Are Current Government Policies Hurting SMBs?

A recent cover story by CRN interviewed small IT related businesses regarding President Obama’s 2009/2010 legislative activity/wins and the impact on their business. While I am sure the story was not attempting to accurately poll IT related SMBs, it was clear that most of those interviewed were not optimistic about the newly passed laws. The most discussed law was the Healthcare bill. Most of the SMBs see additional cost, potential taxes and very little improvement in the health insurance plans they provide for their employees. Moreover, there is the concern that too much effort went into the healthcare battle and not enough attention was paid to assisting the nation’s small entrepreneurs in recovering from lost revenues due to the recession. Prior to the recession there were over 250,000 IT related small businesses. Today, that number hovers around 200,000, a tremendous loss in talent and jobs for the technology industry.

I debated having this as the subject of the blog until I read this morning the FCC has been advised by so-called experts that SMBs need more competitive pricing for broadband access and services to meet the demands of a changing sales environment. Most of the anecdotal stories given during a hearing chaired by Senator Mary Landrieu revolved around the difficulties faced by businesses in rural areas. However, as you now know from last week’s blogs, most of the broadband issues that need to be addressed are outside of rural areas. In fact, I appreciated the beginning of a statement given by Jonathan Adelstein, administrator of the Agriculture Department’s Rural Utilities Service, noting, “approximately 181 applications requesting $2.9 billion from Agriculture’s Broadband Initiatives Program came from small businesses…” That was the economically important element of his statement. The rest was more political involving minority owned firms, Indian tribes and native Alaskan and native Hawaiian entities.

Additionally, I was not surprised to learn businesses with 25 or fewer employees pay two times more per employee for broadband than those with more than 25 employees. Most of the price differential is based upon the way broadband is sold, the bigger the pipe, the lower the cost per megabit. It may not be fair, but it is reality.

My key concern about the CRN article and the FCC discussion about broadband pricing is how does the Obama administration or FCC plan to address the concerns of SMBs? We do not need additional government meddling with regard to pricing and competition, and Broadvox and other ITSPs are leery of any more changes to regulating VoIP/SIP Trunking providers. At some point, continued changes will cause an inverse reaction by service providers in the marketplace. Even now, there is some marketplace overhang in place as we wait for the FCC to determine if VoIP should be subject to similar rules accorded TDM.

So, has the Obama Administration been good for SMBs? No, but we do have two plus years to go.

See you on Friday…