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Entrepreneurs embrace net neutrality plan (except Mark Cuban)

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Propaganda machines are running full-blast ahead of next week’s landmark vote on net neutrality, so readers should take most “news” about the FCC with a grain of salt. That said, it’s worth noting a new letter in the debate over whether net neutrality will protect entrepreneurs (as supporters claim) or if it will instead damn small business to crushing regulations, as Republican Commissioner Ajit Pai, backed by the telecom industry, is warning.

The letter comes via the advocacy group Engine, and is signed by more than 100 startups and emerging businesses. Many of the names are unfamiliar but some — including Yelp, Etsy, Kickstarter, Tumblr and GitHub – are among America’s favorite new companies.

Their position, in short, is that the FCC’s proposed “Title II” rules, which would forbid ISPs from giving special treatment to some websites over others, is not the regulatory bugbear of Pai’s imagination:

“Any claim that a net neutrality plan based in Title II would somehow burden “small, independent businesses and entrepreneurs with heavy-handed regulations that will push them out of the market” is simply not true,” the letter said. It added, “The threat of ISPs abusing their gatekeeper power to impose tolls and discriminate against competitive companies is the real threat to our future.”

This, of course, is part of a public relations effort but it doesn’t change the fact that all these companies, which are run by sophisticated and successful entrepreneurs, put their names on it.

The entrepreneurs could be lying or maybe they’re deluded. The better bet, though, is that the they genuinely favor rules to prevent the likes of Comcast or Verizon using their power over pipes as a cudgel to demand money or favors.

So are there any bonafide entrepreneurs (as opposed to Pai and the telecom giants) concerned about the regulatory burden of Title II? Well, there’s at least one.

On Wednesday, Dallas Mavericks owner and startup booster Mark Cuban was at it again, railing at a Re/code conference how the FCC will “fuck up everything” with its new rules. (He’s made such rants before).

Normally, it’s worth paying attention to Cuban since he’s bang-on about other issues involving small business, especially patent reform, and has a lot of pull in investment circles.

On this one, though, his concern may be overblown since the FCC has been clear that it’s taking a light touch to Title II and will be using it to prevent internet throttling, while also staying clear of measures like rate regulation or forced access. (One also wonders if Cuban’s F-bombs have anything to do with the fact that he is the chairman of a cable network).

So there you have it. You entrepreneurs out there can join Etsy and all, and run the risk of FCC regulations, or throw your lot in with Cuban and put yourselves at the mercy of the big ISPs.

Here’s the Engine letter, which is short, and has all the companies’ names:

Engine Letter Re FCC

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6 Responses to “Entrepreneurs embrace net neutrality plan (except Mark Cuban)”

  1. “Propaganda machines are running full-blast ahead of next week’s landmark vote on net neutrality, so readers should take most “news” about the FCC with a grain of salt.”

    Thanks for leading with the disclaimer. I would guess there is a common thread of venture capital behind most of these companies that influenced their participation. Letting ISP’s charge for better service is only a threat to small businesses in so much as it may reduce the potential upside if they become large, and that might in turn make them less appealing to venture capitalists when they are small. On the other hand, it increases the likelihood that they can become large, if they can use better service to differentiate themselves from the large incumbents, allowing their other virtues to be discovered by consumers. Bandwidth is so cheap now that any differential pricing will be rounding error for a small company. It will only be significant for established companies who are operating at large scale and trying to shave pennies off quarterly financial statements.

    • Ryan Williams

      You have this 100% backwards. Large businesses like Netflix can pay for private links with comcast, verizon and att and it is a small line item on their books. You are correct about bandwidth being cheap, the problem is that businesses do not generally buy their bandwidth from Comcast. They buy it from business class ISP’s such as Level 3, Quest, etc and they buy it by hosting in the cloud with companies like amazon, microsoft and google. What is happening is the ISP’s like comcast and verizon are letting their links to much of the internet run at 100% capacity. Even though their customers are paying for fast access to the web, they intentionally run links with no spare capacity and they refuse to upgrade. Instead, they try to force (sometimes successfully in the case of Netflix) content providers who already purchase bandwidth from someone else, to also purchase transit or peering directly with them if they want fast access to comcast customers. The eyeball networks (the ones who connect to consumer subscribers) are extorting money from both sides, their customers and the content that their customers want to get to. No startup video streaming service has the cash to pay off all of the eyeball networks as well as pay for transit on the internet.

    • Anita Nelson

      Yes, that rubs me the wrong way, too. He’s taking precious jobs away from actors who need those commercials to survive and get exposure. I’m sure it’s not a coincidence that it’s Att.