Why small internet service providers don't want net neutrality

May 30, 2024

Just over a month ago, the FCC voted to reclassify the internet as a Title II utility, giving the FCC broad oversight and control over internet regulations. Among other justifications, FCC Chairwoman Rosenworcel has made claims about the benefits this will provide in expanding reliable internet access to all Americans. As I've written previously, that goal is better achieved without a heavy-handed regulatory framework. Unsurprisingly small and medium internet service providers agree. 

ACA Connects, an advocacy group of more than 500 members of small to mid size companies in the networking space, has strongly opposed the move. Even as Chairwoman Rosenworcel claims this shift will protect consumers and expand choice, the very companies that can disrupt monopolistic markets disagree:

“These sweeping mandates will add unnecessary ‘friction’ to our Members’ business decisions, at a time when they are working to expand connectivity and help close the digital divide.  As one of my Member company executives told me in a conversation earlier this week, ‘Every dollar we spend on regulatory compliance is a dollar we don’t invest in our networks."

The larger players in this space have the bandwidth to research into regulatory compliance and make the changes, but smaller, leaner companies do not have this luxury. By the very nature of heavier scrutiny and complicated rules, the FCC is creating an atmosphere hostile to small companies challenging the market dominance of major ISPs in an area. This necessarily leaves certain regions with as few as one choice for internet service providers.

What about the enforcement of net neutrality? The FCC offers consumer protection as another major reason for tightening their regulatory grip on the industry, but ACA Connects and its members provide the straightforward response: small companies have fewer resources to compete with larger players, which makes their focus on good pricing and excellent service a top priority. This, of course, is how free markets operate best. Direct accountability to customers and lean models that small businesses can offer make up what larger entities have in resources. In attempting to regulate good outcomes, small businesses get squashed in the process of verifying what they were already doing. 

Closing the digital divide and providing more choice for consumers in the broadband space are laudable goals, and small to medium ISPs are essential in achieving them. Title II reclassification and mandating net neutrality will be a painful thorn in the side of those seeking to give consumers choice. 

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