Start-ups affected by internet debate

Kathleen Brooks
IF YOU haven’t heard of the net neutrality debate then you soon will. The debate centres on whether internet service providers (ISPs) have the right to charge different prices for various services on the internet. For example, downloading a video might cost more than just opening a web page.

The debate stepped up a gear in the US last week when Google and Verizon told the US Federal Communications Commission (FCC) that they support proposals to charge for certain internet services. This has outraged supporters of net neutrality, who believe that all content delivery on the web should be charged at the same rate. They argue it will create a two-tier internet service with a fast-lane for those who can afford it.

The FCC now has to make a decision. Although it will only affect internet services in the US, the UK authorities will be watching with interest. The government has pledged to support net neutrality, but it will be interesting to see if this position can be maintained if US rules change.

Both the Federation of Small Businesses (FSB) and the Forum of Private Business support net neutrality. “If we moved to a system whereby connection speeds are auctioned off to the highest bidders, small firms would undoubtedly lose out as they simply don’t have the cash reserves to compete with big businesses,” says Chris Gorman from the Forum of Private Business.

The plans to charge for internet access does have some benefits, says Jag Singh, co-founder of MessageSpace, an online advertising business. And Singh is not alone. Some people argue that millions of people downloading video all day slows the whole system down, so people who do this should pay for the extra bandwidth they use.

However, Singh is concerned that it will increase costs for businesses and entrepreneurs: “One of the trends in the start-up movement is the reliance on cloud-computing. If “toll roads” are placed all over the internet, all these services powering my product will cost more, and there will come a point where it’s just going to be too expensive for me to have to pay-to-play. This means that in the long run I won’t be able to create jobs. No one wins under that scenario, in my opinion.”

But Singh does not think the UK will follow the example of the US if the FCC decides to abandon net neutrality: “Ofcom is a lot stronger from a regulatory perspective than the FCC. I just don’t think it would let this sort of thing become enforceable,” adds Singh.