Net Neutrality is Good For Developing Countries

Los Angeles, CA (TFC) – Last year, the Federal Communications Commission finally reaffirmed their commitment to net neutrality after a lengthy and high profile debate that started in 2014.  This debate attracted much public interest with consumer advocacy groups, corporations, public figures, and politicians taking stances on this issue.  However, what was ignored in this debate (as usual), was the impacts that the net neutrality decision would have on the rest of the world.

Net neutrality is a doctrine that regulates the way that internet service providers can deliver information to their customers.  The internet is essentially a network of computers through which information flows.  The conduits that this information flows through are controlled by internet service providers, who charge you to use them.  Internet service providers have a natural monopoly on these conduits and thus have control over who can send and receive communications over the internet.

Since internet service providers control these conduits, they have the ability to limit, or even effectively prohibit, access to certain parts of the internet.  This can be achieved by slowing down the speed that people can connect to certain sectors of the internet or even blocking access altogether.  As a result, there are concerns that internet service providers would monetize this ability.  The concern was that they would force websites to pay a fee or to bid against each other to ensure that their connection speed won’t be reduced.

People were alarmed by this possibility for numerous reasons.  First, they were concerned that it would pose a threat to free speech since it could be used to prevent access to and effectively censor certain websites.  Many businesses were also worried because the ability to monetize internet speed would almost certainly favor larger businesses since they would have greater financial resources.  As a result, there were concerns that corporations could engage in anti-competitive business practices by paying internet providers to slow down internet access to their competitors.  This would be especially damaging to startups who rely on the internet to gain a footing in the market.

In order to alleviate these concerns, the doctrine of net neutrality was initially adopted and enforced by the FCC in 2004.  Under this doctrine, all internet communications must be treated equally by internet service providers regardless of origin or content.  In practical terms, this forces internet service providers to transmit data from all websites at the same speed, which ensures a level playing field.

Net neutrality has provided many benefits to America as it has promoted a competitive business environment and free access to information.  However, the benefits of this policy extend well beyond America’s borders.  Many developing countries have become more connected through the internet, which has opened up many possibilities in terms of their economic growth.  Traditionally, the economies of developing countries have been based on agriculture, the export of natural resources, or manufacturing.  However, with the spread of the internet to these countries, they can now engage in the information economy which provides greater economic prospects.

Many developing countries have taken advantage of this model of development.  This has led to the emergence of many small and medium-sized enterprises that engage in e-commerce and other technology-based services.  For example, websites that are similar to Amazon have emerged in Africa.  Countries, like the Maldives, have also begun to offer IT services, which provides much needed income and government revenue.  A rapidly growing startup scene in Africa and Latin America has also taken hold.  This has provided these regions with opportunities for entrepreneurship.  As a result, participating in the information economy has become a promising strategy for these, historically aid-dependent, countries to grow their economies, build their own value-added industries, and take greater ownership of their future.

The success of this development strategy, however, relies on net neutrality.  The technology firms that operate in developing countries are relatively small firms that will eventually have to compete against large tech firms in a global economy.  If net neutrality were reversed and internet service providers were allowed to monetize their control of the internet, tech companies in developing countries would have to compete with these tech giants for preferential access to their customers.  The smaller tech companies would almost surely lose this battle which would put them at a competitive disadvantage and threaten their viability.  This would effectively derail the information-based development strategy that has benefited these countries.

The impact that net neutrality has on developing countries demonstrates the effect that American internet governance policy has on an increasingly globalized world.  Net neutrality, in addition to benefiting the US, has allowed the Global South to develop economically by competing in technology-based industries.  However, there are still many who wish to overturn net neutrality and if they succeed, America, along with much of the developing world, will pay a steep price.  As a result, it is of the utmost importance that net neutrality be upheld and protected.

Disclosure:  The author is involved with and holds equity in a tech startup based in Botswana.