2017 was the year of the political scoop. With Trump’s inauguration, Brexit negotiations, and the snap election all dominating the front pages for the majority of the year, political commentators and journalists alike were kept extremely busy. As 2017 drew to a close, however, there was still time for one more major news story. As a Federal Communications Commission voted to repeal the laws surrounding net neutrality in the US, the future of the open internet was cast into doubt. The decision to repeal these laws and regulations threw up numerous question marks, but one of the most pressing concerns is the impact that repealing internet neutrality will have on the future of research and development. This blog post will explore the world of research and development without the support and backing of net neutrality.
What is net neutrality?
If net neutrality is the principle of Internet service providers treating every website on the Internet the same, then repealing this law creates a ‘free market’ for Internet Service Providers (ISPs) to outline their own rules and guidelines for their services. In the event of net neutrality being abolished, ISP’s would be well within their rights to charge users to visit specific sites, and they would also be entitled to charge those websites to be visible to every user.
The internet remains one of the few free entities at the disposal of startups and small businesses. With access to the web, businesses can research their industry, develop their products and services, and project their name to a wider audience. It is fair to say that the internet is invaluable to the success of a new company. However, with a decision to repeal net neutrality being pushed through US Congress at a rate of knots, it seems as though the open internet does have a value, after all. The prospect of up and coming businesses having to pay ISP’s to be shown to the population of internet users is a scary thought for any budding entrepreneur, especially when you consider the pre-existing costs that they face. Money is tight in the early stages of a business, with property rents, staff salaries and manufacturing costs constantly tightening the noose on the financial neck of the company. With business rates continuing to rise, the repealing of internet neutrality could well be the trap door for a startup. With small business having to pay for their place on the web, as well as all their other costs, the life expectancy of a startup is sure to decline, and budding entrepreneurs may be put off the idea of starting their own firm altogether.
This is not an exaggeration, either. The internet is one of the most effective tools for businesses in the research and development sector, and net neutrality accommodates for every aspect of a business’s day to day life. Whether it is for research, connecting and networking, or marketing and sales, the open internet is used in almost every single part of research and development. With over 2 billion people owning a smartphone, and with the availability of the internet reaching further and wider, it is easy to see how businesses in the e-commerce sector used their research and development methods to rope in sales of over $2.3 trillion in 2017, according to the eMarketer. Online shopping is showing no signs of slowing down, and this poses another threat to businesses via the repealing of net neutrality. Although internet neutrality has a huge impact on businesses, the role of the public and everyday internet users is also important. If users only pay for basic packages that do not provide access to smaller, independent websites, then this has a subsequent impact on the performance of those businesses. If online businesses struggle to attract enough users to their site then the future looks bleak.
Earlier this year, however, Theresa May’s government outlined plans to support research and development and lend small businesses a helping hand by setting aside £2.3 Billion for investment into research and development. This budget increase, outlined in the November budget, implied that May’s government had identified the industry of research and development as a suitable solution. Whether it be Brexit, the NHS, or any other contentious areas, it can be suggested that all of these talking points can benefit from a multi-billion pound investment into R&D. As part of this investment plan, incentives were also given to small businesses and startups, so maybe an anti-net neutrality world is not all bad news for these startups?
The worst kept secret in British politics at the moment must be Theresa May and her sympathetic view towards the repealing of internet neutrality, and this stance may have been foreseen in her November budget. A boost into R&D may have come in anticipation of net neutrality, and a part of that £2.3 Billion injection into research and development may well have been set aside to ease the strain of a post-net neutrality world on small businesses. If this is the case, then why else would an internet free of regulation be considered?
According to the chairman of the FCC (Federal Communications Commision), Ajit Pai, the prospect of a ‘free online market’ will create healthy competition for businesses, allowing the consumer to decide who wins and who loses. “Consumers will benefit from greater investment in digital infrastructure, which will create jobs, increase competition, and lead to better, faster, and cheaper internet access.”
What does the end of net neutrality mean for R&D?
As small businesses may be unable to stump up the costs for the support of most ISP’s, research and development budget increases as seen in 2017 are likely to be reserved for the wealthiest companies and smaller businesses will struggle to survive in an environment dominated by money.
Despite reassuring the world that an open online market benefits the consumers and puts big corporations on the backfoot, many have their reservations. The end of the internet neutrality laws seemingly shuts the door on small businesses and startups that are unable to pay to have their content available to every user, and wedges the door open for the wealthiest one percent.
As outlined in this blog post, research and development is front and centre of the net neutrality debate as it is with the majority of political and economical issues. R&D is a broad spectrum, and if you believe your business falls in line with this spectrum, then you may be entitled to some tax relief. To find out if your business qualifies for research and development (R&D) tax credits, contact randd uk today by calling us on 01332 477 070 or by leaving us a message via our online contact form.