News / Calgary

Net Neutrality rollbacks could spell doom for Canadian online business

Lack of regulation could create uneven playing field for smaller companies

Rollbacks in U.S. net neutrality regulation could have a big impact on Canadian-based online businesses.

Canadian Press

Rollbacks in U.S. net neutrality regulation could have a big impact on Canadian-based online businesses.

As the U.S. plans to roll back net neutrality regulations, Calgary businesses are worried about the devastating effects it could have on their services.

What this means is, U.S. internet service providers could essentially split the internet into fast and slow lanes, with companies paying for the privilege of operating in the fast lane – meaning they load faster or stream video better than the competition.

Calgary Startup Advertiise, for example, has an online platform to buy and sell unique and unconventional advertising opportunities. A large share of their customers are in the U.S. – and losing the ability to compete could hurt their steadily growing company.

“U.S. business is critical to us surviving,” said founder Mark Vella, adding a ‘pay to play’ model prevents companies like his from getting a foothold online. “You’re just going to see the conglomerates get bigger and bigger, and what that means for the Canadian market is less competition, and that’s definitely not a good thing.”

Why is Net Neutrality important?

Net neutrality regulations essentially stop internet service providers, like Telus or Rogers (or Comcast in the U.S.) from giving preferential treatment to certain web platforms. In a purely hypothetical example, this means Amazon could pay for the privilege of loading faster on your home computer, while Ebay loads a bit slower. Or Netflix could pay for faster speeds, so their videos stream better and smoother than Amazon Prime or Hulu.

Or if not speeds, then companies like Rogers could make it so only their products do not count against data caps, called zero-rating, which could give them an advantage in the marketplace.

In Canada, the CRTC has a framework in place to stop this controversial, preferential treatment on the internet, thought they still do review proposals on a case-by-case basis.

The Federal Communications Commission building in Washington.


The Federal Communications Commission building in Washington.

In the U.S., the government passed a number of consumer protections in 2015, to stop telecoms from pursuing this kind of behaviour, but under new FCC chairman Ajit Pai (former employee of Verizon), the organization plans to roll back these regulations and place more control in the hands of internet service providers themselves.

Alyssa Moore, policy and strategy analyst with Canadian technical agency Cybera, broke down the possible consequences.

First: If you’re a Canadian company hosting your platform on Canadian servers, and you’re competing with a company in the U.S. that can pay for preferential treatment, it means you don’t even have the option of competing with them on a higher speed.

Second: If you’re a Canadian company hosting your platform on American servers, you may have the option of paying for preferential treatment – or getting burned if you don’t (or can’t afford it).

Third: It could create more pressure to roll back Canada’s own net neutrality regulations, which Moore said are relatively strong.

“It can potentially embolden Canadian ISPs to double down and lobby harder with the CRTC and the Government of Canada for loosening net neutrality protections that we already have here,” she said.

Where the internet right now is a level playing field, small businesses could be boxed out once regulations are pulled back.

The United States Federal Communications Commission will vote on the Restoring Internet Freedom Order, which has been widely criticized for removing consumer protections, on Dec. 14, where is it expected to pass under the Republican controlled commission.

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