How FCC’s Net Neutrality Proposal Could Affect Startups


The battle is brewing over Net Neutrality. On one side stands the Federal Communications Commission (FCC), whose chairman, Tom Wheeler, is proposing a new set of rules that would allow Internet providers to establish a “fast lane” for content.

On the other stand many of the companies that actually provide that content, including Google, Netflix, Twitter, Amazon, and others. “According to recent news reports, the Commission intends to propose rules that would enable phone and cable Internet service providers to discriminate both technically and financially against Internet companies and to impose new tolls on them,” reads an open letter to the FCC signed by dozens of firms. “If these reports are correct, this represents a grave threat to the Internet.”

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In light of that opposition, some FCC commissioners (most notably Jessica Rosenworcel) have called for Wheeler to delay a decision on Net Neutrality until more parties can weigh in. “Moving forward will allow the American people to review and comment on the proposed plan without delay, and bring us one step closer to putting rules on the books to protect consumers and entrepreneurs online,” FCC spokesman Neil Grace wrote in a statement, according to Reuters.

If the FCC does authorize a “fast lane” for Internet traffic, it would benefit infrastructure providers such as Comcast, which could charge hefty fees to Netflix and other carriers of streaming content. Comcast’s proposed acquisition of Time Warner Cable (a deal potentially worth $45 billion) would transform it into an especially strong gatekeeper. “[Comcast] is already the nation’s largest ISP, the nation’s largest video provider, and one of the nation’s largest home phone providers,” John Bergmayer, senior staff attorney for Public Knowledge, a nonprofit watchdog for intellectual-property law and competition, wrote in a Feb. 12 statement. “It also controls a movie studio, broadcast network, and many popular cable channels.”

A “fast lane” would also affect e-commerce, streaming, and other Web startups. Without the cash to pay for ultra-fast bandwidth, can the next Google or Amazon even begin to compete with established players in the space? If the prospect of that doesn’t make more than a few startup founders and developers nervous, nothing will.

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