Why the FCC's Net Neutrality Vote Matters for Tech Start-Ups
Today, the Federal Communications Commission voted 3-2 in favor of regulations which enact so-called "net neutrality." The vote allows the agency to penalize “throttling” — leveraging Internet speeds to clients on a case-by-case basis — by broadband providers like Comcast and AT&T.
The FCC’s order prohibits a broadband provider from blocking (legal) content, slowing any speeds on the basis of content or providing “fast lanes” for preferred customers on any Internet-enabled device. As nearly 4 million public commentators argued, if left unabated, throttling could limit the ability of the “little guys.”
Today’s vote is seen as a preemptive measure to prevent throttling, and for the moment it's an issue that largely affects major players in content production and distribution like Netflix.
The push for net neutrality isn’t new, but it’s come to the forefront after a 2010 spat between Comcast and Netflix over the ability to stream content over broadband networks, with the broadband provider slowing Netflix’s speed. That spotlight was magnified a few months ago when President Obama proposed the Internet be regulated as a utility, similar to other telecommunications, under Title II of the Telecommunications Act.
Josh Baer is executive director and founder of Capital Factory, a start-up incubator in Downtown Austin. Baer says he’s torn on the FCC’s decision. In recent months he’s hosted both Sen. Ted Cruz — who called the Title II regulation “Obamacare for the Internet” — and Austin Congressman Lloyd Doggett, who defended the Title II proposal at Capital Factory last week.
“The general tech community is in favor of net neutrality,” Baer says. “And the concern there is trying to make sure that small, innovative businesses aren’t squashed by the big companies that control the pipes, and to make sure that the next YouTube or the next Netflix can be started and isn’t held back by companies charging them for access.”
Typically, he says, he’s pretty opinionated. But, in this case, he finds himself siding with arguments put forward by both Cruz and Doggett in the debate — that regulation could stifle innovation, as Cruz contended, but that a framework like the order adopted by the FCC today could prevent future throttling on a larger scale, as Doggett argued.
Watch Sen. Ted Cruz speak at Baer's incubator Capital Factory in Austin:
Today, FCC Commissioner Michael O’Reilly argued that the regulations are heavy-handed and that many haven’t considered the implications of the order on mobile networks. Fellow Commissioner Ajit Pai echoed his sentiment and said that today’s vote was not a solution to the problem of open Internet.
For Baer, that’s partly true. Net neutrality, for now, only affects large corporations, not the start-ups shepherded by Capital Factory, but the issue could have trickled down to smaller content producers over the next decade.
“It’s between Netflix and whether they’re going to pay Comcast or other big companies like that. In practicality, it’s not an issue for small companies,” he says. “There’s no small company saying, ‘Oh, I’m not going to be able to deliver my services’ or ‘Oh, I have to go out of business because Comcast is throttling me.’ What we’re worried about now is the threat of that happening in the future.”