Now that the FCC has ruled in favor of net neutrality, startups trying to break into the thriving Web app marketplace, develop a mobile app, or do pretty much anything related to the internet can rest easy. Or can they? The ruling has hints of additional regulation, and there's a clear indication that the FCC now views the open, free-form internet (controlled, as we all know from the book Tubes, by no one entity in particular) as something more like the power or gas company.

As with any major pronouncement, this could have an impact on small business. Regulation often leads to more taxes, more government control, and more fees. To find out if turning the internet into a utility could have a big impact, I asked Robert Neivert, the COO of Private.me (a search engine that uses encryption to protect your identity) and an expert on internet issues for business, to explain some of the ramifications.

What does it mean for small business that the internet is now a utility?

Depends on the business. What this changes is that they know they will not have to pay "special fees" to reach their internet customers, and they will know that everyone can get to their site without bias. There is no need for them to make any special agreements with any ISPs to get their Web and mobile content out. That being said, it also means a slightly higher monthly bill for the overall connection and bandwidth, since the infrastructure still needs to be paid for.

Do you think that paves the way for more regulation?

Yes, I expect that ISPs will face some additional regulations and hurdles. As for what kind, it's hard to say, since the FCC is in the process of "tuning" the exact regulations. For this reason, we will know a lot more in a few days when we see the actual regulations that are proposed. But at the very least, they will face similar regulations and reporting standards as other Title II regulated companies.

What would be the benefits to small biz when the internet is seen as a utility?

Similar to what I mentioned in the first question, small businesses can now treat the internet as fully open and unbiased. Everybody gets content, and everyone gets it equally fast, so no need to deal with the ISPs with the exception of buying service.

The big beneficiaries are those in rural or under-served areas. Given Title II, the ISPs now need to provide them with service at a reduced cost (everyone pays a bit more to cover the rural customers, in the same way it works with phone services now). So what this means is a bit of a shift to enable small businesses to compete on equal ground with larger ones, at least when it comes to this issue.

Why was Google executive chairman Eric Schmidt not that optimistic about all of this?

There is both some gain and some issues for Google here. Since Google can pay, it's worth it for them to pay to get priority over their competitors, so this takes away one of their advantages. However, it also might be disadvantageous, since ISPs could also steer customers away from Google (for a payment) to their own services without Title II.

For Google fiber, there are other pros and cons. With Title II, they will face more regulation, but it might also clear the way for them to use the existing infrastructure (e.g., telephone poles) for their use. Today, they are often blocked by the existing ISPs, but with Title II they can probably push forward and get access.

How does having the internet seen as a utility like the power company affect internet rights?

FCC Chairman [Tom] Wheeler has already stated that he intends to add in some privacy rights as part of this regulation, so once we see it we will know more. If by internet rights you mean a citizen's right to access, that is definitely improved here. Especially for rural or underserved businesses and users. Now, the ISP's must provide them service, so this is a big win for rural or urban areas that have been underserved in the past.

Published on: Feb 27, 2015
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.