[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



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        Available via the World Wide Web: http://www.govinfo.gov
        
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	         U.S. GOVERNMENT PUBLISHING OFFICE 
			 
	30-631 PDF                WASHINGTON : 2018                 
	       
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED FIFTEENTH CONGRESS

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                    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

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                           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:]

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    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:]


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    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:]


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    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:]


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    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:]

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    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:]


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    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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