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What Net Neutrality Means for E-Commerce SMEs

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E-Commerce Small and Medium-Sized Enterprises May Be Hardly Affected by the Repeal of Neutrality of the Net by the Federal Communications Commission of the United States this month.

The move will allow internet service providers to block and manipulate the use of the Internet and to discriminate users at will, according to critics.

“The abrogation of Net Neutrality primarily helps affiliates and large corporations to the detriment of small businesses, startups, innovators and entrepreneurs,” said Michael Copps, former special advisor to the CCF.

“In ecommerce, I’m looking for big groups like Amazon and Google to dominate the market, as well as ISP affiliates,” he told the E-Commerce Times. “The little ones will have to make pay-and-play deals to make progress.”

There are basically three models of net neutrality, suggested Ray Wang, a senior analyst at Constellation Research, who described them using a metaphor for the highway:

  • Regular highway, no carpool / HOV lane or FasTrak congestion payment model. It’s a common understanding of net neutrality, he said. “Everyone can access the Internet at the same speed, which can be very slow or very fast.”
  • VMO track model. “One day, we realize that we must grant special rights to emergency vehicles and carpoolers, so we give them special status over others for the public good,” said Wang.
  • FasTrak congestion payment template. “We then create situations because we have HOV lanes that some people want to pay to get around and others want to monetize,” he continued. “Suddenly, we find injustices there.”

The United States is about to move from the first option to the second and third options, Wang told the E-Commerce Times.

The Repeal of Net Neutrality “will make it more difficult for smaller players to have faster access and compete with the big boys unless it’s there. have safeguards established by the government, “he noted. “The question is who determines who will be in the HOV lane, and who is charged with political pressures, special interests, stories and agendas about people who are deprived of their rights. their rights. ”

That will mean “more money is needed to lobby and pass a law and deal with new regulations,” Wang said, “and more paperwork and more government, which is anathema to the small enterprises.”

The bright future of e-commerce SMEs

SMEs have big bets on e-commerce, suggests a US national.
survey conducted by DHL this spring.

Twenty-five percent of the 14,000 respondents to the survey expected e-commerce sales in the first quarter to increase by 7 to 100 percent over the first quarter of 2017.

The survey was conducted through a combination of direct contact with DHL customers and a targeted Twitter survey, DHL spokesperson Stephanie Schiff told the E-Commerce Times.

Participating DHL customers reported that they shipped more than 50% of orders as B2C orders received online. Non-client participants were SMEs, but not all of them had e-commerce components. Public sector organizations and national or multinational companies have not been included.

“SMEs tend to get a disproportionate share of their sales through promotion on social networks” and the repeal of net neutrality “should particularly hit SMEs,” said Rebecca Wettemann, vice President of Research at Nucleus Research.

“When ISPs decide on priority content, they decide which social channels are prioritized or blocked,” she told the E-Commerce Times.

Service providers “may simply decide to charge different retailers different prices for delivering their content,” said Wettemann. “What is the current rate for having the highest speed of service on Black Friday? There is simply no way for SMEs to compete in such a bidding war.”

SMEs speak

“The worst case for a small business like mine is like this: Comcast starts a wine club, and, when people are looking for one to join, instead of being shown the first results of Google, they are shown The Comcast option “Mark Aseltine, founder of
Uncorked Ventures.

“Or the results of Google and sites like mine are so slow that it’s easier to join the Comcast Wine Club,” he told the E-Commerce Times. “We can not do much about [that] but we can work on speed and branding where people would find our site fairly quickly and directly request our site.”

The consequences in terms of smothering innovation and the lack of potential for creating an e-commerce business “will be enormous,” predicted Aseltine.

On the other hand, “e-commerce stores have much more to worry about as the cost of their bandwidth increases slightly,” observed Allen Walton, founder of
Spy Guy.

“How about that they focus on doubling or tripling their annual earnings instead of disagreeing on something that might not affect them?” he suggested.

“I pay $ 79 a month for unlimited bandwidth on Shopify, they could raise that price 10 times and I will not even care,” he told the E-Commerce Times.

The battlefield of net neutrality

Various public interest groups, including Free Press and Common Ground, have challenged the FCC’s repeal of Net Neutrality at the US Circuit Court of Appeals DC, which is expected to hear arguments in this case by the end of the year.

Thirty-six states have proposed or passed a resolution, bill or decree supporting net neutrality in one way or another, even if some of these efforts have failed.

In California, Bill SB-822, called “Net Neutrality Bill”, was killed last week.

Some state legislators, led by Miguel Santiago, chairman of the state communications and transfers committee, eviscerated his text, which led to accusations of corruption.

“Net neutrality is a good thing,” said Aseltine. “Until I hear a good argument for why this is not the case, I will support a reversal of the repeal.”


Richard Adhikari has been a reporter at ECT News Network since 2008. His fields of intervention are cybersecurity, mobile technologies, CRM, databases, the software development, the central and midrange computer. and the development of applications. He has written and edited for many publications, including Information Week and Computerworld . He is the author of two books on client / server technology.
Email Richard.