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Summary:

During a Twitter discussion about the recent court decision striking down net neutrality, entrepreneur-turned-VC Marc Andreessen talked about the need for massive investment in new network technologies and how to balance that with his desire for an open internet.

marc-andreessen
photo: All Things D

Ever since he returned to Twitter in January, after not posting anything on the network for almost three years, legendary entrepreneur-turned-venture-capitalist Marc Andreessen has been tweeting up a storm, discussing a range of tech and social issues with almost anyone. On Tuesday, a message from Om to Andreessen — and other venture investors such as Fred Wilson, John Doerr and Paul Graham — touched off a fascinating discussion about net neutrality, the need for continued innovation on the internet, and the best way to ensure that it happens (there’s also a Storify of this discussion available).

Although he joked about how Om should stick to his own causes and allow Andreessen to do the same, the former Netscape founder responded quickly that while unfettered innovation for startups is an important goal, the net neutrality debate “is a more complex topic than single flash-cut YES or NO in my view.” He added that there were too many similar simplifications of complex topics going around for his taste, including “NSA is evil: YES or NO.”

The bottom line, the Andreessen Horowitz founder said, is that he would like to see the network remain open to all but also wants to see massive investment in new technologies, and the challenge is how to make both of those things happen at the same time:

The assumption behind his comments, Andreessen said, is that “the U.S. will need massive investment in existing and new networks for decades to come” and that the status quo will not be sufficient to support all the applications and services that society requires. The problem, he added, is that if carriers like Verizon are spending $20 billion or so on their networks every year, they need a certain return on that investment in order to continue doing so.

When someone suggested that encouraging carriers to spend would merely require “changing the method of profit, such that discriminating by content provider is no longer necessary,” Andreessen responded that the problem with that approach is deciding “who determines method of profit, customers or government regulators?” When the CEO of startup Seequ said that the FCC should simply redefine ISPs as “common carriers” like the phone companies, Andreesseen replied:

When another commenter suggested that relying on government regulation to do the job isn’t such a stretch, Andreessen said it was for him because whenever government undertakes such a complex assignment it results in “perverse incentives + regulatory capture + lack of market discipline + unanticipated consequences.” He added while he admires the people working on the problem in D.C., he thinks that “even they would admit current regulatory regime ill-suited” and that the creation of new regulatory regimes is “fraught with peril.”

As the discussion progressed, Andreessen started to get at the meat of why he believes massive network investment is required for the future: namely, that much faster speeds and connectivity are needed to support virtual presence and other technologies — and the massive amounts of data and analytics involved — that will allow us to live and work effectively without having to drive and fly everywhere all the time, which he called a “moral imperative.”

On a less futuristic note, Fred Wilson of Union Square responded to Om’s question by writing a blog post in which he described the bleak future for internet-based startups if net neutrality isn’t preserved. As he put it, “Internet 3.0″ would mean that “telcos will pick their preferred partners, subsidize the data costs for those apps, and make it much harder for new entrants to compete with the incumbents,” leading to potential responses from VCs like this one:

Entrepreneur: I plan to launch a photo sharing service where the faster your friends like the photos, the faster they disappear. It’s gamified social snapchat.

VC: Well since Facebook, Instagram, Twitter, and Snapchat have paid the telcos so the photos that are served up in their apps don’t use up any of the data plan, I worry that users won’t want to use any other photo sharing services… We love your idea and would have funded it right here in the meeting back in the good old days of the open internet, but we can’t do that anymore.

Post and thumbnail image of Marc Andreessen courtesy of All Things Digital

  1. You do know that Andreessen invested in companies that are killing net neutrality? This site reported on at least one such investment so he has an agenda.(and no shame )

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    1. Thanks. Can you be a bit more specific about who he invested in and how they are “killing net neutrality”?

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  2. GREAT PERSPECTIVE BY ANDREESSEN ON NET NEUTRALITY

    It’s great to see that at least one prominent Silicon Valley VC sees BOTH sides to the net neutrality debate. I like how he says that it is a “complex” issue which therefore cannot have any easy yes-no answers. I also agree with his points on possible consequences of government intervention – perverse incentives, regulatory capture, lack of market discipline, unintended consequences – I REALLY REALLY wish more of Silicon Valley’s luminaries (or, those who think they are luminaries or wanna be luminaries :) ) understood this point about government intervention/control. I understand that even this issue of gov regulation itself is a complex one. Kudos to Andreessen for his ability to at least try to point out that the answers to the courts shutting down net neutrality are not simple.

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  3. Entrepreneur: I plan to launch a photo sharing service where the faster your friends like the photos, the faster they disappear. It’s gamified social snapchat.
    VC: Well since Facebook, Instagram, Twitter, and Snapchat have paid the telcos so the photos that are served up in their apps don’t use up any of the data plan, I worry that users won’t want to use any other photo sharing services… We love your idea and would have funded it right here in the meeting back in the good old days of the open internet, but we can’t do that anymore.

    OR

    Entrepreneur: I plan to launch a new real time communications service for businesses. It will feature service level guarantees so that, unlike services such as Viber, there will be no dropped calls, no garbled voice streams, and there will be high definition fluid video communications.
    VC: Well since offering a higher quality communications service requires a higher quality connection and technical capabilities to ensure your service is delivered with the efficiency that it requires, which is illegal, your idea just isn’t possible on the Internet where all traffic is forced into a least common denominator level of service. It’s against the law to pay for better service if you want it, and we don’t fund ideas that fall outside the boundaries of the law.

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