THE BLOG

Small Business Not Neutral on Net Neutrality

04/28/2015 05:57 pm ET | Updated Jun 27, 2015

Main Street, back street, home-based business owners, freelancers, mompreneurs, Etsy artisans - all should hail the decision by the Federal Communications Commission to regulate Internet providers as utilities and fight to keep the newly published rules intact. No sooner were the rules published than three lawsuits were filed by the big broadband companies and a bill introduced to block the rules from taking effect on June 12.

The big deal is that all customers, all websites must be treated the same. No blocking or slowing Internet of speeds. No selling faster access to those who can afford it. Our smallest businesses depend on net neutrality.

Faster access and thus equal access to the Internet means everything. That means they can compete with the larger businesses. Let's say you need to buy a gift. You google "unique women's earrings." Up pops an Etsy store and Macy's. You click on the Etsy store, but the page takes a while to load, so you click on Macy's and it loads right up because Macy's paid for faster speeds. The Etsy store didn't even have a chance to compete with Macy's and loses a client. The recent FCC ruling makes sure that is not going to happen.

The FCC ruling is crucial to the entrepreneurial climate of this country. Eighty-eight percent of the country's businesses have less than five employees, that's 26 million businesses. And 70% of those businesses are independent workers.

Firms are starting smaller and staying smaller and more people choose to be their own boss. The average size of new start-ups went from 7.6 employees in the 1990's down to 4.7 employees in 2011, according to the Bureau of Labor Statistics. The State of Independence Reports by Emergent Research find that self-employment is a strong and significant labor market trend. The number of independent workers grew from 15.9 million in 2011 to 17.9 million in 2014; with another 12 million who are 'side-giggers' or using self-employment to supplement their income.

Collectively, these microbusinesses are a significant part of our economy, making up one-third of GDP and accounting for two-thirds of employment. Supporting and strengthening them creates a strong and diversified infrastructure of many small, locally-owned businesses that will be the centerpiece for the new economy.

We call this the D-I-Y economy, a parallel to the growing D-I-Y and maker movement. Instead of remodeling your home or building your own solar powered radio, the D-I-Y economy is "about driving economic development at the local level, with local leadership, guided by a more robust and sustainable vision."

A healthy D-I-Y Economy ecosystem has five components, the five 'C's that interact: Coaching/training, Capital, Connections, Culture, and Climate. When the pieces are in place, local economies can foster independents and microbusiness owners and create a sustainable, self-reliant, and thriving local economy.

The FCC's rules fall under 'Climate', as in a favorable regulatory climate for entrepreneurship. In this case, more rules mean more competition so that smaller players can play the same game as the big companies. AT&T, Comcast, Verizon and other Internet providers won't be permitted to slow services or apps, block content, or charge fees for faster access.

An equal access internet fosters the 'Connections' to markets. For better or worse, technology is a big driver of this trend toward independent work through platforms such as the aforementioned Etsy, TaskRabbit, Handy, Elance Odesk, Lyft, eBay, and others. The platforms provide small businesses with easy access to customers and clients. Additionally, some of the platforms connect their business owners with coaching and training opportunities as well as capital access opportunities.

If the battle was won, the war isn't over. Most lawmakers profess to support small business. If they are true supporters, then they should support 'net neutrality' and refrain from signing on to any legislation that threatens it. Else, they are paying lip service. The small business community needs to keep their legislators true to their professed values and call on them to support an open Internet. Else, small businesses will be at a competitive disadvantage.