Hey, Startups: It’s Your Duty to Fight for Net Neutrality
Today, entrepreneurs can use the internet and focus first and foremost on building something people want. But if Federal Communications Commission chair Ajit Pai undermines net neutrality, entrepreneurs and consumers will be constrained by what big cable companies want. I hope you’ll join me in pushing back.
Affordable, fast internet access creates big economic opportunities across the country. The promise of the internet is that it gives everyone the power to compete and grow their ideas into businesses or products available to anyone. Today, internet-empowered businesses create millions of jobs and contribute over a trillion dollars to our economy’s GDP —and that number is growing.
Those benefits stem from the way internet access works. Think of it like electricity in your home. You buy electricity from a utility, and you’re charged based on how much electricity you use, not whether you use it for a toaster or a TV, or whether you choose a Sony TV instead of a Vizio. Similarly, when you buy internet access from a cable or wireless company, you’re generally charged for a given speed and the amount of data you use, without discrimination among different applications and content providers.
But last month, Pai announced his plans to erode the existing legal framework that prevents discrimination, allowing big cable and wireless companies to impose new tolls on internet businesses.
I’m worried about what his approach means for entrepreneurs and startups. At Y Combinator, the startup accelerator I run, we have proudly supported thousands of entrepreneurs and more than 1,400 businesses, including companies like AirBnB and Dropbox. Companies like these have gone on to change our lives for the better—how we work, how we eat, how we live. They could grow and compete, and ultimately consumers choose who wins and loses online. Without strong net neutrality rules, though, I’m concerned that the cable and wireless companies that control internet access will have outsized power to pick winners and losers in the market.
We’ve already seen instances where internet access providers have tried to block or interfere with online content. In the 2000s, providers tried to stop new entrants, like voice-over-internet service and video and file distribution services, that directly competed with their products. In both cases the Republican-led FCC intervened. But Pai’s proposal questions whether there is a “continuing need for a no-blocking rule” and would limit the FCC’s ability to create strong rules against it.
What’s more, some cable and wireless companies have said that they want to introduce pay-to-play prioritization systems. This approach has rightly been prohibited; while big companies could afford to cut special deals to get in the so-called fast lane, everyone else would be relegated to a slow lane. Even though federal courts ruled that the FCC’s current approach is the only way to effectively ban this practice, Pai wants to discard it.
Instead, Pai’s new approach would give a green light to cable and wireless companies that want to discriminate in a variety of ways. His proposal ignores how cable companies have tried to choke off access to services like Netflix. The FCC chair also would permit wireless companies’ practice of exempting their own video services from data caps, while charging competitors for the same treatment.
Pai says his plan is necessary to drive investment in new infrastructure, but it could very well do the opposite. To get big companies to pay for what amounts to a first-class ticket for their data, internet access providers would have an incentive to make coach class worse and worse for competitors. Instead of building new infrastructure with faster speeds and abundant capacity for the entire internet, cable and wireless companies might ration what they’ve already built.
It’s certainly critical to remove barriers to the construction of new networks, but the existing net neutrality rules are not the problem here. Some of the biggest cable and wireless companies themselves have already said that the current legal framework hasn’t hurt them, and capital expenditures across the industry continue to rise.
In response to Pai’s plans, I worked with Engine Advocacy, Techstars, and more than 1,000 startups and entrepreneurs on a letter urging Pai to preserve the existing legal framework and focus on policies that would build a stronger internet for everyone. Our voices come from across all 50 states, including from an Indiana company helping consumers find quality healthcare providers and a Michigan firm that helps farmers increase crop yields. We were also joined by internet access providers like Sonic, an independent provider that is expanding its fiber-to-the-home network, as well as Ting Internet, which has a growing fiber business in Maryland, Virginia, Idaho, North Carolina, and Colorado.
We need to keep building this coalition and take action across the country. Please join us and support an open internet.