Chicago companies fear unknown in net neutrality repeal
Federal regulators’ decision to end net neutrality and roll back regulations that some say kept data flowing freely on the internet has left some Chicago business owners concerned for their companies’ futures.
While it’s still unclear exactly what the repeal of the Obama-era rules will mean, proponents of net neutrality fear internet service providers will set up toll lanes on the internet, charging some sites to deliver content faster. That could inhibit growth at tech companies, some in the industry say.
“The bigger companies, my competitors for instance, will have a pile of cash to say, ‘Yeah, no problem, we’ll pay,’” said Stu Grubbs, co-founder of Chicago-based Lightstream. The 14-employee startup builds production software for live streaming. “By the time I do have the money to get past that block, they’ll have … beaten me out.
“It stifles innovation. It stifles growth to be able to move to new markets,” he said.
Adam Selsby, founder of Chicago-based online buying platform Treatail, said startups would be forced to make a choice: Put resources into making their product better for consumers or focus on back-end changes that would reduce their bandwidth, which could get more expensive.
There’s so much labor that goes into developing code and technology, Selsby said. Getting the products to consumers is supposed to be the part that’s inexpensive. Lifting net neutrality could change that.
“It’s not easy to be a startup and have one of your table legs potentially shaky,” he said.
Thursday’s 3-2 party line vote by the Federal Communications Commission gets rid of the rules put in place in 2015 by Democrats that tried to keep data flowing freely online.
Those rules provided utility-like oversight of the internet, and that’s exactly how the internet should be regulated, said Mike Chapple, associate teaching professor at the University of Notre Dame’s Mendoza College of Business.
Broadband internet access is a monopoly in many areas of the country, he said in an email. That is not a free market and should be regulated like other utilities.
“The electric company doesn’t tell us how we may use power, the telephone company doesn’t limit the phone numbers that we may call, and service providers shouldn’t restrict our access to the internet,” he said.
The impact on many companies remains unclear, but Sean Brown, CEO of Chicago software company YCharts, said things certainly aren’t going to get any easier for his company, which he says is “borderline profitable.”
Brown said the company will weather any fees that come its way, but they’ll cut into YCharts’ margins, hindering the company’s growth.
“I’d rather be spending money on hiring an engineer to make my software better, or a new person to serve my customers,” he said.
Proponents of the repeal say it will restore the lighter regulatory approach that existed before 2015 and allowed the internet to flourish.
But not all experts believe the repeal will have a significant impact on consumers or businesses.
Larry Downes, project director for Georgetown University’s Center for Business and Public Policy, said it’s unlikely that there will be any short-term impact of the repeal and he’s “very skeptical” that any change will come in the long-term, either. That’s because it’s happened before.
“The groups claiming the sky is falling are really being disingenuous,” Downes said. “All the rhetoric we’ve heard has been amped up this time around, but this is the same thing we heard in 2014. And it worked then, too.”
In all, Downes notes there have been six policy reversals related to net neutrality in the last decade. In the end, the move on Thursday will have “very little impact on daily life,” he said, noting the expected legal challenges and the likelihood that the repeal would be reversed in a new presidential administration.
“It will never be resolved, and it will never be enforced,” he said. The only way the issue will be lastingly resolved is through Congressional legislation, Downes said, which would take net neutrality out of the battle between regulatory bodies.
“It’s not over,” he said. “We’re just on Round 10 in a fight that has infinity … rounds.”
Originally featured in the Chicago Tribune.