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Etsy sees hope for small retailers in fight over internet fast lanes

It was something of a surprise when Etsy, a website for the artisanal crowd, decided this summer to wade into a battle over a proposed plan by the FCC to end so-called net neutrality rules for the internet. After all, why would a site known for homespun items — like this “Chubby Hedgehog Catnip Toy” — want to take part in a political slugfest between gigantic cable and media companies?

The answer, according to Etsy’s Public Policy Director Althea Erickson, is that the FCC’s proposal to allow internet companies to charge for “fast lanes” would affect not just video sites like [company]Netflix[/company] and Twitch, but ordinary retail sites too.

“Research shows a delay of milliseconds leads to loss of sales, and customers not coming back. A slow loading page puts sellers at a disadvantage. We’re really worried about the world of paid prioritization,” Erickson said in a phone interview on Thursday.

The FCC’s plan, in other words, may bring a future in which the [company]Amazons[/company] of the world pay ISPs like [company]Comcast[/company] to ensure their pages load faster than smaller sites, and where [company]Google[/company] offers only its ad partners an express ride on its Fiber network.

I asked Erickson for details on the “milliseconds” claim, and she pointed me to earlier research by Akamai and O’Reilly that shows direct correlations between web page speed and success in the ecommerce market. The research did not refer to milliseconds, but it does give credence to Etsy’s concerns — which have also been voiced by crowd-fund site [company]Kickstarter[/company] — that small retailers could be collateral damage in the fight over fast lanes.

Erickson added that [company]Etsy[/company] may introduce videos to help its sellers, who are predominantly female micro-entrepreneurs, tell the stories of their products, but that the plan will be less viable if Etsy has to pay for a fast lane.

Tide turning?

Etsy, Netflix and a handful of other companies have urged the FCC to shelve its plans for fast lanes and to reintroduce a strict net neutrality policy. But Washington insiders have suggested the agency is unlikely to take such action due to the opposition of powerful broadband providers like Verizon and Comcast, and the decision of tech heavyweights like Google to sit out the debate.

Erickson, however, says she is not discouraged.

“We see it differently. The Comcasts of the world have spent a lot on lobbying money, but 1.5 million people outside the beltway have weighed in too,” she said.

Erickson also pointed to recent comments by FCC Chairman Tom Wheeler and President Obama that suggested the agency is thinking of invoking its Title II power in order to reclassify the ISPs as so-called common carriers. According to a major court ruling earlier this year, the Title II option is the only way that the FCC can force the ISP’s not to favor certain websites over others.

“The debate has shifted,” said Erickson, adding that Etsy’s position has gained more momentum through the support of influential Senators like Chuck Schumer (D.-NY). The fast lane proposal is also raising questions over whether government websites would suffer.

The next big phase for the net neutrality debate comes on September 15, when the reply period for comments on the FCC’s fast lane plan will close, and the agency will have to decide what it will do next.

One Response to “Etsy sees hope for small retailers in fight over internet fast lanes”

  1. Jeneba Jalloh Ghatt

    Ok. There seems to be some purposeful misinformation about Title II and how detrimental it would be for the government to weigh down the free and open internet by imposing archaic rules created for the ma bell era on the very robust and currently working Internet we have today.

    This article is very disappointing to me because it appears that the Etsy founders are unaware of the real life affect additional regulatory application would have on investors on web-based entrepreneurs like myself who are currently getting signals from VCs that they are wary of backing web-based companies bc of regulatory uncertainty in this area.

    Also, with this talk of Amazon and paying for fast lane, there seems to be a fundamental misunderstanding that currently, companies like Amazon and the like already use content delivery networks to get their customers orders processed quickly without worrying about latency and challenges during high peak times like after work.

    Despite the fact that some people currently are paying for a type of “fast lane” already, yet the Etsy’s of the world are still operating and doing fine should tell us all the risk of switching to Title II and disrupting a good thing are not worth it.

    This is so frustrating and disheartening. oy vey! *sigh*