    [Senate Hearing 115-301]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 115-301

           NET NEUTRALITY: IMPACTS ON NEW HAMPSHIRE SMALL BUSINESSES

    =======================================================================

                                 FIELD HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 3, 2018

                                   __________

        Printed for the Committee on Small Business and Entrepreneurship

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                        ______

    	         U.S. GOVERNMENT PUBLISHING OFFICE

    	30-631 PDF                WASHINGTON : 2018

                COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                         ONE HUNDRED FIFTEENTH CONGRESS

                                  ----------
                        JAMES E. RISCH, Idaho, Chairman
                  BENJAMIN L. CARDIN, Maryland, Ranking Member
    MARCO RUBIO, Florida                 MARIA CANTWELL, Washington
    RAND PAUL, Kentucky                  JEANNE SHAHEEN, NEW HAMPSHIRE
    TIM SCOTT, South Carolina            HEIDI HEITKAMP, North Dakota
    JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
    JAMES M. INHOFE, Oklahoma            CORY A. BOOKER, New Jersey
    TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
    MICHAEL B. ENZI, Wyoming             MAZIE K. HIRONO, Hawaii
    MIKE ROUNDS, South Dakota            TAMMY DUCKWORTH, Illinois
    JOHN KENNEDY, Louisiana
              Skiffington E. Holderness, Republican Staff Director
                     Sean Moore, Democratic Staff Director

                                C O N T E N T S

                                  ----------

                               Opening Statements

                                                                       Page

    Shaheen, Hon. Jeanne, Ranking Member, and a U.S. Senator from New
      Hampshire......................................................     1

                                   Witnesses

    Shoer, MJ, Director, Client Engagement and vCIO, Onepath,
      Bedford, NH....................................................     7
    Zakon, Robert, Chief Technology Officer, Zakon Group, LLC, North
      Conway, NH.....................................................    12
    Pearson, Nancy, Director, New Hampshire Center for Women and
      Enterprise, Nashua, NH.........................................    16
    Luse, Zach, Founder and CEO, Paragon Digital Marketing, Keene, NH    19
    Drake, Lisa, Director of Sustainability Innovation, Stonyfield
      Farm, Inc., Londonderry, NH....................................    23
    Cyr, Joshua, Director of Acceleration and Education, Alpha Loft,
      Portsmouth, NH.................................................    26

                              Alphabetical Listing

    Cyr, Joshua
        Testimony....................................................    26
        Prepared statement...........................................    28
    Drake, Lisa
        Testimony....................................................    23
        Prepared statement...........................................    24
    Information Technology and Innovation Foundation
        Article dated May 2018.......................................    44
    Internet Service Providers
        Letter dated May 9, 2018.....................................    64
    Luse, Zach
        Testimony....................................................    19
        Prepared statement...........................................    21
    Pearson, Nancy
        Testimony....................................................    16
        Prepared statement...........................................    17
    Risch, Hon. James E.
        Prepared statement...........................................     4
    Shaheen, Hon. Jeanne
        Opening statement............................................     1
    Shoer, MJ
        Testimony....................................................     7
        Prepared statement...........................................    10
    Zakon, Robert
        Testimony....................................................    12
        Prepared statement...........................................    14

           NET NEUTRALITY: IMPACTS ON NEW HAMPSHIRE SMALL BUSINESSES

                                  ----------

                             THURSDAY, MAY 3, 2018

                          United States Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                            Durham, NH.
        The Committee met, pursuant to notice, at 10:03 a.m., in
    Room 158, Memorial Union Building, University of New Hampshire,
    Hon. Jeanne Shaheen presiding.
        Present: Senator Shaheen.

    OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A
                    U.S. SENATOR FROM NEW HAMPSHIRE

        Senator Shaheen. Good morning. I'm actually going to sit
    down in just a minute because we have an official format we
    have to follow, because this is an official field hearing of
    the Small Business and Entrepreneurship Committee. So we will
    be following the guidelines that we have as a field hearing.
    But I want to first welcome everyone, and you should feel free
    to move up if you would like, if you have trouble hearing.
        I wanted to thank the University of New Hampshire for
    hosting us this morning. We have Stan Waddel, who is UNH's
    Chief Information Officer who is here, and he will say a few
    words because he is also very interested in these issues.
        So, Stan, before we officially open, I'm going to ask you
    to say a few words.
        Mr. Waddel. Certainly. Thank you. Thank you very much.
        First, I would like to offer each of you a warm welcome to
    the University of New Hampshire. The University of New
    Hampshire is the State's flagship research and education
    institution, home to 13,000 undergraduate students and 2,500
    graduate and professional students, and an estimated $1.5
    billion economic impact on the State of New Hampshire.
        As a technology professional in higher education, I can
    tell you that colleges and universities are watching this issue
    with great concern. We have concerns around whether or not the
    impacts will increase our cost of delivering content for
    students in the education of students. We have concerns whether
    or not it will impact the cost of our research endeavors and
    just in general have an impact on the ability to have a free
    exchange of ideas and information on the internet.
        So we are watching these developments with concern, and I'm
    pleased that you guys are here to discuss this very important
    matter. Given that, I'd like to welcome the panel and Senator
    Jeanne Shaheen.
        Senator Shaheen. Thank you.
        Mr. Waddel. And I'll be brief and just say welcome and good
    morning.
        Senator Shaheen. Thank you, Stan.
        As you can tell, Stan is not from New Hampshire, but we're
    delighted that he's here, and he said he's actually made it
    through three winters now.
        Mr. Waddel. I have.
        Senator Shaheen. So he's here to stay.
        Thank you very much, Stan.
        At this time I would like to officially open the Small
    Business Committee's field hearing in Durham to explore the
    impact of net neutrality on New Hampshire's small businesses.
        Now, before we turn to our witnesses, I'm going to
    introduce a few of the people in the audience today.
        First of all, we have New Hampshire's head of the Small
    Business Administration, District Director Greta Johansson.
    Greta, very nice of you to join us today. Thank you.
        We also have the--I don't know if we have Warren Daniel
    here? Yes. Warren, thank you. Nice to have Warren here.
        And do we have Jason Cannon, the Acting Director from the
    Small Business Development Centers? No.
        So, thank you all very much. It's really important to have
    representatives from the SBA here to listen to the testimony
    about the impact on our small businesses.
        Is Carol Miller here? She is the Broadband--there you are,
    Carol. Thank you. She's the Broadband Specialist at the New
    Hampshire Bureau of Economic Affairs.
        And Liz Gray from Live Free and Start. Nice to see you,
    Liz. Thank you for being here.
        Let me also finally recognize Mike Shultz, who is the Vice
    President for Regulatory and Public Policy, and Ellen Scarponi,
    Senior Director of Government Affairs at Consolidated
    Communications. Thank you both for being here, as well.
        I also want to introduce the staff of the Small Business
    Committee who are here. Despite what you may have heard about
    divisions in Congress in Washington, at the Small Business
    Committee we actually work very well together on both sides of
    the aisle to promote the interests of small business. So we are
    delighted to have staff from both the majority and the minority
    represented here today. We are very glad to welcome Skiffington
    Holderness, who is the Majority Staff Director for the
    committee. He was sent by Senator Jim Risch, who is the
    Chairman of the committee from Idaho. Again, we're delighted to
    have you here. We're hoping that he will stay and spend some
    money while he's here.
        [Laughter.]
        We're also joined by Becky McNaught, who is the Counsel on
    the minority staff for Senator Cardin, who is from Maryland and
    is the Ranking Member. I have a note here that says this is the
    first time for both of you to be in New Hampshire, so we hope
    you will stay and enjoy yourselves a little bit.
        And finally let me introduce the Clerk of the Small
    Business Committee, Kathryn Eden, who is here to make sure that
    all of the notes from today's hearing are properly recorded.
        Again, I want to thank Chairman Risch and Ranking Member
    Cardin not only for sending their staff but also for their
    cooperation in today's hearing.
        I have a statement from Chairman Risch that I will enter
    into the record, and it's very helpful to have his support for
    this hearing.
        [The prepared statement of Senator Risch follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Now, today's format will be a roundtable discussion that
    features our panelists, and because this is an official hearing
    of the Small Business Committee, we will not be able to take
    questions from the audience. I know a number of you here have
    been at other field hearings, so you know that we're all here
    to listen. But the official record will remain open for another
    two weeks. Is that correct? So if anyone would like to submit
    written testimony, we will make sure that that gets entered
    into the record.
        So again, let me welcome all of you. Thank you very much
    for coming to the discussion this morning. This is an issue
    that I think is a key for so many of our small businesses. It's
    also a key for consumers. But as we look at the 99 percent of
    employers in New Hampshire who are small businesses, this is
    really critical. Net neutrality and the importance of
    maintaining an open internet is very important as we think
    about innovation and creativity that's going on with our small
    businesses.
        This week is also National Small Business Week. It's an
    opportunity to celebrate the contributions of small businesses
    to our economy. As I know everybody here knows, about two-
    thirds of jobs that are created are created as the result of
    small businesses, so anything we can do to help them prosper is
    very important.
        Net neutrality, as I think everyone here knows and as our
    panelists will further describe, is the idea that broadband
    providers should not be able to block or slow down access to
    certain websites. Now, this is a principle that I think has
    been key to a free and open internet. It has created a
    marketplace that's robust and a level playing field for ideas
    and commerce.
        Unfortunately, the protections that have ensured net
    neutrality are now at risk because of decisions by the Federal
    Communications Commission last year that voted along party
    lines to repeal net neutrality rules. As a result, unless
    Congress acts, these net neutrality protections will disappear
    later this year, and I think this is a decision that could
    really have major ramifications for consumers as well as for
    small businesses.
        In discussions that I've had throughout New Hampshire,
    small business owners have repeatedly expressed their concerns
    about what the impact of these changes would mean on their
    access to the internet. They're concerned that broadband
    providers will create a pay-to-play system that would put them
    at a competitive disadvantage. Small businesses in rural
    communities are especially concerned. As most of you know, in
    New Hampshire we have parts of our State that don't really have
    access to high-speed broadband, and we have other rural
    communities where they have access to only one provider.
        So it's possible in the near future that the Senate will
    consider a bipartisan Congressional Review Act resolution to
    rescind the FCC's order ending net neutrality, and just
    yesterday a coalition of small business owners across the
    country sent a letter to Congress asking that we protect them
    by overturning the FCC's decision to repeal net neutrality, and
    that letter was signed by 6,000 small businesses across the
    country.
        So as Congress considers whether to let net neutrality go
    forward, today's field hearing is an opportunity for us to hear
    from small businesses in New Hampshire, from those who work on
    this issue in New Hampshire, about what's at stake for them and
    the communities they serve, and I'm looking forward to your
    comments and the discussion today. I will take what I hear here
    and not only will we have it for the record but I will share it
    with my colleagues in Washington.
        So let me begin by introducing our panelists today.
        First we have MJ Shoer. He currently serves as Director,
    Client Engagement, at Onepath, which is a nationwide managed
    service provider with offices in New Hampshire and other
    states.
        Let me just point out that we have longer bios of all of
    the panelists here on the table in the back of the room, so
    please take those. You will be very impressed with the past
    work of all of our panelists.
        Next we have Robert Zakon. He is a technologist and
    entrepreneur who specializes in a wide range of subjects,
    including cyber security, enterprise architecture, cloud
    computing, and the internet.
        Nancy Pearson has more than 15 years of non-profit
    management experience, and she brings expertise in program
    development, delivery, and marketing at the Center for Women
    and Enterprise in New Hampshire, where she is the Director.
    Nancy, thank you for being here.
        Zach Luse founded Paragon Digital Marketing in 2012 and has
    more than 15 years of internet marketing experience, working
    with and consulting for organizations of all sizes. Zach, thank
    you for joining us.
        And Lisa Drake serves as the Director of Sustainability
    Innovation at Stonyfield, which is the leading organic yogurt
    manufacturer based in Londonderry, New Hampshire.
        And finally we have Josh Cyr. He's a UNH alum, and he has a
    background in tech entrepreneurship and software development,
    and he runs Alpha Loft in Portsmouth, which is one of New
    Hampshire's premiere startup accelerators.
        So we're delighted to have all of you here. Thank you very
    much for taking time to join us this morning. We're going to
    ask you to make opening statements of between 3 to 5 minutes,
    and then hopefully we will have time for further conversation.
        I'm going to ask MJ if you would start.

      STATEMENT OF MJ SHOER, DIRECTOR, CLIENT ENGAGEMENT & VCIO,
                    ONEPATH, BEDFORD, NEW HAMPSHIRE

        Mr. Shoer. Thank you, Senator. My wife and I are alums, as
    is our oldest.
        Senator Shaheen. Oh, good.
        Mr. Shoer. My wife and I had our first date in this
    building many moons ago.
        [Laughter.]
        It's a little surreal.
        Senator, thank you so much for holding this hearing. I
    think it's very important to share our concerns with our
    legislators in a very direct way.
        As the Senator said, my name is MJ Shoer. I'm the Director
    of Client Engagement and vCIO for Onepath. We are a national
    company, but by way of local color we have clients from the
    Monadnock region to the North Country and all across the
    Southern Tier, and very well concentrated here in the seacoast.
        For 20 years, I ran a small business MSP in Portsmouth, and
    then merged into a slightly larger company in Massachusetts,
    which is both what's called a competitive local exchange
    carrier, a CLEC, and an ISP. So we've lived and breathed this
    for many years. In addition, all of our clients are directly
    affected by this.
        By way of a unique perspective, I also had the distinct
    pleasure of serving on the Board of Directors of CompTIA, which
    is the Computing Technology Industry Association, which is the
    global IT trade association. I currently serve as the immediate
    past chair, and over the last several years we've actually met
    with our office staff in D.C. when we've come into town
    annually to talk about technology issues. So I've got kind of
    an interesting take on all this.
        Perhaps most interestingly, back in 1995 I was a principal
    in the first dial-up internet service provider in Portsmouth,
    and in a matter of days--not months, not weeks, literally
    days--we had multiple competitors who had also opened up, and
    there was quite a bit of choice in Portsmouth at the time.
        Now, fast-forward 23 years and there's almost no choice. In
    the City of Portsmouth, it's really Comcast if you want high-
    speed internet access. Now, for the business community there is
    some choice, but for the consumer there really is not. So
    choice is a big piece of net neutrality as well. While the
    throttling and the controlling of content has been in the
    forefront, the concept of choice has been a big part of this
    equation.
        To put a little color on it--and not to pick on any of
    these companies but I'm big on word pictures--if there was a
    white board, I'd be doodling, which you're very happy there's
    not. But consider that Comcast owns NBC Universal, as an
    example, and further consider that Verizon is one of Comcast's
    largest competitors. Now, at home on Comcast with my TV
    service, I can get to ABC's network, CBS' network, NBC's
    network, whatever I want. But if I want to jump on the cut-the-
    cord bandwagon and only have internet access and use streaming
    services, Comcast is actually incented with the lack of net
    neutrality regulation to limit where I can go. All of a sudden,
    NBC will perform beautifully, but what about ABC or CBS?
        In higher education, with everything that's going on with
    the internet and being able to offer virtual courses in
    conjunction with on-campus courses, similar issues could
    happen. If a wealthy university, say a Notre Dame or a USC,
    were to make a deal with providers to prioritize their
    courseware at the expense of more moderately sized universities
    like our own, our own UNH could be at a significant
    disadvantage in the field of higher education. And even though
    I'm biased, this is a pretty darn good school. We don't want to
    see that happen.
        But more importantly is how it impacts small and mid-sized
    businesses in the State. It could be crippling without the
    regulations in place. I always like to say it's like the
    difference between Route 95 and Route 1. With net neutrality in
    place, we're all driving on 95 to get where we want to go. But
    if net neutrality is rolled back and I want to go stream a show
    on ABC across Comcast internet, I'm forced down Route 1, and
    I'm going to hit so many lights and so much traffic that I'm
    probably just not going to bother going anymore, and I really
    do believe it's that simple. That is the crux of the issue.
        But let me just quickly share a slightly broader
    perspective from the standpoint of CompTIA, which is that
    CompTIA's membership spans the entire global IT industry. So
    it's large providers, small providers, ISPs, edge providers,
    and CompTIA firmly believe that congressional bipartisan
    legislation is the only way to address this issue. Now, the CRA
    is a great first step. It will get what needs to get done. But
    I believe--this is my personal opinion, not CompTIA's--I
    believe this is a tremendous bipartisan opportunity.
        You're right, Senator, I think most of us out here in the
    real world don't see anything but division and gridlock on this
    side of the aisle or that side of the aisle, and I know I, for
    one, would dearly love to see both sides of the aisle
    collaborate on anything, and this could be a great start. And
    who knows? Maybe it could be the tip of that snowball over the
    top of the mountain.
        But we definitely believe that permanent legislation is the
    way to go because, as it stands right now, many states have
    enacted executive orders, their own laws, and yet the FCC's
    ruling preempts the states from doing anything to begin with.
    So there's instant conflict going on with this.
        I think the summary of it is it's a critically important
    issue. I hope you are very successful in rolling back the
    rollback. That's a double negative, but I think everyone knows
    what I mean. And we do believe that if the CRA is successful,
    the foot should not come off the gas pedal to get that
    permanent legislation in place.
        Thank you.
        [The prepared statement of Mr. Shoer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Shaheen. Thanks very much, MJ.
        Robert.

      STATEMENT OF ROBERT ZAKON, CHIEF TECHNOLOGY OFFICER, ZAKON
                      GROUP, LLC, NORTH CONWAY, NH

        Mr. Zakon. Good morning. My name is Robert Zakon. I'm the
    Co-founder and Chief Technology Officer of Zakon Group, LLC.
    Thank you for the opportunity to provide testimony here at this
    hearing today.
        Zakon Group is a technology consulting development firm
    founded in 2002 and based in a rural county of New Hampshire.
    We work with clients of all sizes in industry and government
    and the non-profit sector, both regionally and around the
    world. That is in large part possible because of the internet
    itself. The majority of our work involves the internet in some
    way, whether it's the application services we develop, the
    content we host, or with the systems we work with.
        The founding policy of net neutrality could very well
    become outright impeded. Let me repeat that: It could be
    hindered or outright impeded. This is something that many
    people don't think of when they're talking about net
    neutrality.
        For example, the internet's openness has allowed our
    company to develop an event management software application and
    provided as a service globally. With users' attention span
    nowadays being fairly limited, and delays of even a few seconds
    resulting in loss of interest, had limitations been in place on
    how fast an end user could access the application it is
    unlikely our software, which has been used by events in over
    100 countries, would have become as popular. As a fairly small
    company, we're not in a position to negotiate enhanced network
    rights for ourselves and for clients given the potentially
    diverse providers involved.
        As it is, some restrictions placed on internet services
    outside the United States have resulted in the application
    being less than fully useful to a few of our international
    clients.
        Also, we currently have a single choice of reliable high-
    speed service. Again, I mentioned I'm in a rural county of New
    Hampshire. If our provider should start charging more for some
    of the services we offer or some of the services that we use
    from others, it would be immediately felt in our bottom line
    and leave us with limited alternatives.
        Beyond my own business, I volunteer as a mentor with
    Schoolwork, a non-profit association and resource partner of
    the Small Business Administration that helps businesses start-
    up and grow. In this capacity I have seen the benefits of
    unrestricted access to the internet by other small businesses,
    including those not in the technology sector such as a small
    retail shop setting up an internet storefront or manufacturers
    collaborating with clients and the like. Limiting the options
    available to these businesses will only serve to stifle their
    growth by causing them to not have or offer the best quality
    service possible. Even the uncertainty of what providers may do
    if net neutrality is not in place, as a client recently
    remarked to me, could be disruptive in the crucial business
    planning and funding stages.
        Having completed a year of public service last spring as a
    White House Presidential Innovation Fellow, I had the unique
    privilege to see the many innovations brought about by small
    businesses that were also of direct benefit to the government
    at all levels. These innovations greatly benefited from and
    were often only possible by an internet with an equal point of
    view.
        In the past few years Federal departments such as those of
    Defense and Homeland Security have recognized the innovation
    potential of small companies and stepped up ways to find them
    and facilitate procurement of their services. Even the public
    sector derives advantages from net neutrality.
        I have watched and participated in the internet's growth
    since the mid-1980s and for the past 25 years have authored an
    updated timeline that provides a comprehensive history of the
    internet. This work, which has been reprinted in thousands of
    books, magazines, and other mediums, tracks the many
    innovations that have been made thanks to an open internet. Had
    roadblocks been placed in this information superhighway and
    which is now so much more, many small businesses that have
    become global corporations, and I'm sure you can name them,
    would likely not have succeeded, and we would be limited to the
    few innovations allowed by the companies controlling the toll
    gates.
        It is the smaller businesses, however, that have brought
    many of the revolutionary innovations in the last couple of
    decades, and much of what you use today just would not be
    available otherwise.
        Net neutrality is imperative to the success of small
    businesses in this country as they continue to increasingly
    rely on the internet, and for the benefits derived literally by
    humankind from the innovations fostered by an open,
    transparent, and equal-access internet. Thank you.
        [The prepared statement of Mr. Zakon follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Shaheen. Thanks very much, Robert.
        Nancy.

    STATEMENT OF NANCY PEARSON, DIRECTOR, NEW HAMPSHIRE CENTER FOR
                    WOMEN AND ENTERPRISE, NASHUA, NH

        Ms. Pearson. Thank you so much for inviting me today on
    behalf of the Center for Women and Enterprise. We're a small
    business resource in New Hampshire. We operate the Small
    Business Administration Women's Business Center. We are the
    only statewide center dedicated to women entrepreneurs.
        One of the things that is of concern for us is that many of
    our clients are underserved in a number of ways, whether that
    be from a demographic or an economic or a geographical
    standpoint, and we provide services no matter where women are
    in their business cycle, whether they're in the idea phase,
    launch, start, or growth.
        One place that is the great equalizer is and always has
    been the internet, and it allows women to operate on a level
    playing field where they normally can't operate. So the
    potential concerns of the end of net neutrality raise a lot of
    questions for us, and they all revolve around that equalization
    issue, and I'm just going to touch upon a few bullet points
    here.
        If, for example, the large companies are able to block or
    slow content in terms of video streaming services from rival
    companies, and if they're creating fast lanes and other things
    that we've read about, there's just no way that small and micro
    businesses, which is the majority of what my clients are
    operating, there's no way that they can compete.
        All internet traffic needs to be treated as equal so that
    small business has access to the same resources as the big
    companies, and this is especially important for startups.
        The end of net neutrality could affect businesses using
    online services that are currently free. So Skype or MailChimp
    or some of the online market research tools, if suddenly they
    have to charge for their services and they were otherwise free
    for small and micro businesses, that could have a significant
    effect on already thin profit margins for small business.
        And in New Hampshire especially, in rural New Hampshire,
    small businesses rely on the internet for sales and for search
    engine optimization because they're just not getting the foot
    traffic that they would otherwise get. I would just like to put
    that in perspective because that affects Cheshire County,
    Sullivan County, Grafton County, Carroll County, Coos County.
    That is the majority of the counties in New Hampshire.
        So the bottom line for us is that New Hampshire small
    businesses and micro businesses rely on the equalizing force of
    the internet. Just to put that into perspective, women start
    businesses at five times the rate of any other entrepreneur,
    and for minority women and women veterans, that number is even
    higher. So when we start putting additional barriers in the way
    of these entrepreneurs, it can have a significant and, I think,
    disastrous effect on the amount of small businesses that are
    opening on a daily basis.
        [The prepared statement of Ms. Pearson follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Shaheen. Thank you. Nancy, can you just define for
    us micro businesses?
        Ms. Pearson. I sure can. So, it's a little bit different
    depending on where you look for information, but in general
    we're talking about businesses with fewer than five employees,
    with revenues under $400,000, in general, and generally
    businesses that require less than $35,000 in seed money to
    start up.
        Senator Shaheen. Thank you.
        Zach.

        STATEMENT OF ZACH LUSE, FOUNDER & CEO, PARAGON DIGITAL
                          MARKETING, KEENE, NH

        Mr. Luse. Thank you, Senator. I'm Zach Luse, Founder and
    CEO of Paragon Digital Marketing. Thanks for allowing me to
    share my perspective regarding net neutrality as it relates to
    small businesses. I'm strongly opposed to----
        Senator Shaheen. Excuse me, Zach.
        Can you all hear in the back?
        Maybe if you pull the microphone closer.
        Mr. Luse. Is that better?
        I'm strongly opposed to the recent decision to repeal net
    neutrality protections. The lack of net neutrality tips the
    scale in favor of large enterprises and puts small businesses
    and startups at a severe disadvantage if large enterprises are
    able to purchase fast lanes to speed up the delivery of their
    websites to consumers. My company is an internet marketing
    company and web development company that helps startups and
    small to midsize businesses succeed and grow online.
        I founded Paragon in 2012 in Keene. We've grown from a
    startup of one, me, and now we're a team of 13 employees in six
    short years. We have clients all over the country, a few
    overseas, in a wide array of industries. At Paragon we've spent
    a lot of time over the past few years making our clients'
    websites load faster, and the amount of time we've spent
    optimizing websites has increased substantially over the last
    couple of years.
        Website speed or load times have a major impact on our
    clients' sales and leads. The issue is two-fold. The number of
    visitors finding a business' website declines when the site is
    slow, and the rate at which people sign up or buy something on
    those sites also declines. That's known as the conversion rate,
    which declines rapidly as the speed of the site slows down.
    Data from Google, Amazon, and industry experts, as well as our
    own data from working with our own clients confirms that
    website speeds do have a big impact on the ability to attract
    visitors to a website and keep them there long enough to buy or
    sign up for a service.
        The speed of a website directly impacts the search engine
    rankings of a website as well. The slower a website is, the
    less likely it is to appear at the top of search results. Free
    traffic from search engines can be extremely important for
    startups or small businesses. Receiving less free traffic from
    search engines makes it harder for startups to gain traction
    and for small businesses to compete if they don't have deep
    pockets to pay for ads.
        In addition, there is a direct correlation between the
    speed of a website, commonly measured by page speed, and the
    rate at which people make a purchase on a website. The
    conversion rate declines rapidly as websites' load times
    increase. A study by industry experts, Kissmetrics, shows that
    just a 1-second delay on page speed can result in a 7 percent
    decrease in conversion rates.
        An internal Amazon study showed that for every 100
    milliseconds, or a tenth of a second, you slowed down their
    website, it would cause them a loss of 1 percent in sales,
    which would cost the company about $1.7 billion a year. Amazon
    is a very well-known and trusted brand. The impact on small
    businesses that aren't as well-known or trusted is likely to be
    greater.
        Consumers expect fast and frictionless experiences online
    and are becoming ever more impatient. This means that speed of
    websites is likely to become more and more crucial over the
    coming years.
        The internet was a great equalizer, allowing small startups
    to innovate and disrupt industries long controlled by large
    corporations. America's small businesses and startups should
    not be put at a disadvantage, and the next YouTube, Google,
    Facebook, or Amazon should have a level playing field, the same
    level playing field that was afforded to the very successful
    internet companies that once were startups as well.
        I certainly urge the committee to work to put net
    neutrality protections back in place for small businesses and
    our country so they can continue to compete on a fair and level
    playing field, and continue to innovate and grow and create
    jobs.
        I appreciate the opportunity to testify. Your interest and
    action on this issue is very important to the future of small
    businesses across the country.

        [The prepared statement of Mr. Luse follows:]

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        Senator Shaheen. Thanks very much, Zach.
        Lisa.

    STATEMENT OF LISA DRAKE, DIRECTOR OF SUSTAINABILITY INNOVATION,
                 STONYFIELD FARM, INC., LONDONDERRY, NH

        Ms. Drake. Thank you for the opportunity to provide
    testimony regarding our company's concerns about the FCC's
    decision to roll back net neutrality. Stonyfield is a yogurt
    manufacturer based in Londonderry, and we work with small
    businesses across the State and the region primarily to source
    our first ingredient, which is milk.
        As a business with strong ties to the rural and
    agricultural business community, we share these concerns from a
    business perspective. We regularly witness how small rural
    businesses, including the farms and cooperatives that we source
    from, already struggle with limited access to broadband and
    limited options for internet service providers. The repeal of
    net neutrality would compound the challenges faced by these
    small businesses, adding cost and creating a competitive
    disadvantage for running a successful business in rural
    America.
        Uninhibited access to the internet is a fundamental
    necessity for operating a successful business in rural areas,
    and this is only going to become more important into the
    future. In our work with farmers in the State and the region,
    we see how these businesses are increasingly reliant on the
    internet for access to technical information and support, to
    market information, and for communication with customers and
    vendors.
        Under this change, internet providers would gain new powers
    to steer businesses and customers using access to the internet.
    For example, internet access providers could charge new fees
    for prioritized access, and while large businesses and farms
    might be able to afford a pay-to-play prioritized fast lane,
    small and medium-sized businesses may not be able to and put
    them at a distinct disadvantage with larger competitors.
        Without net neutrality, internet access providers could
    charge rural businesses new fees for access, specifically to
    websites or to services. They could favor certain businesses by
    slowing down traffic or exempting traffic from data caps.
    Tiered service plans could throttle user access to a limited
    group of websites, or block websites outright. It could also
    potentially limit or bias farmers' access to products,
    services, and information that they need to run their business.
    So these possible outcomes could create immense uncertainty for
    companies in every sector of the economy who rely on open and
    unencumbered connectivity as a key enabler for their business.
        Ultimately, if the repeal of net neutrality is implemented,
    it will have a crippling effect on rural economies, further
    limiting investment in rural infrastructure and restricting
    access to the internet for rural businesses, at a point in time
    when we feel we need to expand and speed this access instead.
        So I urge you to consider these impacts on the repeal of
    net neutrality rules and focus on advancing policies that
    foster fair competition.
        [The prepared statement of Ms. Drake follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Shaheen. Thank you, Lisa.
        Josh.

         STATEMENT OF JOSHUA CYR, DIRECTOR OF ACCELERATION AND
                 EDUCATION, ALPHA LOFT, PORTSMOUTH, NH

        Mr. Cyr. Thank you, Senator. I really appreciate everyone's
    comments so far. I just want to point out that there are so
    many familiar faces in the audience here who are helping
    businesses in New Hampshire, and I really appreciate everything
    you've done and that you're here today and listening to this as
    well.
        I've worked with many startups throughout the State of New
    Hampshire over the past several years, and there's a unique
    aspect of a startup that makes them their own type of small
    business. Startups, by definition, are attempting a new
    business with many unknowns in their model.
        I have to remove my glasses so I can read here.
        Senator Shaheen. We sympathize.
        Mr. Cyr. It's a new thing for me.
        So startups, by default, startups have to do something
    that's new, that's not a traditional business model. So they're
    going to change their model, their product, or their approach.
    Startups create opportunities through innovation. That
    innovation lies either in new spin on an old business model or
    on innovative products themselves.
        Startups also have high growth potential. They don't
    typically focus on a small geographic area, at least not at the
    start. Ultimately, this means that competition is not their
    local businesses but large businesses with broad interests.
    Almost always, this competition has a substantially larger
    financial resource. The repeal of net neutrality protections
    enables a small handful of very powerful internet providers
    tremendous control over what is delivered to consumers' homes
    and the speed at which it's delivered. Without net neutrality,
    the power and control these internet providers have will allow
    them to create artificial market barriers. These barriers
    stifle innovation and competition and serve to only protect
    powerful incumbents and extract higher fees from consumers.
        Startups may find the price to be paid for preferred access
    to be too great at their earliest and most vulnerable stages,
    yet many will feel that they have no choice as slow website
    speeds will hurt their bottom line.
        So study after study has shown that user balance rate,
    which is the percentage of people who leave a site immediately,
    rises tremendously--we've heard some stats on that, so I'm
    going to skip what I had written here and just come to the
    short part of this, which is that page speed is so important
    that Google factors it into their search rankings. While search
    rankings will not be impacted by speed shifting of internet
    service providers, the intent of the ranking focused on page
    speed still remains. Speed has an immediate impact on user
    engagement.
        Now, some may suggest that if consumers felt strongly about
    the issues of net neutrality, they could simply vote with their
    dollars, picking a provider in line with their needs. That
    would presume consumers fully understood the detail of internet
    plans, and even if consumers did, a responsive market would
    require a healthy marketplace of options. Many U.S. consumers
    do not have a choice in their high-speed broadband. Those that
    do often find themselves in long-term contracts, limiting their
    options. The FCC's own Internet Access Services Report this
    February of 2018 showed that in many areas there's no high-
    speed broadband at all. However, in areas with broadband speeds
    of 25 megabits per second or higher, between 30 and 40 percent
    of homes have only one option for a provider, and that's true
    of the State I grew up in, Idaho, but also true of my home
    State now, New Hampshire.
        Consumers have little to no choice for their provider,
    which means the market isn't being driven by consumer net
    neutrality concerns. Consumers need high-speed internet access
    even if the provider isn't providing the kind of service the
    consumers want.
        In summary, any net neutrality protections will be
    detrimental to a healthy competition for small businesses,
    including startups. Thank you.
        [The prepared statement of Mr. Cyr follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Shaheen. Well, thank you all very much. You've
    obviously given us a lot to think about, and I'd like to now
    explore a little bit in further detail some of the issues that
    you've raised.
        I want to start with you, MJ, because one of the things you
    said, and I hadn't heard this before, is that you think it's
    not enough for us just to repeal what the FCC did, that you
    think we really need bipartisan legislation that puts in place
    net neutrality rules. So what should those include, and why do
    you think that's so important? And I'm going to ask everybody
    to jump in on that.
        Mr. Shoer. Well, to the importance, it's simply that it
    shouldn't be at the whim of who's in the White House, and
    that's not a slam on the current Administration.
        Senator Shaheen. Sure.
        Mr. Shoer. But we're in this cycle now, this unfortunately
    sustained cycle that every time the party in the White House
    turns, various legislation is rolled back and put back in
    place, oftentimes even without any modification. So the only
    way to hedge that is with permanent legislation.
        I also think, just because I consider myself a lost soul in
    our political system, if you will--when I was here on campus I
    was a die-hard Reagan Republican, conservative as could be.
    Then I had kids. Then I matured a little bit and I became an
    independent because while I am socially very liberal, I am
    fiscally and in foreign policy very conservative. There's no
    home for me in our political system today. There needs to be,
    and the only way we're going to get there is if we can find
    anything that Congress can come together on across aisles and
    pass.
        While I recognize that this really has some true partisan
    division, that the Republicans by and large favor the repeal,
    the Democrats by and large favor retaining the rules, if we
    really step back and look at the engine of our economy, we all
    know it's small business, and we have got to protect it. We
    have seen innovation like we have never seen in our human
    existence since the internet came to be in its current form,
    and anything that changes that free and open access and limits
    the competitive opportunities for that access will damage our
    economy. There's no question about it. There are so many
    studies.
        So that's really why. I mean, I think it rises to the level
    of warranting that kind of legislation. Quite frankly, we're
    not here to talk about data privacy, but data privacy
    regulations are the same thing. We've got every State in the
    Nation creating their own regulations, and if we want to kill
    small business and entrepreneurship, let's let every State
    create their own regulation, and then let's go and explain to
    every small business that those businesses in multiple states
    have to comply with each State's set of laws. It's not a
    sustainable model for growth.
        Senator Shaheen. Can I ask if others want to jump in on
    this?
        Ms. Pearson. Sure. I would like to add that the best-case
    scenario would be not only bipartisan legislation but a diverse
    group of bipartisan legislation so that we have the voices and
    perspectives of women business owners, minority business
    owners, and other underserved, because unless you have the
    perspective and the experience, the life experience and the
    understanding of the barriers that each demographic, each
    constituency creates, you're only going to have legislation
    from one point of view, and one size does not fit all.
        Senator Shaheen. Anyone else?
        Ms. Drake. I would just add support for legislation to
    create consistency for businesses in policy and the stability
    that's needed for businesses to make decisions to determine
    investments, in which communities they're going to settle in,
    and knowing what resources they're going to have, including
    internet as a tool.
        Mr. Shoer. I think that's a great point, Lisa, because I
    know the folks I've talked to with CompTIA have said the
    biggest concern that they're hearing across the membership is
    consistency, a consistent message so that they can plan,
    because it's very difficult, even for the large companies,
    ironically. You know, we're talking about the small businesses,
    but even for the large companies out there, it's very difficult
    for them to plan for uncertain futures.
        Senator Shaheen. Right. Uncertainty, whether it's around
    the internet or budgets or whatever it is, is a real problem
    for business in general, and particularly for small businesses
    that have less ability to weather ups and downs.
        Anything else anybody wants to address with respect to what
    ought to be in a piece of legislation around net neutrality?
        [No response.]
        Let me then go to another issue that came up, and that is
    the need to optimize websites and reduce load times for
    customers. Zach, you talked about the importance of this. Can
    you talk about why this is such an issue for small business?
        Mr. Luse. Yes, definitely. It's a big issue because,
    frankly, slow websites are less effective, and if you slow some
    down, there's nothing those people can do, aside from paying
    the providers to be in a fast lane, to make it faster beyond a
    certain point.
        Senator Shaheen. Talk, if you would--I think everybody here
    knows what we mean when we say pay-to-play and fast lanes
    versus slow lanes, but can you explain that a little more for
    people who may not be familiar with this conversation?
        Mr. Luse. Yes. Fast lanes would allow players who have deep
    pockets to go purchase faster speeds. Their websites and their
    content are delivered to consumers faster, whereas the
    businesses that are particularly startups and small businesses
    may not have the ability to do that, especially startups who
    are just scraping together the funds to make their ideas
    happen. So it puts them at a severe disadvantage, and it also
    allows those big players to block competition and stifle
    competition, which is detrimental to our economy because so
    many of those great ideas and innovations come out of small
    businesses and startups.
        Senator Shaheen. I'm always impressed with the fact that
    small businesses have 16 times more patents per employee than
    large businesses, which is an eye-opener, I think, for most
    people.
        Josh, talk about what--I mean, you and Nancy, and you too,
    because you work with a lot of startups, are in a position to
    be able to see what they could sustain in terms of increased
    costs. So if net neutrality means an increased cost for access
    to the internet, is there a percentage or a level at which you
    think you then begin to price small businesses out of their
    ability to continue to have access to the internet?
        Mr. Cyr. It's a great question, and I think it would
    probably really vary given the business. Let's say for a
    startup, but I think the same would be true for any business,
    if I'm having to pay--if we step back a second and think about
    what Zach was saying about the fast lanes, all the traffic is
    going through the internet service provider to the consumer
    through the same pipe, right? There's not technically a
    separate lane. But we know that the traffic from this website
    is somebody that pays us so we can go faster than the others
    that are going through the same pipe, so it gets channeled.
        So if I'm a startup and I want to make sure I have really
    good performance because people bounce off my website if I
    don't have really good performance, I have to divert some sort
    of money to that. Well, for every dollar I'm diverting to pay
    for consumers to have a better experience on the exact same
    thing that everybody else is using, that's one less dollar I
    can spend for digital marketers to help provide really great
    in-bound marketing services for me, or to hire a software
    developer to finally build or modify my minimum viable product,
    or to pay for advertising, or anything else, right?
        The two most valuable resources that a startup founder has,
    a small business owner has, is their time and their money, and
    anything we're diverting that isn't adding value back and
    creating better value for consumers is a waste. It's a wasted
    resource. Right now, we know what those are. We have a level
    playing field and we know exactly how to plan for the future.
    If I don't know what I'm going to have to spend, and I don't
    know what to even tell startups what they're going to have to
    plan and budget because we just don't know, that's a really
    scary place.
        So I guess the answer is that every single dollar that's
    spent could have been put in a better place which could have
    gotten them further along. If a startup I'm working with runs
    out of money before they can build a new and viable product or
    they can find the love with the customer, the product market
    fit, they're not in business anymore, right?
        And it's not simply a matter of a few hundred dollars a
    month or a thousand dollars a month or whatever that is. That's
    sort of making it about the money, and it's really about can I
    survive long enough to get to a place where everybody wants to
    buy what I have to sell, and then once I get there, do I have
    enough money to actually get it into consumers' hands and
    funnel the growth. We can talk about growth and investment and
    all that stuff later on, but it's not a simple formula. It's
    really complicated and scary.
        Senator Shaheen. Robert, and then Zach.
        Mr. Zakon. Sure. So, I'll pick up on the theme that you
    heard a little bit there, uncertainty. That's a huge concern
    for small businesses, something that I keep hearing over and
    over again. Just a few weeks ago, touring a harness
    manufacturer up in the Mt. Washington Valley----
        Senator Shaheen. Harmon? Harness?
        Mr. Zakon. Harness. They make leashes, those kinds of
    products, and one of the big concerns for them is now having
    more than half their sales online. But the other one is things
    like sales tax, as well, and the concern about what can happen
    there. So even though we're being told that if it goes away and
    we no longer have a neutral internet, it does not necessarily
    mean the next day that you're going to be charged that much
    more. But it's the uncertainty that down the road it might
    happen. As my colleagues mentioned, that could mean the
    investment that could have been going somewhere else, or
    perhaps a funder, as I mentioned in my intro, wouldn't be
    willing to invest in your company because there's too much
    uncertainty of whether you will really be in a position to
    offer your service if someone comes in and charges much more
    for them.
        Senator Shaheen. Zach.
        Mr. Luse. I would just add to that. That issue is
    compounded by taking money away from whatever their core
    business is because the marketing and advertising dollars are
    going to be less effective because less of those people are
    going to convert. Google's advertising platform actually
    charges you more if you have a slow landing page. So you pay
    more for the ads than your competitors with a faster website,
    and then less of those people turn into customers. So it really
    snowballs.
        Senator Shaheen. It's a double whammy.
        Mr. Luse. Yes.
        Ms. Pearson. Some of the clients that we see are even
    before this stage. They're operating their businesses using
    already-existing platforms like Sea, like Facebook, like
    Instagram, with the hopes that they can invest to the point
    where they get to their own website and their own internet
    sales. What I see as a great concern is that they will never
    get there. That's just a whole class of businesses that are not
    going to be able to work their way up into even the small
    business community.
        Senator Shaheen. Robert, you talked about how you have seen
    work impeded, and you've seen that in some other countries
    because of the way the internet operates in other countries.
    Did I understand that correctly? And can you give us some
    examples of what you've seen?
        Mr. Zakon. Sure. So, our software initiative and
    application, it integrates with software and services from
    other companies. At times, these services that we utilize as
    part of our software have been blocked in certain locations, in
    some other countries around the world. When this happens, it
    appears to be an issue of our software, so the client will
    contact us. This can be pretty burdensome from an impact
    standpoint in terms of tracking down the issue, providing
    support, trying to develop workarounds, if that's even possible
    when we're dealing with another nation altogether.
        I expect if a U.S. internet provider ends up blocking or
    throttling a service that we integrate with, or even our own,
    the effect is going to be truly burdensome for us and for our
    clients as well, even more so when you consider the number of
    providers that we're really talking about here. I'm certain
    that some large companies will evolve to offer a service to
    bypass some of this, but that would likely mean us not being as
    agile, as lean in the services that we're currently really able
    to engineer for ourselves.
        I realize that Nancy is talking about a different type of
    small business. Our business, we understand the technology. We
    can often kind of work around it. But again, with my score hat
    on, and I do not speak for the organization, only for myself as
    a counselor, I've seen too many businesses that can't even get
    started with what's out there. When you talk about looking at
    what are the terms of service, they have no way of even
    comparing things like that. So it very much becomes an impact,
    and when we look at it globally or internationally, it's a non-
    starter.
        Senator Shaheen. We had a small roundtable with a number of
    businesses at Alpha Loft earlier this year, and we had this
    whole conversation about the workaround because there were a
    couple of people who said, well, if this happens, technology
    will help us develop a workaround so we can avoid it. And we
    had this conversation that lasted probably 20 to 30 minutes
    about this whole issue, and at the end of it one of the
    participants said look how much time we've been spending just
    talking about this. Imagine if it happened how much time it
    would take businesses to focus on this, to deal with it, and
    the time it would take away from other things that they need to
    do. So it's really not an option at this point, and it doesn't
    make sense for us to do that.
        Mr. Zakon. It certainly hits the bottom line.
        Senator Shaheen. Absolutely.
        So, several of you have talked about the challenges that
    startups have with getting funding. I know it's a particular
    concern for women-owned businesses, Nancy, but it's obviously a
    concern for most startups. Can you elaborate on the impact on
    startups with a repeal of net neutrality, what that would mean
    for things like crowd funding and access to other investors who
    might be interested in a startup?
        Mr. Cyr. I'll go ahead, if you don't mind.
        If you think about what investors are looking for, at the
    very early stages they're investing in the team. They believe
    the team has an excellent idea and they're going to be able to
    make it, and they're going to use the resources they're given,
    this investment, in a reasonable fashion to be able to get
    there.
        They're also, through all their due diligence and research,
    seeking to reduce risk wherever they can. That's why they do
    the due diligence. It would be the same for anybody giving out
    money, really. So if you see a really compelling team and an
    awesome startup and a great idea, and then realize it's going
    to be enormously expensive just to pay-to-play to be able to
    compete because of whatever constraints are put onto the
    network, more barriers, is that a good use of those resources?
        The reality is for a typical investor, it's not like they
    only hear a dozen good ideas a year. A lot of ECs will receive
    100 solicitations a day. They're evaluating hundreds of
    thousands over the course of a year. So they're making good
    decisions, and if they're seeing possible barriers, possible
    issues, they have all these other good ideas. So it's just
    knocking good ideas right from the start.
        I think we don't want to see resources put to use simply to
    pay fees when we could see those put to use to see growth or
    build product. Those are the two things that any business has
    to do at the very beginning stages, small businesses, and
    specifically for startups. You're either building something or
    you're selling something, and a lot of the other stuff that you
    do around that is supporting that. If you're not doing those
    two things or something that supports those two things, you're
    probably putting resources at the wrong time. So you want to
    make sure that money is put to those two things.
        Senator Shaheen. Anybody else?
        Ms. Pearson. Well, for us, the majority of our clients are
    not really good candidates for that kind of startup funding
    opportunity. But I will say that we spend a lot of time with
    our clients exploring all the possible revenue streams and
    sales channels. So if you take a whole channel away because of
    the unknowns, that is a huge concern for the potential
    viability of their business. So again, it's the unknown and the
    barrier to entry.
        Senator Shaheen. I think platforms like Ebay and Etsy have
    really made a difference and provided opportunities. I have a
    staff here that says 87 percent of Etsy sellers are female, and
    we heard from one Etsy seller in New Hampshire, Gail Kimble,
    who is from New Hampshire Bowl and Board. Some of you may be
    familiar with that. They're in Webster. And she wrote--and I
    think her quote is worth repeating here. She said, ``The e-
    commerce world is super competitive, and the big guys have all
    the advantages.'' You've all alluded to that in some way. ``Net
    neutrality at least keeps the door open. Without net
    neutrality, I'm quite sure my margin will shrink to the place
    where I'll have no choice but to close up and give up.'' So it
    really shows the impact on small business owners who are
    looking at what will happen if we repeal net neutrality.
        Lisa, one of the things, again, that people have referred
    to--and we've got people here from all over the State--Keene,
    Londonderry, North Conway, Nashua. But you talked about the
    real impact for your rural providers for Stonyfield, and with
    the exception of the cows, can you talk a little more about
    what this means for rural entrepreneurs who really are often in
    places in New Hampshire where they don't have access to good
    internet, much less what it would mean if that access totally
    goes away and costs more?
        Ms. Drake. These are small family owned operations that we
    work with. You may think of dairy farming as low tech. It's
    cows eating grass. But really, technology is influencing
    farming as much as it is many other areas of our economy. So
    technology is a tool that farmers are using more and more to
    manage their farm, to improve their operations, and to improve
    the economic aspects of their operation. They use it to monitor
    feed and monitor markets where they're buying feed. They're
    using robotic milkers. They have all kinds of technology around
    milk quality, and lots of communication needs with both vendors
    and customers.
        So all of this is an important means of functioning as a
    business, and to add on top of living in rural areas don't have
    necessarily consistently strong cell service either, so the
    internet really, truly is--reliable internet is a connection to
    the community. And just to go further on the technology front,
    we continue to work on developing better software and tools for
    farmers for data collection and monitoring and trending so that
    they really have more intelligence about the operation of their
    farm.
        Mr. Shoer. Senator, I can share a story about a customer in
    a rural part of the State. Their business is somewhat unique,
    but what often gets lost is you have to think about the supply
    chain of the business, which is somewhat what Lisa is talking
    about. But in this case, this business found that over a period
    of years all of their technical manuals, all of their resources
    all went online. This used to be a business that could order--I
    think back to when I was a kid and the World Book would show
    up. They used to have the bookshelf full of their technical
    resources. That's all online now, and they found themselves in
    a very difficult position because there was no competition for
    access, and their access was dreadfully slow, and it was
    significantly showing impact.
        Now, this business had to negotiate with a broadband
    provider and had to spend over six figures to get that provider
    to bring access to them, and it was a choice of spend it or
    close the doors.
        So back to the access piece of the equation, we have got to
    find a way to get the competitive geographies expanded because
    we've got businesses that are at significant disadvantage on a
    regional scale, national, and in some cases global.
        Senator Shaheen. Robert.
        Mr. Zakon. I'll continue with the rural theme here, just to
    give another view of it. It's been mentioned that oftentimes,
    especially up in the North Country, some of the rural counties
    in New Hampshire, there is no alternative. There is hopefully
    one high-speed provider that you can rely on. For a client we
    have who they pipe music and video from the internet into their
    waiting area, if they can't get internet for that, not
    critical. They still have radios around. They can turn it on.
    But another client in the medical profession sends blood work
    over the internet and instantaneously receives results on their
    mobile app. So if they don't have the ability to do that
    anymore because net neutrality is not in place, it becomes too
    cost prohibitive for them. There is no alternative service. The
    quality of care is going to suffer.
        So as we look into tele-medicine and all the other
    wonderful innovations that we have, and innovation has been a
    theme here, it's much less likely for us to be able to deal
    with that in a State like New Hampshire.
        Senator Shaheen. Absolutely, and I want to get back to the
    tele-medicine piece because it is so important in New
    Hampshire. But before I do that, I have a statistic here that
    the University of New Hampshire has done. They have a report on
    the state of broadband in New Hampshire from 2015, and they
    asked New Hampshire residents about their limited provider
    options. When asked why they're using their current provider,
    39 percent said it's the only option available to them. So,
    think about that. Almost 40 percent of the State says we have
    no other choice, and that doesn't count the people who don't
    have a choice, who don't have a provider at all. There are some
    parts of New Hampshire that don't really have a provider at all
    unless it's dialup or so slow that it's really hard to use.
        But I want to go back to the tele-medicine because that's a
    really important issue that you raised. For, again, so much of
    the State, because we're rural, it's the one way we have access
    to different specialties and to information and expertise and
    physicians that we wouldn't have otherwise.
        I had a chance to visit the VA clinic up in Littleton, and
    what they're doing, they're using tele-medicine to bring in
    psychiatrists and psychologists for counseling there because
    they can't afford it otherwise. But if they can do it through
    their tele-health, they're able to make it available to all of
    the veterans who come in. So, as you say, this would have real
    implications for being able to do that in parts of New
    Hampshire because if it costs more, what does that mean for the
    physicians? They're either going to have to charge their
    patients more or they're not going to be able to afford it.
        So, do you want to elaborate on that a little more?
        Mr. Zakon. Sure. I'll actually give the example that I keep
    hearing, which is more from the opposite side of the argument,
    which is, well, if we do away with net neutrality, the large
    internet providers can now offer that high-speed route so that
    you can have those kinds of services. Unfortunately, I don't
    think that really pans out, because if I'm going to provide a
    remote surgery, for example, I'm going to want a dedicated
    circuit to be able to do that. I am not simply going to want
    that network traffic going through the public internet overall
    without some major paring agreements in there.
        Just yesterday, there was a router outage in the internet
    backbone. I think it was in Florida. And we got calls from
    clients who couldn't access one of our data centers there. It
    was not life and death, but again, that's where it really comes
    in. So I think the whole remote surgery, tele-medicine, all of
    that becomes a critical service, and I think necessarily it
    means that it really should not just be a part of the standard
    internet as we generally know it. You're looking more at
    internet 2 capabilities that are out there.
        Mr. Shoer. I think the other elephant in the room around
    tele-health is that we've seen the consolidation going on in
    the health care system and how few private practices are still
    able to survive with hospital systems or insurance systems
    buying up practices. So imagine a world without net neutrality
    where either an insurer or a hospital system that has
    significant cash resources can make deals with ISPs to
    prioritize their preferred end tele-health provider. It could
    significantly change that entire industry.
        Right now, that is somewhat of an upstart level playing
    field industry. We have clients that are using remote
    radiologists that are in the United States, as well as all
    around the world. For various reasons, that could go away or it
    could change dramatically, and it could absolutely impact
    quality of care.
        Mr. Zakon. And an example from another industry, if all of
    a sudden the electrical industry decides to say, you know,
    we're going to start charging more to one brand of computer or
    appliance going to the wall and the plug behind me here to get
    your electrical service, I don't think we generally stand for
    that. But that is, in large part, what we're talking about
    here. It's limiting the choice. I may now no longer be able to
    use one appliance brand but now have to use another one.
        Or going back to when we had multiple phone services, and
    I'm going back many, many years, before my time, I think----
        Senator Shaheen. Some of us remember that.
        [Laughter.]
        Mr. Zakon [continuing]. Where you may have had multiple
    telephones depending on who you wanted to talk to. So it's
    between the party line and where we are today.
        Senator Shaheen. We heard from an occupational therapist
    named Rachel who is in Litchfield, and she wrote to us about
    her concerns. She said, ``Ending net neutrality will cut off
    resources from individuals who can't afford to pay extra for
    internet services. It will be harder for these people to
    communicate with others and receive information they
    desperately need about their health. Additionally, ending net
    neutrality will make it harder for my clients to access
    resources that help them to cope with PTSD, depression, and
    other challenges.'' You all have said it very well.
        So, the one topic that we haven't yet covered is around the
    argument that we should repeal net neutrality rules and let the
    Federal Trade Commission do the actual enforcement. So when
    there's a problem, small businesses can go through the FTC and
    they can have their concerns addressed. Do you all think that's
    realistic?
        Zach.
        Mr. Luse. My understanding is it's a terrible idea, because
    the FTC is just going to be enforcing when somebody files a
    complaint. They're not going to be out there policing. And the
    process, from what I understand, is pretty tedious. Maybe small
    business associations might be able to handle that, but a small
    business isn't going to have time to really do that.
        Mr. Shoer. It's a reactive stance.
        Ms. Drake. I would agree. Our farmers need to stay on the
    farm and focus on farming and not submitting complaints about
    their internet service. It's really too much to ask of the
    small business owner.
        Mr. Shoer. It's shifting the burden in the wrong place, and
    there are other laws on the books in states where they've
    relied on FTC practice and precedence, and those laws have not
    played out well because of that.
        Senator Shaheen. Absolutely.
        Anything else, as we're getting close to wrapping up here?
    Are there any other points that folks wanted to make that
    haven't been made yet?
        Nancy.
        Ms. Pearson. I actually want to add to the health care
    conversation. I just tallied up some clients that I'm currently
    working with right now, in 2018. One is a physical therapist
    who delivers pain management services online. I have two
    nutritionists that deliver their services online. I have a
    personal trainer, and I have a fertility coach. All of them are
    working through tele-conferencing with their clients across
    northern New England. The physical therapist who deals with
    pain management has found a niche in addiction recovery.
        So these are real implications that we're talking about,
    because if people don't have access to these services that
    their insurance won't necessarily pay for but it's cost
    effective, it just has real-life consequences to more than just
    small business but the quality of life for people and some
    major, major issues going on in the State.
        Senator Shaheen. Yes, it does, and we also don't really
    know what all those implications are, as many of you have said.
    We've asked the GAO to do a study on what the potential impact
    is going to be on small businesses. Of course, we don't have
    that report yet, but just among the concerns that you all have
    raised, you can see the potential impact on small businesses
    and the ripple effect that has through the economy as we're
    thinking about job creation and development of new technologies
    and innovation.
        One of the things that we haven't talked about because
    we've been focused on small businesses, but I think it's
    important to think about as we look at the workforce challenges
    that we have in New Hampshire right now. Everywhere I've been
    in the last two years, the number-one issue has been workforce.
        What does it mean for young people and for workers if net
    neutrality changes and they aren't able to get information,
    Josh?
        Mr. Cyr. The way I see it is that states with more rural
    residents will probably suffer the most. I mean, if you think
    about I'm graduating from UNH and I'm looking to make my mark
    in the world, internet access is really going to be important
    to me. It's sort of foundational for how I grew up and what I
    expect. I start shopping around and I find that there's no
    broadband in certain areas, they're out. I'm not moving to the
    North Country. I'm not moving to all these other areas. I'm
    going to be moving to a place that has an internet service
    provider with a record I know and want. Maybe there's somebody
    who is voluntarily continuing with the net neutrality rules.
    That's probably in really competitive markets.
        So I think what we're going to see is new generations
    moving, primarily motivated because of reasons like that, to go
    to heavy competitive markets and skipping over the places that
    may not be able to offer those sorts of services if they find
    it's so important. And I think that we've heard time and time
    again that they do. So I think it's going to be specifically
    impactful for rural areas in a very negative way.
        Senator Shaheen. Zach, did you want to comment on that?
        Mr. Luse. Yes. I think for my business in particular, it
    will impact it heavily. It's already hard enough to attract and
    retain young workers in Keene. When they go home and they only
    have one option, if they have one option, of a provider, and
    you layer net neutrality on top of that where they might not be
    able to stream the content they want, it just compounds the
    issue.
        Senator Shaheen. Lisa, you wanted to say something.
        Ms. Drake. Yes. Just to take Josh's comments one step
    further, I think that what he is describing about young people
    making choices about where they're going to live, this is about
    the vitality of our rural communities. We're already seeing an
    exodus of young people from our rural areas, and it has a great
    impact on the vitality and the longevity of those communities
    and their health as a community. So I think if we don't want
    the exodus of all our young people to urban areas, this is
    something really important to consider.
        Senator Shaheen. Yes, absolutely.
        Mr. Shoer. I think there is also a significant risk to the
    diversification of our workforce. In the tech industry, we are
    very, very concerned about getting more women and disadvantaged
    minorities into that workforce because it's typically been
    coming out of those who can afford four-year college, but we've
    proven with any one of a number of initiatives that those other
    communities can more easily access the education to get them a
    foothold in to build a career. If net neutrality regulations
    are not in place, the large providers are going to start to get
    into the areas of the business that, quite frankly, they don't
    have any business getting into, and it could directly impact
    our ability to encourage young women, young minorities to get
    into technology fields.
        Even in our case, we've had a handful of employees over the
    last 18 months relocate for family reasons, and we've been able
    to retain them because, thank God, they've been able to get to
    an area where they had unfettered good broadband internet
    access. If that weren't the case, we would have lost some
    wonderful employees that we've actually been able to retain.
        Senator Shaheen. Robert.
        Mr. Zakon. And I would actually like to add another
    category of individuals to the list, and that is the disabled.
    Homebound individuals had startups before where we've had 20-
    plus homebound individuals that were doing meaningful work for
    us, for our company, in large part because there was an equal-
    access internet. They were able to come use the services that
    we have been using. There was no concern about, well, you're
    with a different provider, you can't use the service that we
    offer and therefore we cannot hire you. And that's really
    critical across the board.
        Senator Shaheen. That's a great point.
        Mr. Shoer. Very good point.
        Senator Shaheen. And, you know, the frustration for me is
    the responses to all of the points that all of you have made
    this morning have really been nonexistent. I mean, the biggest
    argument that I've heard for repealing net neutrality has been
    that, well, it will provide for more innovation. But, in fact,
    I think what we've heard from all of you is that you all think
    it would be less innovation. And the other implications for
    what we might be looking at are some unknown but certainly much
    more impactful than what we've heard from anybody at the FCC
    and for those who are proponents of this repeal.
        Robert.
        Mr. Zakon. Yes. For me it really comes down to there was a
    lot that internet providers could be doing already that they're
    not, that we are in the world we are today with regard to cyber
    security and privacy. That is something that they are empowered
    to take actions on. They are our tunnel to the internet. They
    can protect us, in large part, with regards to that. That is
    not something that I think, in large part, is done. The
    internet of things, we hear about how insecure they are. That
    is something that internet providers are in a position, in
    large part, to potentially help with. Yes, there are potential
    privacy issues and the like in there, but the leadership has
    not been there, and that will go a very long way with regard to
    saying, yes, there may be some leeway here. But as of right
    now, at least, I don't see it.
        Senator Shaheen. You mentioned the phone company and the
    changes when we deregulated the telephone industry, and the
    innovations that developed as a result of that. We're seeing
    that in the utility industry with the change in the way we
    provide electricity and utility service to folks.
        It seems to me that this goes in the wrong direction, that
    instead of opening things up to provide more innovation and
    more access, what we're talking about is closing things in a
    way that reduces access, reduces innovation, and that's not
    going to be good for anybody, I think, except the big players
    who have the potential to make money and really have a monopoly
    over what goes on.
        Well, thank you, everybody, again. Any final comments that
    someone wants to make that you haven't had a chance to?
        Mr. Luse. I would just reiterate that with repealing net
    neutrality, you're kind of changing the underlying fabric of
    the internet that's been there since the beginning, and there
    are probably so many implications that we can't even imagine.
    If you look at where we were 10 years ago and where we're
    going, we don't really even know how it could be detrimental to
    the future.
        Senator Shaheen. Well, again, thank you all very much.
    Special thanks to our panelists and for those of you who came.
    Many of you traveled long distances to get here, so we really
    appreciate that, your willingness to be here.
        I am looking forward to being able to take back what I've
    heard this morning and share that with my colleagues in
    Washington. I'm pleased that we'll have it as part of the
    record of the Small Business Committee and look forward to
    working to address both what the FCC has done and to think
    about how we can do bipartisan legislation that will really
    provide some certainty in the future.
        As I said, we have, I think, two weeks for additional
    questions and statements. So anyone in the audience who would
    like to weigh in, we have two weeks to do that, and you can get
    them--Chris, where should they send those?
        Mr. Neary. They can send them to Kathryn, or they can send
    them to me.
        Senator Shaheen. So you can send it to our office or to the
    committee. Both of those are available online, fittingly.
        [Laughter.]
        Yes, unrestricted, at least for the time being.
        [Laughter.]
        Thank you all for coming to join us in this conversation,
    and I look forward to seeing how things progress because I am,
    like all of you, very concerned about what the implications may
    be.
        Thanks very much. This hearing is now closed.
        [Applause.]
        [Whereupon, at 11:22 a.m., the hearing was adjourned.]

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