wealthy established corporations pay for their preferred content to be delivered at rapid speeds whilst start-ups and small businesses are left with slow loading times which will actively deter consumers, hinder their profit margins and stifle innovation within the international marketplace. As Nicholas Economides, professor of Economics at NYU Stern School of Business, aptly states;

“The greatest threat to innovation is if new companies, innovative companies, have to pay a lot to be on the same playing field as everybody else…Net neutrality supporters worry there might be secondary effects from limiting the free flow of ideas and information online”.

Fortunately, there is a light at the end of the tunnel. Experts such as University of Pennsylvania professor Gerald Fauhaber have argued that eliminating net neutrality could actually benefit small content producers and drive innovation. In a Spectrum article, Faulhaber compared tiers of Internet speeds to the various delivery services offered by a post office;

“One company can pay a little extra for expedited service while others who don’t need rushed delivery simply pay the standard rate…We’ve heard this about how only large firms will be able to do it, but if you look at the way the economy works—that’s not true at all…The only people who will buy it are those that need it, and if you’re a small firm and you need it, you’ll buy it…I don’t see this as removing opportunities, I see this as creating opportunities for innovation”.

Regardless of the ultimate impact of net neutrality, the art of innovation is often driven by having access to the right resources. By focusing upon garnering data on your target market, refining ideas and testing prototypes, creators equip themselves with the power to define how, where and when they innovate; irrespective of loading speeds. To learn more on the ways in which your company can drive innovation, why not sign up for the IdeaScale newsletter today? The newsletter provides insightful updates on important changes in the technology sector which will help your brand to engage with a larger network of clients.

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This is a guest post authored by Amber Tanya, a writer from Kent, England. Miss Tanya has worked as a ghost writer servicing multiple international news and automotive publications. Miss Tanya also holds a First Class Honours degree in English Literature from an esteemed British University. She primarily writes technological, travel and scientific articles but is versatile and enjoys writing across a broad range of other topics. You can contact Miss Tanya at [email protected] Miss Tanya can produce outstanding content upon request and can adapt her writing style to suit the tone of your brand.

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