Yesterday, the FCC met to vote on its notice of proposed rulemaking regarding the Open Internet. As was generally expected, the commission voted, along partisan lines, to move forward with their plan for Open Internet rules — a plan that, as currently designed, would allow for fast lanes and slow lanes on the Internet. (You can see the summary fact sheet here and the full notice here).
There are really two issues:
1) Should we be striving for an open internet — more specifically, should we ensure that everyone has open accessto the internet, unrestricted by internet access providers; and
2) How do we achieve that
On #1, I would encourage everyone to watch Chairman Wheeler’s remarks from yesterday’s meeting (embedded below). I was struck by how dead-solid he came out with a yes to that question. He spoke emphatically of “One Internet” and of enumerated all the ways he would stand up to internet access discrimination.
The issue is #2. The FCC’s current plan is big trouble.
But the win, incremental as it may be, is the rather dramatic shift in tone that the Commission has taken — specifically, explicitly considering reclassifying internet access providers as “common carriers”. The pressure from internet activists, tech companies (both at the applications layer and the transit layer), and investors, has had an impact.
After yesterdays FCC meeting, I joined a press call and gave the following statement:
Union Square Ventures is a venture capital firm that manages $1B in assets and invests in the applications layer of the internet — apps like Twitter, tumblr, Etsy, Foursquare, Kickstarter, SoundCloud, and many more.
As investors in internet applications, we’ve seen firsthand how the level playing field for startups that has existed with the open internet has been critical to the explosion of innovation and investment over the past decade.
And we also know how an environment controlled by gatekeepers with end-user monopolies can stifle investment and innovation.
That’s why we joined over 100 other VCs and internet investors in communicating this to the FCC and Chairman Wheeler in a letter last week. Collectively, we manage billions of dollars in investment capital and have invested in internet applications with hundreds of millions of users. And every one of these services started as a tiny company with virtually no resources, and very little chance of succeeding, even before worrying about discrimination and blocking from Internet Access Providers.
At today’s meeting, we were pleased to hear the passion with which the Chairman voiced his support for unfettered, open access to “one internet”. It’s clear from his remarks that he believes in the value of, and the need for simple, enforceable rules that protect a wide-open marketplace for internet applications.
Clearly, the debate over the next six months will focus on how best to achieve that goal.
There is substantial concern that the FCC will not be able to practically achieve its open internet goals under its section 706 authority, which means that looking closely at an approach under Title II of the communications act is a logical next step.
So, we look forward to engaging in that discussion, with the FCC, with the startups and other investors we work with on a daily basis, with carriers and with the public that is building more and more of their lives on top of the open internet every day.
So we will see where this goes. Starting now, and through July 15, the doors are open at the FCC for lobbying and public comment. One thing you can do today is write a letter to the FCC, stating what the open internet means to you:www.dearfcc.org.
The important thing is to keep up the pressure.
Over the weekend, FCC Chairman Tom Wheeler sent a response to the letter that over 100 VCs and angel investors submitted last week. In the letter, we stressed the importance of an open internet as a foundation for the stunning levels of investment and innovation we’ve seen in the internet applications sector over the past decade.
You can read Chairman Wheeler’s response here (also embedded below). It reiterates high level support for an open internet and states that all options, including Title II reclassification of internet access providers, are on the table. The latter part is the key — with the FCC going on the record that a discussion Title II reclassification will be included in the upcoming Notice of Proposed Rulemaking (NPRM).
This letter, combined with the reports over the weekend that the FCC may be revising its approach to open internet policy, are, at the very least, a step in the right direction and an opening in the conversation. But there is still a long way to go on this issue, and a lot of work to be done over this conversation continues over the next few months. The next step is the publication of the NPRM at this Thursday’s Commission meeting.
For those who are just jumping into the conversation, here is some good background reading:
* Tim Lee’s explanation of how payments for traffic on the internet work, and why what the ISPs are attempting to do disrupts the whole model
* Jon Brodkin’s (Ars Technica) coverage of the reaction to AT&T’s letter (Jon’s coverage of this issue is a great place to follow the goings on)
* Barbara van Schewick’s breakdown of the issue, including concrete examples of threats & harms posed by a non-open internet.
And finally — a concrete action to take, if you haven’t already, is to sign the White House petition in support of an open internet.
Over the past few weeks, the future of the open internet has come into sharp focus, as the FCC’s 2010 open internet rules were struck down in court, and then plans for new rules from the FCC came into public view. Amidst fears that the internet is f**ked, debate has raged about what this all means for internet users, entrepreneurs and investors.
Today, we are joining a group of
about fifty over 100 VCs and angel investors to voice our concern to the FCC as they consider how to proceed — specifically, regarding the impact that we expect a retreat from open internet rules to have on internet innovation.
It’s undeniably clear that the Internet has been an insanely fertile platform for innovation and investment over the past ten years. It’s less well understood that during that time, internet access providers have operated under a de-facto state of open internet policy (dating from this 2005 FCC memo), even before the 2010 formalized open internet rules were announced.
This open market environment has made it possible for tiny startups to build global platforms. For example, it allowed Foursquare to get to 100,000 users on $25,000 dollars and Tumblr to reach millions before they hired their 10th employee. They were able to compete on equal terms with the largest incumbents, and gain the love of users purely on the merits of their service.
And we’ve seen how the shift in the mobile landscape from a carrier-controlled market to an app platform market, with the launch of the iPhone in 2007, has blown open the mobile market for innovation and investment. We’ve also seen how, as mobile app platforms exert more control and restrict access to the market, the cycle of innovation slows.
So today’s letter states our hope that the FCC will weigh all available options when considering how to maintain the most competitive, vibrant market possible for internet applications.
You can read the letter here (also embedded below). We pulled this together quickly over the past 24 hours, and weren’t able to directly reach as many VCs and other investors as we would have liked, so will gladly welcome additional signatories throughout the day today before we formally file this with the FCC tonight. Email nick [at] usv [dot] com if you’d like to join.
This debate is just picking up, and it will be critical for everyone who cares about innovation on the internet to wrap their heads around this issue, and engage on it, as the FCC runs its rulemaking process through the summer and fall.