Regulation Strangulation

I've written a bit about net neutrality on this blog in the past few years. Every time I do, I hear about problems with regulating the Internet. The readers of this blog are a fairly "laissez faire" bunch. Guess what? So am I.

Somehow net neutrality got painted as "regulating the Internet" when it is really all about not regulating the Internet. Net Neutrality is about keeping the way the Internet works today; an open Internet where innovation is allowed and freedom reigns.

In the past ten years, the on ramp to the Internet has changed. Hundreds, maybe thousands, of dial-up providers have been replaced in the US by a handful of broadband providers with local duopolies. And we now have a wireless Internet in the US with an on ramp controlled largely by four carriers (two of which have the dominant market share). And these access providers have invested heavily in packet detection systems that will allow them to use their dominant positions to "manage their networks".

So now we have a situation where the access providers want to change the game. And they are seeking the regulatory approval to do just that.

Venture backed startups and venture capitalists don't use regulations and lobbying as competitive advantages. We don't have armies of lobbyists. We don't have congress on our payroll. But the access providers certainly do. They have been regulated for a long time. They know how the game is played and they use it to their advantage. Regulation is their game. They want our government to regulate the Internet and they want those regulations written in a way that allows them to do what they want to do. A regulated Internet is a comforting thought to the access providers and a frightening thought to entrepreneurs and the ecosystem around them.

I don't want to see the Internet regulated. I don't want rules that require oversight and adjudication. But given that we now have an on ramp that is tightly controlled by a small set of access providers with almost identical interests, I would like to have one basic rule that is so simple that everyone understands what it means and we can simply follow it.

Our firm are fans of the work of Barbara Van Schewick, Professor of Law at Stanford, who argues for the following simple rule:

A non-discrimination rule that bans all application-specific discrimination, but allows all application-agnostic discrimination. Discrimination is application-specific if the discrimination is based on the specific application or content (e.g. Skype is treated differently  from Vonage), or based on classes of applications or content (e.g. Internet telephony is treated  differently from e-mail).

That is all we need. Nothing more, nothing less. That is net neutrality. A policy that maintains the way the Internet works today. That has brought us Google, Amazon, eBay, Yahoo!, Facebook, Twitter, and many many more innovative web services.

There is a lot of debate and discussion going on in Washington, Silicon Valley, New York City, and all around the country right now about net neutrality and regulating the Internet. We have big companies with huge vested interests making proposals that are heavyweight and are not startup friendly. We don't need Google, Verizon, AT&T, or anyone else telling us how to regulate the Internet. We don't need pages and pages of rules written by lawyers that will employ lawyers for years to come.

We just need to choose not to discriminate on the web and thereby maintain the way the Internet works today. I hope that everyone will come to their senses and realize that is the simplest, easiest, and best path forward.


Comments (Archived):

  1. Christian Brucculeri

    A simple, elegant position on a complex problem. Thanks for posting this.There seems little doubt that if access providers are permitted to shape the landscape of the Internet, literally everyone else will lose.

    1. calabs

      That is a very concise way to put it.I think there must be something missing from capitalist economic theory when so many of it’s obviously bright and capable adherents go against infrastructure regulation. When nationwide *coherence* is required, then government action is *mandated*. War is the best example of coherence, but so is diplomacy and certain internal matters like roads. The internet is very much like a road system (it even looks like one, topologically) and to argue to allow the destruction of the coherence of the American information infrastructure in the name of capitalism is just wrong.

  2. Eric Leebow

    The Web as a whole should not be regulated, however websites should be regulated, meaning that content that is offensive should not be posted on the Web. Being you’re the owner of this blog, if you do not like what someone is saying, you have every right to remove it.

    1. ShanaC

      who decided offensive?

      1. Eric Leebow

        For instance, the person managing the blog. It would be their discretion.

        1. ShanaC

          that sounds like the system we have now

          1. Eric Leebow

            Yes, and that’s the system I will have with the social networking site I’m soon starting, the community will be able to decide to remove stuff.

  3. Scott Carleton

    I want this too. Can it happen? Can laws be put forth to not mess with the internet? The old maxim, ‘if it ain’t broke don’t fix it’ comes to mind but I fear that is never how regulators perceive a situation.

  4. TarekP

    Is there a specific call-to-action that you endorse that end users can take that may influence the struggle in favor of innovation & net neutrality. This may be a start: http://www.savetheinternet….

  5. John Belo

    Abandoning net neutrality would be an attack on the core values the Internet was built upon. If corporations have to rely on traffic discrimination to sustain a competitive advantage, it just shows what the dire state of the innovation culture they’re relying upon. It may also mean Google has become a larger company than it should be.

  6. xackr

    My biggest problem with all of this is this. The Internet was created with tax payer dollars. As the intellectual property of all of America – why are we paying a premium to use it, instead of receiving gobs of royalties from those cashing in. I think it should be regulated, like tracking down and arresting people that commit fraud but I don’t think like every other medium it should become the “playground of the rich” while John Q. Public waits for his download.

    1. ShanaC

      we deregulated it so it could be a public internet (before basically it was a few major corporations and, research institutions, and the military), such is the price of the way we deregulated. Is the internet a utility like power and water in America, or up to a point (xxxx bandwidth is a utility, after xxxx it is a luxury?)There are interesting questions here.

  7. Kevin

    Google should be ashamed of themselves. If their company is (or was) based on the concept of merit-based search the idea that they should close doors to smaller Net entities, rather than open them, is not only immoral to me, I suspect it may hurt business in the long run. I don’t know everything about their deal with Verizon, but the concept of going to the front of the line for money undermines their core business: search.

  8. TarekP

    Posted this on Twtr. If you want to support, sign & hope something comes of it: Tell #FCC Chairman Genachowski: It’s up to you, not Google, to save the Internet: #netneutrality (via @freepress)

  9. Da_mato

    Why don’t you hire lobbyists? While the financial burden on a single firm would be too high, I’m sure there are enough tech focused VC firms that could pay some amount proportionate to their fund size to pay for a full time lobbying effort.

    1. Kenneth R. Carter

      That’s a brilliant idea. I sure there must be a tech VC industry organization which could get that rolling.

    2. JP Tucker

      Actually, the National Venture Capital Association (NVCA) does employ lobbyists, as indicated by this disclaimer on their membership dues page (…”We estimate that 25% of your dues will be used for lobbying and is not deductible because of recent changes in federal tax law.”The real question is, can lobbyists employed to represent an entire industry like VC (with a dizzying array of markets and implications to consider) devote the same amount of resources to the net neutrality battle as the experienced lobbyists of a few entrenched and well-endowed corporations, who need consider only their own market and interests? This is not a level playing field, but I’m hoping that neutrality prevails…

      1. Evan

        USV isn’t a member of the NVCA

    3. fredwilson

      the NVCA hires lobbyists and they use them to fight for crap like blocking higher taxes on carried interest while ignoring the real threats like Net Neutralityi am not a member of the NVCA

  10. andyswan

    A few questions before we get the 536 clowns in D.C. in charge of this.1) When is the last time Congress passed a one-page bill as simple as you lay out?2) When is the last time the federal government did not take advantage of a simple, innocent rule like this and turn it into a “foot in the door” for more and more control and power?3) Why would we trust this government, or future governments with ANY power over what companies can or cannot provide to their clients?If there are monopolies or duopolies that are abusing their status, fine them or break them up….that is a legitimate, limited role of government.But giving government even an inch towards determining what content can, cannot or must be provided to consumers is a HUGE LEAP in the direction of soft-tyranny.This is NOT just an argument about what should be written on the bill. This is a legitimate argument about the role of the federal government, and our trust of the federal government to continue to get it right once we let them in the door.Like it or not, this IS about government regulating the internet.

    1. kidmercury

      such a good comment andy! badgeworthy.

    2. ShanaC

      Number 1 is a major problem for all laws right now. It feels nearly impossible to follow a bunch of major laws! In mens rea seems to apply to everyone, since the law has become way to expansive to know what is logical for the average citizen to know, and to know his responsibility. Take Clean Air and Water- who at a site is responsible if you screw that up. Because of the way the law is written, I think it is the management, but it could be the workers did something or the management. See the problem! Gah!And I want Clean Air and Water. But I want it in such a way that everyone understands how to create clean air and water….Same goes with internet regulation/deregulation. If the regulation is that level of complicated, expect people to bypass it or screw it up.

    3. Healy Jones

      This is a good point. One page bills are pretty much impossible. Let’s stuff a few other things in there. Here is what I would propose:$5 million a year to a pig farm in PA for waste remediation $2 million for a new municipal center in Fresno, CA$1.5 million so a University of New Mexico professor can study the impact of the Boston Celtics acquiring Shaquille O’Neal on the mating rituals of the Rockhopper Penguins in the Falkland IslandsA three day paid holiday in October for elementary school teachers in McMinn County, TNHappy to add a few more if anyone has suggestions.

    4. Mark Essel

      +1 for justice.

    5. Tereza

      I agree with you Andy. But we have to thread the needle on this somehow.I spent a lot of time in large places where the Office of General Counsel was king. The No’s that fly around there have nothing to do with good business or good innovation. They are in fact outsourcing their innovation. And as such, they are cutting off their noses to spite their faces.But they are subject to quarterly earnings reports and not a longer-term view.Innovation will stop and that will be devastating.We have to thread the needle somehow.How?

      1. andyswan

        Startups in wireless. Startups that compete based on innovative models…like (gasp!) not allowing streaming anything unless you pay up for it.Competition brings innovation….regulation hinders it.We don’t need to thread any needle. We need to punish any monopolistic abuses (of which I’ve heard of VERY few—but lots of “coulds”) and other than that, just GET OUT OF THE WAY.These regulations of product features will only keep innovators OUT.

        1. onsip

          Very well said, Andy… Being pro-competition/start-ups/innovative models is synonymous with being pro-consumer.

          1. PhilipSugar

            As somebody that Verizon could kill with a flip of the switch I would think you would think long and hard about that. As a potential customer, I can assure you when Verizon’s sales rep comes to talk about whether we should keep POTS lines or route everything via the FIOS connection and use your service they bring this up.This is an issue which you can look at from the Commons theory Garrett Hardin for guidance.I want government out of my life and out of everybody’s life way more than most. Some of my theory’s on welfare, wealth redistribution, government pensions, and allowing only people that pay taxes and not receive a check from the government to vote etc make many people both conservative and liberal very uncomfortable.However, like it or not there are certain things like roads, the environment, and in this case infrastructure that have to be regulated (as little as possible) It does not make sense having hundreds of people wiring the last mile so like it or not that last mile will always be a monopoly and need to be regulated.I’ll give you a low tech analogy. I used to live in DE where they had a law to outlaw the trash hauling monopolies. Sounds great….you had the right to choose anybody you could to pickup your household trash. The result was a nightmare. You’d have several different trucks every single day ripping around the neighborhood as fast as they could to pickup trash from one out of every ten houses. The waste in fuel and the fear for having a kid get run-over where huge. Now in MD I pay half as much and only have to listen once a week to a truck slowing stopping at every house.

          2. Donna Brewington White

            Yes! You’d think this could go without saying, right?

        2. fredwilson

          tell me how we are going to get competition in the local loop

          1. andyswan

            Create it.

          2. fredwilson

            with whose money?

          3. andyswan

            If customers are really this dissatisfied with current isps, I’m in for 25k.

          4. kidmercury

            i’m in for $0.25. (sorry, don’t have much money to begin with and most of it goes into gold)

          5. ShanaC

            if you really want to do an ISP, I have an introduction to make that will be complicated for me. All that being said, most of what I know is that independent ISPs want to be out of that business, oligapies crowded them out.

          6. KP

            what happened to Fon? I’m sure if centralized distribution fails market demands someone can patch a way around that…. sort of how the “duopolist” cable providers began.

          7. Morgan Warstler


        3. calabs

          Our society is founded on utilitarianism, and is capitalist only insofar as it serves that goal. Government action is warranted when market forces would create ever greater incoherence and complexity, as these qualities will eventually undermine the nation itself. That is why we do not have a system of private armies, a system of private roads, or a system of private tax collection.We are all better off using a system of publicly maintained interstate highways. The toll-road alternative would be a fiscal and bureaucratic nightmare, and the net impact on our GDP would be enormous.The fact is that a free flow of bits, like goods, is important for the functioning of our entire nation. Allowing carriers to add complexity and cost to the information highway would be a terrible sacrifice at the alter of capitalist dogma. In fact, I’d go so far as to say that it would be appropriate for the Internet to be a universal government entitlement, like Social Security. One can hope.

          1. andyswan

            Why hell yes! Why didn’t we make it a universal right to have 56kb dial-up for all in 1998? Imagine the progress!!!!Reminds me of the great “leather buggy whip for all” right of 1882.

    6. GlennKelman

      Do you trust Verizon more than the government to think about what’s good for the Internet?

      1. andyswan

        False choice.I trust the competition of the free market more than I trust the government. Absolutely.Verizon is a huge participant in that, like AOL used to be….and if Verizonfails to innovate and keep its customers happy, it will share a similarfate. And the internet will progress onward.

        1. CJ

          I agree that it’s a false choice, but for a slightly different reason. Verizon, and their lobbyists, are paying off the people in the government to think about what’s good for the internet. So letting the government decide is really letting Verizon decide and no, I don’t trust either to get it right.

        2. GlennKelman

          Andy I believe in the free market, too. But if the free market always resulted in good choices for consumers, we’d already have them in broadband: nobody likes the major providers. Clearwire has tried to do what you have suggested and consumed billions in capital. I just wish we could be less ideological and more reasoned, particularly when discussing oligopolies and utilities.

          1. andyswan

            Personally, I am in awe of what ISPs and wireless carriers provide me. I can stream movies where 7 years ago it took an hour to download a software update. I can trade stocks and option spreads in real time from a car moving 70 mph (passenger seat).For $50/month I get higher uptime and probably 10x the bandwidth than I got 8 years ago when I paid $700 a month for a split T-1. Wireless carriers are going to war over 3G coverage area and 4G speeds. High-speed cable internet is now available at our lake house where just 3 years ago it required a satellite dish and a decent budget.Why do you believe that the major providers are not being challenged by other companies, if their customer base is so dissatisfied?More importantly, why do you believe that the Federal Government can solve the problem through legislation and enforcement? What example do you have from a similar industry situation where this has been helpful? Housing? Healthcare? Transportation? Postal services? Airport security?

          2. fredwilson

            when you start your next company and they demand $1mm upfront to carry your service, then you’ll come around to my way of thinking andy

          3. andyswan

            No, I won’t. It will either be worth $1m to have that provider carry myservice, or it won’t. 5 years later, once their customers are hooked on myservice, perhaps I’ll charge them $5m for the right to transmit it.In any event, I certainly won’t ask the Federal government to intervene andmake a business transaction more favorable to me.

          4. ErikSchwartz

            This was what the carriers did in the wireless space with the whole on/off deck application situation.Until Apple busted it wide open.

          5. fredwilson

            and we didn’t invest in wireless until apple busted it openif the net becomes like that, i won’t invest in it anymore

          6. andyswan

            I think the important point is that private enterprise busted it open, not Federal Gov’t intervention.

          7. fredwilson

            i would love to bust the local loop open the same waybut that will take tens of billions, maybe more, to doand nobody is investing that after the CLEC debacle

          8. Morgan Warstler

            Blimps dude, blimps.

          9. ShanaC

            Your internal back of the napkin calculations have that $1M to be a compounding number, not a one off deal? It’s not $1M straight up them, it’s $1M/y as a starter with compounding issues as growth occurs. Web 1.0 was built on that extra $1M but that was not compounding, and I could see why people would want to rush away from any extra improper expense.Yup, that would kill the web. The compounded extra losses would hit revenue so badly. Though I would still like to see your projections.

          10. kidmercury

            no, you are implying the only solution to excessive market consolidation is net neutrality. in andy’s extremely popular, badgeworthy comment in this thread he offered other ideas (break up monopolies). the idea that net neutrality is the only solution is false.

          11. fredwilson

            we tried that with the telecom reform act. it didn’t work.

          12. andrewwatson

            ding ding ding! we have a winner. that is EXACTLY the problem. If i build a product that competes with Google, how the fuck am i supposed to get over that barrier? They can outspend me 1000x to make sure cable customers can’t get to my application.The discussion of this on NPR was good this morning. The problem with allowing ISPs to grant preference is that it creates a perverse incentive for them to make the default level of service SUCK (and it’s already not awesome). Then more companies will pay to get into the “good” tier.

          13. smithy

            “High-speed cable internet is now available at our lake house”Broadband to rural areas is paid for by the taxpayer and brought to you by the GOVT. Lobbyists from AT&T and Verizon did their job.”Why do you believe that the major providers are not being challenged by other companies, if their customer base is so dissatisfied?”Because they have lobbyists. On a related note, nearly everyone I know hates their bank but I wish the best of luck to any entrepreneur attempting to start up a bank.

          14. Jon Knight

            “Broadband to rural areas is paid for by the taxpayer and brought to you by the GOVT. “I call bull.It was paid for by the taxpayer, yes. (Remember that nice little incentive the govt gave the ISPs in the 90s that required them to build out the rural base… that they then reneged on and the govt dropped the requirement, without demanding the nearly $1B back?)But it was never delivered. I have family that live less than 10 miles out of town and they cannot and will never have cable or DSL. Both TW and Bellsouth have said they have no plan to ever install it.You’re correct about the lobbyists, though. Definite win for them.

          15. giffc

            Your town needs to get more active. We have a small house in the catskills and there was no movement on broadband until the town went to Time Warner and said, “you give broadband to everyone or you get to serve no one!” then they finally laid cable on our road.

          16. gorbachev

            The Koreans laugh at the awesome broadband and wireless service we have.You’re settling for something FAR less than what could be, if the awesome network providers weren’t too busy consolidating their stranglehold on everyone.

          17. CJ

            You can’t fail to regulate companies that were built using taxpayer money and handed virtual monopoly power of various areas of exorbitantly priced infrastructure that would take decades and tens of billions of dollars to reproduce. It would be negligent. The argument isn’t one of whether the government should regulate this principle, it’s an argument on how they can fail to regulate it when they commissioned the underlying infrastructure and created the companies that control the vast majority of all access. The damage that is big government was done decades ago when it comes to (tele)communications in this country, now they must ensure that access remains free to all otherwise they would be negligent in their duty to regulate the monster they created.

          18. Dave Pinsen

            I can’t complain about our cable company’s Triple Play (while it lasts): premium cable + DVR + unlimited phone + 54 Mbps Internet connectivity for ~$100 per month isn’t a bad deal at all.

          19. GlennKelman

            I’ve never heard anyone say he loves AT&T or Comcast, but I’m glad to see you’re the first. And I just think some businesses have enormous economies of scale, limiting the ability for new entrants to compete.My overall point isn’t that I reject free markets, only that they aren’t entirely self-regulating, and that the formation of oligopolies is one of the major problems.And without at least the threat of FCC action, the Internet would already have become much less hospitable to new entrants like the company where I work, Redfin.

          20. andyswan

            So break em up….wtf does this have to do with the fcc?

          21. CJ

            The clash between idealism and realism – ideally you’re right. Practically, it never happens. The fact that AT&T once again owns almost every company that was spun out of Ma Bell illustrates that principle beautifully.

        3. andrewwatson

          it’s only a free market when there is transparency and the market is able to make informed decisions.if you’re sitting at home on your Time Warner cable modem and you have a choice between two applications but you ultimately have to choose the one that paid TW for priority but you don’t even KNOW THEY PAID FOR THAT then the free market fails. FAST.that’s like saying that the government shouldn’t mandate seat belts in cars. how many people have to die in accidents before the “market” decides that seat belts are a good idea?

        4. James

          AOL failed not because they failed to innovate but because wire companies like Verizon put them out of business by forcibly taking their customers. The same fate can befall any Internet company. Verizon could for instance introduce a new video sharing service for its FiOS customers which is served at the maximum wireline speed, while at the same time throttling YouTube to 100kb/sec. Think their FiOS customers will keep using YouTube? Would that represent a failure of YouTube to innovate?

    7. Emil Sotirov

      “We” and “them” (the government)… you say, Andy.Unfortunately, “we” and “them” are the same wonderful American kids-sellers-of-lemonade… programmed to pursue our own self-interest and to compete with everything that moves (and rules are for “losers”, too).Only… “them” are the ones we elected to pursue our… what… COMMON(!?!) interest? WTF is that!May be we should outsource government functions to (or establish a special work visa for) people from countries (Finland, may be) where children are not expected to start selling stuff and themselves from the age of five.What do you expect from elected officials – to NOT sell whatever they can sell!?! It’s a market, Andy.

      1. andyswan

        Competition and the pursuit of “more” (happiness, wealth, etc) is a human condition, not one that needs to be programmed.I don’t expect anything from government except to defend my life, liberty and property. That they are “buyable” is not an American phenomenon. It is a government phenomenon, and one of the reasons my ancestors jumped on a 3.5 month trip on a wooden boat across the Atlantic. And absolutely the reason that all of our founding fathers decided to write a Constitutional document that strictly limited the influence of these power-peddlers in our lives!

        1. Emil Sotirov

          Cooperation and the pursuit of “better” (happiness, wealth, etc) are also part of the human condition. There is also something like “our” happiness, wealth, etc.And… it’s not about “them” being “buyable”… it’s about Americans being programmed to be “sellable” since early age by parents and institutions.As of the founding fathers… they were believers in the possibility of “better” government… at least as much as against feudal tyranny.And I am probably closer to your ancestors than you are – I chose to become American after spending the first 30 years of my life under real socialism (industrial feudalism). Or, rather, my parents brought me up as an “American” long before I came here. One thing they did NOT teach though – how to sell stuff and myself.

          1. andyswan

            Indeed. I believe that they were very clear that a “good” government is avery strictly limited one.So…..we agree?”I became an American long before coming to America.” is great.

          2. Emil Sotirov

            Andy… I am a “cultural” fundamentalist. I look for “faults” and “leverage points” in social ideologies rather than in specific political or economic structures. Government (politics) vs. market (economy) is almost a Marxist way of seeing things.However, moral integrity does not ensue from free markets (unfortunately)… nor from good government. It’s more like the other way around. Moral integrity is a separate and absolutely needed element for free markets and better government.We’ll not get to limited government and functioning (transparent) markets with people engaged in “at any moral cost” pursuits of “more” for themselves.Thank you for all your good commenting on this blog (I’m a regular reader).

          3. ShanaC

            thank you as well. You’re right on about the cultural fundamentalism. There is a massive problem out there of can you get too free market just as much as can you get too socialist. Both can kill cultures

          4. andyswan

            Shana…..what’s an example of “too much free market” “killing” a culture? When did this occur?

          5. ShanaC

            Cortez and smallpox in the Americas

    8. fredwilson

      i am not suggesting congress do anythingi am suggesting the FCC do this via their rulemaking authority

      1. andyswan

        Who grants them this rulemaking authority, and under what authority (document) does THAT body have the power to grant rulemaking authority?Does it not bother you that a small group of unelected appointees will amass this power? What is the recourse if they go too far? Have they ever NOT gone too far?

        1. fredwilson

          they have the rulemaking authoritythat is what the FCC does

          1. kidmercury

            lol, as you know, the FCC’s rulership over the internet is a highly contentious point.

          2. Morgan Warstler

            +1 here. The decision was made, ObamaCo shouldn’t even be considering grabbing new authority.

          3. andyswan

            So, if they want to create a rule that ISPs must redirect all web traffic to the state of the union address when it is live, they (the FCC) have the authority to do so? Do they have the authority to make a rule against publishing content that is anti-gay or anti-communism?Who grants the authority and what or who limits it? Who are they accountable to?

          4. fredwilson

            presidential appointments, like judges, i think

  11. akharris

    Overall, I think you’re right. The bit that I have trouble fully reasoning through is the fact that, in order to continue the increase in broadband penetration and speed we need continued, material, capital investment from the big four that currently dominate the market. If that doesn’t pay off for them from an ROI perspective, they won’t do it. That’s the tricky bit. If they want to charge more for greater uses of bandwith, it might make some sense. After all, I pay more if I use an SUV to get from NYC to Boston than I do if I drive a Civic (or, for that matter, if I fly). I get roughly the same utility, but I pay more for it.Of course, on the other side, you could say that creating higher hurdles for various companies at the outset that they have no choice but to deal with order to play effectively chokes off an innovation stream. Could there be a middle ground where early stage companies get a free pass, whereas later stage companies and users have to pay the premium for the premium pieces? I’m really not sure. The capitalist in me is fighting with idealist.

  12. Gabriel Brown

    Worth a look at this discussion over at Light Reading…A good balance of views with perhaps more understanding of the issues than you’ll find most places on the Web.According to our research (we’re a telecom research firm) operators are looking more at per-subscriber policy than application-level policy. This would fall within the professor’s definition above.

    1. aswath

      Will the operators continue to maintain bill and keep even for per-subscriber policy or will they try to pass it onto the far-end?

  13. mattmaroon

    Why don’t VCs have lobbyists? Is there no VC equivalent of the RIAA? Venture firms cooperate much more than record labels on a daily basis, you’d think it would be even easier for you guys to come together and fight for what is mutually beneficial.If there is one thing I learned from the online poker industry, it’s that where lobbying is concerned, and ounce of prevention is worth 1,000 pounds of cure.

    1. fredwilson

      it is called the NVCAi am not a memberthey spend their money fighting for lower taxes on VCsnot for the important stuff like net neutrality

  14. Thom Covert

    Can you give an example of application agnostic discrimination? If you can’t look at the bits (and figure out of they are video, phone calls, etc), what factors can carriers discriminate on?

    1. ErikSchwartz

      Volume.There will be tiered pricing. You get so many bits for so many dollars and you can use them for email or streaming video.

    2. ShanaC

      i do think over time someone will break this covenant and it will be by bits. It is just a matter of seeing who has the biggest and sharpest knife hidden away

    3. fredwilson

      carriers could do most forms of quality of service and network management on their network as long as it isn’t application specific

      1. Jake Howerton

        Sorry, this notion is silly. Verizon could just peer directly with google prioritize all traffic bound for their network and bill google for the service. Same result as application layer filtering, besides which equipment gets purchased.

        1. fredwilson

          what notion is silly? the non discrimination model would not allow what you suggest

          1. Jake Howerton

            Sorry Fred, you just broke the entire internet. It is made of individual actors making decisions in their best interest. Company A and B are paying company X to route between their two networks. The traffic grows to the point that this no longer makes sense and they want to connect networks directly, they do it, then they build rules that make the most sense to route traffic between them.This is how the internet works, why it exists, and how it has been improved over the last generation. To change this is to stop it.

          2. fredwilson

            Jakei would suggest you read Barbara’s filing with the FCC…<http:”” ecfs=”” document=”” view?id=”7020652515″>i think she doesa much better job of articulating this than i do

      2. Thom Covert

        So who is buying quality? I’m not a network engineer, so feel free to point out that I’ve missed something important, but how exactly can a carrier sell a QOS service to a user or application provider without discriminating at the app level? When a user buys “quality”, isn’t that user getting priority over other users, somewhere in the network, at some time? When an app provider buys quality, aren’t they getting priority over some other app provider? The only way I see that a carrier could sell QOS (especially to app providers) without running afoul of your app-neutrality constraint would be to force it to offer the same QOS terms to any app provider who chooses to pay the fee.Maybe I’m not being creative enough here, but can you give a more concrete example of app neutral network discrimination?

        1. fredwilson

          Thomi suggest you read Barbara’s paper she filed with the FCC on thisit’s dry and academic but she does a much better job of addressing yourquestion than i could do…<http:”” ecfs=”” document=”” view?id=”7020652515″>

  15. reece

    pretty much in agreement with a nice simple rule. i know Andy’s already elaborated on how the gov’t will f* that up though…i would like to hear some clarification on “allows all application-agnostic discrimination.” she gives examples of what discrimination wouldn’t be allowed, but what types of discrimination exactly would be allowed?is she just talking about bandwidth? piracy perhaps? i haven’t paid attention closely enough to have any references…

  16. kidmercury

    oh boy….i was really waiting for the net neutrality post…’s going to be a wild day in fredland…’s my contribution to the chaos:1. fred calls himself laissez-faire; i suppose it’s all relative. it should be noted, though, that his defnition of laissez-faire includes a carbon tax, voting for president soetoro, voting for warmongering bailout proponents like schumer, and supporting the national broadband plan (like going to DC to support it), which of course will be a bill that taxpayers foot, though that is conveniently left out of any blog post mentioning how great it is. just like how teh cost to taxpayers is left out of any net neutrality discussion. as a reminder, net neutrality is about government enforcement, and government enforcement does come at a cost. of course this does not mean that the cost is not warranted, but how do we know the cost is not warranted if no one ever mentions it?2. where were all teh NN proponents when the infrastructure layer was the hot opporutnity? back then the idea of NN would have been seen as threatening VC opportunities. lol, how times change! and indeed they will change again once we move to the governance layer. will you guys be able to undo the legislation when the governance layer makes profitable and growth-oriented to do so?3. the google/verizon controversy illustrates the problem with the current legislative process, and how it is designed by corporations for corporations. that is a problem no one wants to solve. that’s fine, but then be prepared to accept the consequences, which is faulty legislation no matter what.4. google is a part of the app layer. just as we fear excessive consolidation in the ISP sector will lead to ISPs suffocating the app layer, isn’t google’s excessive dominance over the app layer cause for concern? should we establish limitations on the app layer as well? if so, what should they be? who should enforce them? what will it cost? the slope gets slippery very quickly once you wonder down the path of excessive government regulation, doubly so when the regulators are in the pocket of the corporations they are designed to regulate against — a practice that is rampant throughout US government bureaus (big pharma owns the FDA; big agra owns the USDA; financial behemoths own the SEC; warmongers own the CIA [and everything else]; etc)4. the real problem is that the internet is not sufficiently regulated as a whole. it is a global thing, yet it is controlled and funded by the US government (specifically the department of offense). the internet transcends the nation-state system, and thus when you try to use the nation-state system to regulate it, you are going to end up with a big mess. like trying to put a square peg in a round whole: it either won’t work, or will require some type of butchering to make it “work.”

    1. Evan

      I’m laissez-faire != supporting Chuck Schumer

    2. Aviah Laor

      NN makes it harder to differentiate funded vs. not funded startups, and this is not necessarily good thing for VCs

    3. David Rogers

      “President Soetoro”? What, is kidmercury a “birther”?? Or is the irony here getting too thick to swim in?-someone who spent time in Indonesia growing up (and therefore must be a muslim spy, eh)

      1. kidmercury

        all mr soetoro has to do to silence the growing percentage of americans who have questions surrounding the issue of whether he is a natural born citizen, and thus whether his presidency is legitimate and in accordance with the rules specified in the US constitution, is show his 1961 birth certificate (not the phony thing he has posted on his web site; the real certificate, signed by the doctor who administered the birth). rather than show this, mr soetoro has spent a lot of time and money fighting class action lawsuits filed around the country by citizens demanding the president show the same birth certificate that is routinely demanded of them.personally i agree with and applaud courageous americans like lt col terry lakin, who is jeopardizing his stellar 18 year army career by refusing orders to go to afghanistan on grounds that president soetoro is not authorized to serve as commander in chief as he is not a natural born citizen. see the video below.

        1. David Rogers

          Interesting.Well… Col. Lakin’s video notwithstanding… There is a lot of evidence to contradict every statement in the above paragraph. (I’ll leave it to the curious to Google it, rather than pasting in links here.)But I guess you find evidence for the birther point of view as well.I’ve gotta say, this point does make me see a connection between the suspicion of gov’t enforcement of Net Neutrality (which I’ve been trying to give a fair hearing)… and the staggering level of institutional mistrust (esp. vs. government) that has swept this country in the last year.”Tea Partiers for Verizon?”I’m a believer in innovation, free markets, and as little government as possible (but no less). But I still believe in public schools, public roads, public waterways, and (compromised as it may be) having a FDA to check our meat for e. coli.Given my inclination to see the Internet as a public good (as supported by Supreme Court precedent on issues like freedom of speech online), I’m leaning more towards the argument that gov’t enforcement of a packet neutral net is a necessary role, like the excellent example of garbage collection by philsugar (commenting above).

          1. kidmercury

            If you have evidence of a birth certificate for barry soetoro/barack obama that is signed by a doctor that lists the united states as the place of birth, please feel free to share it.

          2. James

            Legally speaking Obama’s birth certificate does not matter because the presumption is that he was born in the U.S. unless compelling evidence can be provided proving otherwise–like a birth certificate from some other nation. You might not like it but that is the way the law works. Legal proceedings always require evidence to begin (not just a perceived lack of evidence).

          3. kidmercury

            1. i disagree with your interpretation that soetoro’s citizenship is assumed to be american and rqeuires no evidence — by that rational why not assume he is a citizen of argentina? china? mars? — but anyway there is evidence, such as sarah obama, the paternal grandmother of president soetoro, stating that she was present at his birth in kenya.2. even if we assume that president soetoro was born in hawaii, though, there is also the issue that his father was a kenyan citizen at the time of soetoro’s birth (something soetoro admits on his web site). as such, the fact that his father was a citizen of kenya makes soetoro a dual citizen of both kenya and the united states. actually, as kenya was a british colony in 1961, soetoro is a citizen of the UK as well, as the british nationality act of 1948 states that any individual whose father is a citizen of a british colony is a british citizen as well. the kenyan citizenship expired in the early 80s, but there is nothing to suggest the british citizenship has. contrary to popular belief, the term natural born citizen does not refer to simply to one’s geographical place of birth, but also to one’s lineage as well, and requires that the parents be citizens as well at the time of birth. the meaning of natural born citizenship and its reason for inclusion in the US constitution was established in correspondence between john jay and george washington during the drafting of the US constitution.of course, it may be worth considering that the president is supposed to be a public servant — and that a considerable amount of privacy is expected to be sacrificed by public officials. when 400,000+ taxpayers have signed a petition asking for presentation of a long-form birth certificate, i would argue it’s a reasonable request to honor of your employers. disclosure of various records pertaining to his parents’ marriage, all of his school records, his standardized test scores, and his illinois state bar association records is also something i think soetoro’s employers have the right to know, just as employers routinely ask prospective employees to provide such information.

        2. fredwilson

          you are nuts Kid

          1. kidmercury

            lol, well, i guess decorated army veterans with 18+ years service are nuts too, because i simply agree with them on this issue. just put yourself in soetoro’s shoes: let’s say you were president and a growing percentage of the population accused you of not being a natural born citizen, to the extent that multiple lawsuits from around the country were filed against you for this reason. you can dispel them all by showing a real birth certificate (signed by a doctor, so that we can hunt down the doctor and fully investigate) or you can spend $1 million+ fighting these lawsuits. which would you choose? soetoro chose the latter.also, in the 60s the JFK kooks were called nuts. than the 9/11 kooks were (and still are! how sad) called nuts. how many times are we going to make the same mistake of simply dismissing something as impossible without doing the research?

          2. fredwilson

            i am not even going to discuss this with you until you call him by his realnameinsulting our president is not funny to me

          3. kidmercury

            hahahaha……tell you what boss, you provide proof of his real name, which presumably you can find on his birth certificate, and i’ll be happy to call him by that. so please find the real birth certificate, that will shut up myself and most truthers.insulting our president may not be funny to you, but insulting the constitution is not funny to me.

          4. kidmercury

            yes, as i noted in my initial response to fred, that is not a long-form birth certificate. a long-form birth certificate is one that signed by a doctor. here is an example of a long-form birth certificate from hawaii issued in 1963 (two years after soetoro’s birth):…we need to see that, so we can investigate the hospital and the doctor. if soetoro can provide that, he will have dealt a major blow to those claiming he is not a natural born citizen. instead of providing that, though, he has spent more than 1 million USD fighting lawsuits from around the country.truth does not fear investigation.

          5. fredwilson

            this is not about the constitution, it is about respect and you have noneit is pathetic and i feel sorry for you

  17. mdudas

    I understand and agree with the “application-specific” point, but I don’t understand the “classes of application or content” point. If one class of application (ie, high-resolution gaming or video) consumes a disproportionate amount of bandwidth and has the potential to decrease the performance of other classes of application (ie, email, webpage browsing, e-commerce), there needs to be a way to mitigate the performance impact on the affected application classes. I’m not suggesting that “discrimination” or “regulation” is the solution; frankly, metered-usage payment plans is the obvious market-based solution to me.

    1. fredwilson

      you do the network management on the user side not the application side

  18. davidu

    I had dinner with Barbara a few weeks ago and just got a copy of her new book Internet Architectures and Innovation (… ). She and the book are fantastic.She is exceptionally smart and I hope that more and more policy makers start listening to what she has to say.

    1. fredwilson

      me toomy fear is her work is fairly academic and takes work to get throughi hope the people in charge of these issues take the time to really understand her work and her suggestions

  19. JamieEi

    I whole-heartedly agree with your position, but trying to cast it as non-regulation is a distraction. We need legislation that mandates net neutrality and gives the FCC authority to enforce it. It’s no accident that Verizon wants to bar the FCC from regulating the internet in certain key scenarios. Big companies have leverage with politicians who are beholden to them for campaign contributions. They have much less influence over competent regulators.

  20. Guest

    I agree with several other posters – if discrimination by both the actual application and by class of application is prohibited, what discrimination is left?The ultimate arbiter of net neutrality regulations (if any) should be consumer benefit. And consumers could benefit from two types of discrimination by class: either slowing a class of traffic which is consuming sufficient bandwidth to choke other classes at a particular moment in time, or slowing non latency-sensitive traffic (e.g. email) in favor of latency sensitive traffic (e.g. streaming video, VoIP). Banning both of those types of discrimination, even if it’s done transparently, is anti-consumer.

  21. Jake Howerton

    While @andyswan explained the problem of involving the government in this pretty succinctly, there is a practical issue with the Net Neutrality argument as well. All of the Net Neutrality jingoists are attacking a symptom instead of a problem. Remove last mile franchising and monopoly and the need for this debate goes away.

    1. andyswan

      Wireless, or some other extreme innovation in the pursuit of profit, will do this for us. Markets do take time to innovate. Just stay out of the way and don’t let anyone abuse the power they’ve amassed….the stodgy will be the Microsofts, AOLs and Yahoos of the 2010’s

      1. fredwilson

        not if we are licensing off the spectrum to the same people who control the last milegoogle tried to play that game and lost

        1. ShanaC

          they held the wrong cards. So the question is, who has aces up their sleeves right now to steal the pot?

    2. fredwilson

      i’d love to do thatbut i don’t think that will ever happen

  22. aswath

    An addendum to Van Schewick’s rule:1. Such application-agnostic discrimination will be applicable to only the span of the Internet that the provider controls2. Such application-agnostic discrimination will continue to maintain the bill and keep regime.The first is needed so that if a wireless access provider and their subscriber feel it is necessary to have Class of Service on the radio portion it shouldn’t require interconnects or the far-end access provider to support the same class of service.The second is needed to protect the far-end user being charged just so wireless access provider have easier time with their customer base.

  23. Peter Fleckenstein

    Let’s do this – I’ll support Net Neutrality 100% if Fred & other VCs support the following:A non-discrimination rule that bans all startup-specific discrimination, but allows all startup-agnostic discrimination. Discrimination is startup-specific if the discrimination is based on the specific application or startup (e.g. Seesmic is treated differently from Tweetdeck), or based on classes of applications or startups (e.g. Mobile apps are treated differently from desktop apps).I mean if we’re truly serious about net-neutrality then lets go all in and support start-up neutrality where all investment dollars, term sheets, infrastructure, access, etc are made available to every startup equally.Until then, I agree 100% with Andy Swan’s comment.And no Fred, I’m not being a smart ass. I’m dead serious; after all, what’s good for the goose is good for the gander.

    1. JLM

      Fred’s not a regulator.

      1. Peter Fleckenstein

        True. The goose/gander reference was to net-neutrality/startup-neutrality. Fred is a very influential advocate though.

    2. David Semeria

      Nice try.And you’d have a point if every entrepreneur could only approach at most two local VCs.

      1. Peter Fleckenstein

        But if every entrepreneur could only approach at most two local VCs as you say then it would violate the simple rule that I proposed based on the simple rule that Professor Schewick proposed.My point remains intact.

    3. CJ

      Why stop there? I want sex-neutrality too. Everyone should have access to all of the hot chicks and models. Can you send Angelina Jolie over next Tuesday? Thanks.

      1. David Semeria

        Not possible. Angelina is totally chez Davey next Tuesday.

      2. Peter Fleckenstein

        No problem! BTW under the neutrality rules you have access to Angelina any time you wish. ๐Ÿ˜‰

      3. ShanaC

        ……………………………………………Remind me never to show up to a tech event dressed really well….

        1. CJ

          As if it would matter, you’d grab all of the attention regardless of attire Shana… ๐Ÿ˜‰

          1. ShanaC

            Clearly you don’t go to the same events I do. Maybe it’s because I’m stillslowly coming out of parts of my shell- life in your 20s is like that.

      4. Tereza

        If boy VCs learned how to more attractively interact with girls — as in, more attentive and kind — I think they’d be delightfully surprised at the amount and quality of “access” they’d get.Unfortunately for them, blustery and self-serving just doesn’t do the trick.

        1. calabs

          Depends on the girl. Many attractive girls have low self-esteem and are quite obsessed with status. They see kindness and attentiveness as weakness. For them you are better off with a good suit, an expensive car, and a bad case of narcissism. Cocaine doesn’t hurt, either.Attractive, intelligent, emotionally stable (probably professional) women are usually quite successful themselves, and more often than not pick men who are essentially similiar. Kind attentiveness is, for them, a “nice to have” but not really a requirement – they are, after all, self-sufficient, thank you, and are comfortable asking for what they need.Nurturing women do indeed appreciate kind attentiveness, as they are usually uncomfortable asking for what they need or want. However, good-looking nurturers are pretty rare, at least in the US. They seem more common in Europe. (I think this is because good-looking girls wield a strange sort of superpower which is inversely proportional to the surrounding culture’s level of sexual repression. And as we all know, power corrupts.)

          1. Tereza

            That’s quite elaborate. Sounds like you’ve experienced quite a lot of different kind of women!

          2. ShanaC

            You know the secrets of why it is so hard to date….wow…..

    4. fredwilson

      are you suggesting i should fund every startup Peter?because i don’t have enough money to do that

      1. Peter Fleckenstein

        Lol. What I am suggesting Fred is that if one believes in net-neutrality then they should have no problem in supporting start-up neutrality. I suggested that all startups have equal access to all VCs.If the FCC implements their net-neutrality will I be able to go to Amazon, Rackspace or anyone of the cloud providers and say to them – “Hey you are not providing equal access and you are in violation of FCC Net-Neutrality?”. Will Amazon or others then have to ensure that their is absolutely no tiered pricing? What effect will that have on innovation?We are going down a slippery slope with FCC Net-Neutrality. It can only get uglier if it’s implemented.I think this is the most important point – The court ruled the FCC does not have any legal authority to implement net-neutrality. The rule of law is still sacrosanct in America.We have laws right now on the books that deal with monopolies and duopolies let’s use them first before opening the FCC’s Pandoric Box of Net-Neutrality.BTW – At the prolific rate you are going with your amazing investments I would expect USV to become very flush with cash. Although not enough to fund every startup, you’d be getting closer. ๐Ÿ˜‰

        1. fredwilson

          i don’t understand your point and i am trying hard

          1. Peter Fleckenstein

            Maybe I am being smart-assish. Ok. Direct & 2 the point:1. We don’t need more government intervention We can use existing laws – Sherman Anti-trust & Robinson Patman Act for starters.2. FCC’s net neutrality is a door opener for more regulation. The Federal government has proven that over and over again with other regulations.3. The internet is not a right for anyone. It is a service that should be paid for accordingly by those who use it accordingly.4. The people who do use and pay for the internet will influence & decide the providers of the internet. Shana pointed that out in AT&T’s nightmare wireless tiering promo.5. The message to the FCC and the Federal Government should be: “Laissez-nous faire” – Let us be.I hope I was clearer this time around Fred. This is not a joke to me and I know it is not to you. Let’s do the correct thing instead of the most expedient one.

          2. fredwilson

            most expedient thing is to let google and verizon solve thisi am not arguing for the easy thingi am arguing for a very hard thing

  24. JLM

    Face it, the Internet will be regulated.Why?Because the Congress is composed of whores to money and power. And there is a lot of money and power at risk here. A ton!The Devil — pick your side and pick your own Devils — will provide ample temptation to the truly powerful to stack the deck in their favor.At the end of the day, hasn’t the Congress and all politics simply devolved into a huge casino in which the Congress’ thumb is on the scale in support of whichever special interest has greased its palm?Congress no longer legislates — it picks the winners based upon who has supported their venal interests most.Sad. True. Stop being naive.The latest Sup Ct ruling allowing corporations to directly participate in election fundraising is only the beginning. Can you imagine how powerful any industry group has the ability to be?It used to considered funny to refer to Sen Biden as the Senator from MBNA — not so funny any more!

    1. ShanaC

      are we rome? if we are, when can I expect the senate to declare an emperor?I’d like to think that we still function with a modicum of democracy here

    2. fredwilson

      i am not being naive JLMthis is my blog and a lot of people read itit is one way, but not the only way, that i am trying to influence this debate

      1. JLM

        In fairness, I really was not speaking directly to you but rather to the collective audience — US, each and everyone of us.Even when we might disagree on something, it certainly is not because of naivete. You are one of the best informed chaps at large out there.I am squarely in the camp of net neutrality but am simply noting the propensity for the Congress to have its opinion influenced by whomever has the most ability to influence it — those who are able to most effectively lobby.Lobbying — effective lobbying — is both a skill and the result of the sheer magnitude of the money involved.I fear the impact of the recetn Sup Ct decision on the rights of corporations to directly participate in Federal elections because they have effectively short circuited the lobbying process. Now, a corporation will be able to hire its Congressmen directly with a laser like focus on the most ‘inexpensive’ jurisdictions in the country.Why go after a Senator or Congressman from Texas, California or NY when Montana, Wyoming, S Dakota has the same votes and will cost a bunch less.

    3. James

      Internet access is already highly regulated at both the federal and state levels. This is something that many people do not seem to realize. The discussion about “whether” to regulate the Internet happened decades ago. The net neutrality discussion is about “how” to adjust regulations in the face of technological or market changes.

    4. Morgan Warstler

      JLM, the Citizen’s ruling is deregulation. Its a huge win for free markets. Just watch.

  25. Pete

    Nice quote by Schewick. Bandwidth is a utility and the government should protect it as such. Should the power company be allowed to charge more for the electricity that runs your computer vs your blender? Or the water company charge more for the water you drink versus the water you use to take a shower? Who would accept this type of “application discrimination”? Internet bandwidth needs to be protected and regulated just like other public utility.I like the idea of proactively writing this idea into law, rather than dealing with it after the fact, via anti-trust, per @andyswan’s suggestion. Anti-trust suits take years, which are lifetimes in tech.Pete

  26. Dave Pinsen

    Fred Wilson today:Venture backed startups and venture capitalists don’t use regulations and lobbying as competitive advantages. We don’t have armies of lobbyists. We don’t have congress on our payroll.”Fred Wilson last month:Last night my partners and I hosted a fundraiser for NY’s senior Senator Chuck Schumer.And in the comments:I’ve had dinner with chuck and his wonderful wife a number of timesAre we to believe you have never used your access to lobby for policies you consider beneficial to your firm or your portfolio companies?

    1. ShanaC

      he’s got a point.

    2. David Semeria

      Valid point.But you were only able to spot the apparent contradiction because of Fred’s openness.Is it not a tad ironic that a man who preaches liberal access leaves himself vulnerable to criticism by virtue of that same liberty he defends?At the very least we can’t say he doesn’t practice what he preaches….

      1. Dave Pinsen

        Not really. Blogging extemporaneously, as Fred does, doesn’t automatically absolve him of any hypocrisy.________________________________

        1. fredwilson

          it is not hypocrisyit is the truthwe don’t have armies of lobbyists. i’ve never hired onewe don’t have any lawyers on our payroll here at USVi can’t fight that fight and win

          1. Dave Pinsen

            It’s not hypocrisy if you’re not against lobbying in general (which I’m not, btw). But you not having or hiring “armies of lobbyists” is a distinction without a difference. The point of hiring lobbyists is to get access to politicians such as Chuck Schumer. You already have access to him, so you don’t need a lobbyist for that.________________________________

          2. fredwilson

            one guy. i need 50 of his friends in the senate and god knows how many house reps. i don’t have the time or money to accumulate that kind of friend network

          3. Dave Pinsen

            Fred,Fair enough.BTW, I typed my previous comment in this exchange via e-mail; this one I’m typing directly on your blog. When I respond via e-mail, the text formatting usually gets messed up when it appears on your blog. Just an FYI, in the event you or Daniel weren’t aware of this issue.

    3. fredwilson

      i’m trying to catch up to the carriers Davei’ve got a lot of catching up to doi have never hired a lobbyisti don’t even know one

      1. Dave Pinsen

        You don’t need a lobbyist. You already have access. You are, in effect, your own lobbyist.________________________________

        1. Evan

          there’s tons of lobbyists on net neutrality already. it’s not an under-lobbied issue.

          1. fredwilson

            yes and if you look at the records, the access providers have us outspent by10x at least

      2. ShanaC

        if you need one, I actually know of one who probably would be a fit.

      3. ErikSchwartz

        I play poker with one of Google’s lobbyists (that’s not his technical title). I’d be happy to introduce you.

      4. PhilipSugar

        I have for Mitsubishi Corporation when they acquired Aristech. I was 22……worse than going to a whore house…..paid well over $1M….dirty, dirty, dirty… me and I’ll give you the names.

        1. fredwilson

          i prefer to do it this way. i can’t pay lobbyists without feeling dirty. ineed to look at myself in the morning.

  27. Alex

    Is this not a bit of a contradiction? Not regulating the internet, what you’re asking for, would lead to massive amounts of content, but those big companies (Google, Verizon, etc.) becoming a sort of “data monopoly.” Leaving the internet to laissez faire means allows for companies to monopolize access.Net Neutrality, on the other side, requires regulation – it necessitates the governmet (some bureaucratic agency) insuring that every internet player has the same access to the consumer and vice versa. Without regulation, net neutrality is impossible: eventually big companies swallow up large parts of access and monopolize what content gets through. Regulation of the internet can stop just that.

  28. Harry DeMott

    This is one of those hot button topics that everyone has a passionate opinion about – and it is somewhat difficult to wrap your mind around when you look at it from both sides.On one hand, I agree completely with what Fred writes and the premise behind the Stanford Law professors comments.That said, and this is to me where it gets hard to understand, you have to actually differentiate between the content on the web – i.e. all bits are equal – and the mechanism to deliver them to a consumers device.Strangely, I actually believe that Verizon, Google, TW Cable and consumers are all on the same side of this argument – none of them have a vested interest in discriminating among the differing web sites and services that are out there.where they do differ, and where people get all up in arms, is how they ration the flow of that information to your specific device.It is very evident that there is not nearly enough spectrum to do effective wireless broadband – particularly as more and more devices become network enabled. Thus, those who have a vested interest in protecting that network want to make sure that network quality is not degraded, on average, which leads to practices that people label as non- neutrality. Whether you are streaming porn videos or videos of your cat playing with a ball of yarn is of little difference to the network manager at Verizon Wireless – they are both taking up enough bandwidth on a particular cell tower that the service degrades for everyone else.Same goes for the cable modem architecture in the U.S. It is a shared architecture – with limitations on shared bandwidth. If someone sucks up all the bandwidth as a video server – the others will be limited.I see nothing wrong with allowing the network operators to ration access by usage – which is – I believe – exactly where we are going. You want to inconvenience the people around you by streaming movies all day – fine, but you are going to have to pay for that privilege (and those excess payments will ultimately go toward the splitting of that node – or the erection of another cell in the area)What is interesting is that we live in a world of non neutrality in media right now.Think of a wired phone call – it travels over a dedicated copper wire – or fiber optic line – or as a dedicated channel on a 6Mhz QAM on your cable modem. There’s no degradation of the service – and there are very few instances in the US when the call cannot be completed with the same level of voice quality regardless of the number of users on the system.Think about cable. What is ESPN, but a dedicated 6Mhz slot on a 750 Mhz cable system – or the equivalent on a satellite dish. ABC is the same – and so are any other channels you match every day. there’s no collisions and no service degradation – because it is a one way signal – and it has a superhighway to your home.When we go to an all IP architecture in cable – we will end up in a switched digital world – and collisions will start happening at the edge of the network – with the major channels still protected in a superhighway like manner. Watch ESPN HD and you are int he fast lane – watch Nick 8, and you are on the service road of the LIE at rush hour on Friday night on the way to the Hamptons.The question is whether we as individuals – or as individual device users are going to be able to get our own dedicated access to the specific websites we frequent (and really how many is that on average? 20? 40? 100?) versus having equal access for everything.And whether people can understand that the laws of physics will dictate what we can and cannot do regarding mobile.Strangely, I’m guessing that if you took the top 100 websites int eh US and gave them each a dedicated superhighway into the ISP’s – the average performance of the web would improve for most users – and you could still get at everything else.Isn’t that what the premise of Akamai is all about? Taking the most popular content and moving to mirrored servers closest to your location?Isn’t that ultimately what everyone really wants?

    1. fredwilson

      CDNs are greatbut they don’t control the last miledo you want Verizon doing the Liberty Media game to web services Harry?

      1. Harry DeMott

        Nope – would never want to see that happen.One of the things about the web, which is vastly different from cable – is that cable had at max – 150 channels – and 30 of them were really all you needed on average – where the web is somewhat infinite – and while everyone wants Google, Yahoo, Ebay, etc… if you look at everyone’s top 50, they are likely to be pretty different.So nope, don’t want Verizon to do that.However, I am okay with paying for bandwidth – heck I’m in favor of individual responsibility in every possible way in life. If I use more electricity I should pay for it. If I use more water, I should pay for it. If I use more bandwidth, I should pay for it – and I don’t see why people should feel that it should be unlimited and incremental usage should be free.My guess is that if Verizon could get people to accept that argument and Time Warner Cable could get people on board with that – then we wouldn’t have a fight about net neutrality – because tiered pricing is really what people are arguing about – not whether Google is going to be given priority over Ask simply because they paid for it.I’m with you on the other point – if large companies can start paying for preferred access – that will hinder innovation (I think you did see this in cable) – and I would hate to see that.

        1. CJ

          We pay for bandwidth now. Asking for metered bandwidth is akin to the situation in professional sports where the owners want a luxury tax or salary cap because they can’t stop themselves from spending their own money. Metered bandwidth was the default way to get internet access for a long time but it wasn’t conducive to growth so it was shelved by the providers in favor of the current unlimited plans that dominate. Now they want to change because unlimited plans aren’t as conducive to profit as metered plans when you’re dealing with a customer base that’s addicted to cheap internet. Of course, it would backfire and hurt the access providers in the long rung but not before it stagnates all innovation in the space and kills off the only area of the economy that seems to be working right now.

    2. ShanaC

      oddly, I like your comment. Problem is what was tops on the web while I was growing up has almost no relationship to what is tops now. I suspect that will change again when I am in my 30s, 40s, and 50s. How do we make sure it all works rather than goes to some sort of strange auction that limits innovation (and normally I am for auctions, but I think this one will price most people out the market to innovate)

      1. Harry DeMott

        I think my comment back to Fred perhaps better sums up my position.Over time, I do think that we will perhaps get some sort of tiered service where we as consumers can pay for a fast lane to our homes or businesses – and then we can pick and choose which websites will get priority access to that fast lane – with the remainder of the traffic flowing over the slower part of our pipe. that would be an interesting customer proposition. Thus if I were working at home and was using Bloomberg (a heavy data application) and my kids were downstairs streaming a movie – I could dynamically allocate bandwidth on my end to make sure the work stuff went fine – and everything else went to the kids.that is probably a much more palatable option for consumers – and would potentially alleviate consumers fears.

        1. fredwilson

          what you propose is exactly what we need

        2. ShanaC

          I think this is a slightly better summation, as it makes clearer the value prop.I don’t think people inherently have a problem paying for bandwidth if they understand what they are doing with it. It’s one of the reasons AT&T wireless tiering promo is going so badly- it’s hard to explain how bandwidth works as a value prop versus what you do with it.

          1. Harry DeMott

            Monopolists are traditionally very bad marketers.It should be so easy – and they always screw it up.

          2. ShanaC

            Question of the night: I have tons of energy to be able to invest in doingsuch a crazy task for such a company. (joys of youth). What’s the best wayof reaching such people so that I can go to the microphone and go *tap tap*”We’re not stealing your Youtube, ever!!!!!!” “You get to control yourbandwidth with our neat tools”Or something along those lines.

          3. CJ

            No, I think people have a problem with paying for something they think should be cheap or free. What will happen is people won’t browse the net at home anymore, they’ll just use their office line and providers will see their subscriber numbers plummet. The internet caught fire due to cheap bandwidth, if you remove that lubricant, the entire machine stagnates.

          4. ShanaC

            Companies do monitoring. And now they expect people to be on the go.It very much depends how the tiered pricing is done. If you are getting agood deal of bandwidth for not so much, good. If you are a techie and needevery high tech device to suck bandwidth juice, then we are already in asystem where most people are Overpaying.It’s like this funny statistic I once heard about one of the major techblogs. They’re not paying for the space anymore, the space they use isminiscule, they are paying for some more cpu time though, but that usuallycomes included for most people. Most people, as a result, overpay forstorage for their websites!

  29. Tony_Alva

    Amen brother! My company is a strong supporter of net neutrality and is fighting the good fight!

    1. fredwilson

      tony!how are you?everything cool with you and your family?shoot me an email

  30. Aaron Klein

    Rough day in Fredland, indeed. :)This is a really tough issue because if we have to choose between big government and big business, we’re equally screwed either way.I have zero trust that big government can be effective in fixing this problem but I know AT&T and Verizon don’t want to. They have every interest in using public assets to dramatically increase their level of private gain.And yes, they are partially public assets. They are using OUR public rights-of-way and OUR spectrum to deliver access to the Internet, which they do not own and did not build.I’m thrilled to death they are making a profit doing so. More power to them. I hope they make big profits.But if they are going to use our public rights-of-way and spectrum to make those profits, I think it’s fair to ask them to deliver a completely free and unhindered playing field for other companies to innovate, compete and make profits too.

    1. Aviah Laor

      you can always fall back to big army ๐Ÿ™‚

  31. Kenneth R. Carter

    Fred, you correctly note that the collapse of competitive options Internet access options is the source of the Network Neutrality issue. Back in the dial-up world, competition was possible due to FCC rules, such as the Computer III decision, which mandated open architectures and unbundled access. (I believe I have commented on the Computer Inquiries previously on your blog). Such rules requiring openness no longer exist for the broadband world.Further, you point to Prof. Van Schewickโ€™s excellent work on non-discrimination. There is a long and rich history on non-discrimination in communications. Indeed, an 1848 New York State law mandated that telegraph companies provide non-discriminatory service to individuals and to competing telegraph companies. (Substitute the word datagram for telegram, and you have a Network Neutrality regulation.) In the EU, non-discrimination is part of the Framework Directive for Electronic Communications. The problem is, however, when it comes to systems as complex as DNS and TCP/IP it is very hard to craft effective, enforceable rules for such broad principles.Since, as you point out, the root-cause problem is a lack of competition, we should focus on fixing that problem first. Once there is sufficient access network competition, Network Neutrality issues become far less problematic. I discuss how to address in my recent blog post:….

    1. fredwilson

      i totally agreebut is true competition in the last mile ever going to happen?

      1. Kenneth R. Carter

        Yes – perhaps not in the least urbanized areas. However, if the right unbundling rules are set, there will be reasonably decent facilities- and service-based competition for most of the country. That is the state of play in most industrialized countries. I live in a *small* suburb outside of Bonn, Germany. (It’s famous for a medieval castle, the home of Konrad Adenauer, and the Birkenstock HQ). For my ISP, I have a choice of a cable provider, Deutsche Telekom and about three or four service-based (undbundled local loop) ISPs.

  32. Aviah Laor

    It’s not about regulation, it’s about protecting people rights.NN is just a start for on the slop. The carriers are the engine for a train of industries that will happily pick this single point of billing to offset the gains consumers have from the Internet.Next, the music industry will request the carriers to charge more for their content, next we will see Apple like policy to take a cut from the websites income etc.Again, everything that blocks “fully informed” is not capitalism

  33. Dave Broadwin

    Another great post, which is why there are 119 comments as of now, So, I apologize if I am duplicating a comment I have not read. The internet (and broadband in general) could not exist without the consumption of limited public resources. The most obvious example is broadband spectrum — there is a fixed amount and, like real estate, they aren’t making any more of it. The notion that a handful of companies should be able to corner a limited public resource (as the carriers would like to do) should be anathema to all of us. If they are permitted to do so, it would amount to letting these companies regulate the internet. That would be worse than the government, which at least purports to be working in the public interest. Here is a bit of a tangent — a different kind of tragedy of the commons. Would your cow get any grass if a few big herd owners were allowed to control access to the commons? The commons needs to be available to all on some fair basis. It can’t be controlled by a few whose economic interest is to exact a toll for use of a resource that isn’t theirs in the first place. (I know carriers (and others) invested in the infrastructure and need a return so it isn’t as simple as I am making it out, but this is the gist of it.)

  34. Venkat

    Such crystal clear positions have a way of being eroded over time as people come up with clever corner cases, analogies to precedents etc. I am neutral on net neutrality, because frankly, I don’t understand the issue well yet. I don’t think it is a purely moral issue, and there’s probably a hidden coupling between sector economics, player profitability, and content-based discrimination, and potentially things like a tragedy of the commons where we want net neutrality on the one hand, but are not willing to pay for it on the other…. kinda like the place journalism is in now. And then government gets in via taxation based subsidies, like the national parks, and that’s another route to regulation.Not being contrary or playing devil’s advocate here. Just trying to outline the things I don’t know, and which nobody has explained to my satisfaction yet. I’d like a deeper analysis by somebody of such questions as:1. If there is a free-to-air and cable distinction in TV, why not on the Net?2. Can carriers be profitable with net neutrality in theory, given supply demand curves? Is Wikipedia free-riding on CNN in some hidden way? 3. Are there hidden ways the net is already NOT neutral?4. Is net neutrality the equivalent of handing over the keys to the city to spammers and botnets?5. What if there is a technology-based solution that circumvents this and renders it moot, like a descendant of Akamai that puts specific traffic flows onto a tollway backbone maintained separately, and billed separately? Etc. Etc. Maybe somebody has already thought through these sorts of what-ifs. If so, I’d appreciate a pointer to a good resource/set of resources. This needs a book-level treatment of the quality of Jonathan Zittrain’s “The Future of the Internet” (I learned a LOT from that book).Venkat

  35. ShanaC

    Off-topic. The twitter button works.

  36. Guest

    Is Barbara van Schewick’s quote found in a larger research paper? If so, would love to know the cite and read the whole thing. Thanks!

    1. fredwilson

      you can find it here…

  37. David Rogers

    Thanks, Fred for the post. I like your p.o.v., and love the multi-sided discussion it’s sparked.What I’m wondering is: Does anyone have a historical perspective on this? Specifically:Why have we HAD net neturality for decades, if it was never mandated?Why didn’t the ISP’s start this business (discrimination in packet switching as a business model) ten years ago?Did they every try? Was it prevented by the government? Google? A technological hurdle?thanks,David

      1. David Rogers

        I just ordered the book!

  38. Rurik Bradbury

    Totally agree — the argument between applications and protocols/stream type is usually muddled. Anti-discrimination is the right angle.

  39. Carole Copeland Thomas

    I completely agree with you on this one. Minimal regulation will allow the full potential of the Internet to be explored by a worldwide group of users, not a select few. Net neutrality all the way.

  40. Steven Kane

    gently – i think you are letting ideology diminish the integrity of your advocacyi am a huge proponent of net neutrailitybut it *is* regulation.and what the heck is wrong with that?you cite Barbara Van Schewick’s call for “a non-discrimination rule”last time i checked “rule” and “regulation” are pretty much interchangeableso why do you feel the need to assert some kind of ideological purity (eg “i’m against regulation”) as a qualification for your support for net neutrality?net neutrality is the right thing. regulation or notcome back to The Far Center — where jargon and ideology do not prevent you from simply, freely advocating what you think is right

    1. fredwilson

      i guess i have spent too much time in washington lately Stevedown there, it is all about spinunfortunately

  41. darose

    I don’t think Ms. Van Schewick’s definition is nearly sufficient. Source-specific discrimination and target-specific discrimination (i.e., discriminating again traffic based on where it’s coming from or going to) can be just as damaging – maybe even more so.Imagine a network provider shunting traffic to Google over slow network lines in order to extort – ahem “generate revenue” from them. Or having some other provider do similar for network traffic coming from Time Warner RoadRunner customers in order to make them pay up for access to a popular site.Sorry – that’s not net neutrality.

  42. Vijaya Sagar V

    Fred, App-agnostic discrimination is quite common. The Hiltons and Radissons don’t have to put up “Not open for Blacks & Hispanics” boards. Their pricing automatically eliminates those sections of the population that cannot pay. That is colour/race-agnostic discrimination, based purely on purchasing power.People have already been trained by the utility companies to pay money for natural resources that are supposed to be “free” – cleaner air & water for instance. The Internet has ceased to be a free natural resource ever since it left DARPA and became a commercial interest. So, a tiered access structure for the Internet is quite sensible for those who are pricing it. Hard to argue other wise, and fight for a discrimination-free world, without running the risk of being branded as a communist.However, resistance is good. However futile. It tells the world we have our hearts in the right place and lets us write thought provoking but [probably] ineffective blog posts.

  43. marun

    Competition is not sin. We have too much regulation for anything nowadays.

  44. Michael R. Bernstein

    Fred, The simplicity of that NN principle appeals to me, but it still allows discrimination against classes of application that compete with carriers’ business interests. This rule would not prevent Comcast’s interference with Bittorrent, nor would it prevent AT&T from discriminating against *both* Skype and Vonage to eliminate competition with their landline business.

  45. Timothy Post

    Internet traffic has three attributes:1. Speed2. Quantity3. TypeNet Neutrality simply says that internet providers may not distinguish or discriminate based on the type of traffic they transmit to customers. Full stop.

  46. Rahul Sachdev

    I believe that the right answer is a different pricing structure (and *not* different treatment of network traffic) for different content / application types. Telcos often claim that they are continuing to upgrade their network infrastructure due to increrasing demands from bandwidth intensive services (e.g. video, voice) and hence net neutrality rules need to change. I think is a fallcy. Telecom is a competitive market and carriers can always incorporate the cost of network upgrades into their pricing model. However they choose not to or lack the ability to easily price differentiate based on usage. So their response is to give preference to certain data (and partner) types i.e. invest in new toll roads for new partners and send everyone else can take the slow lane.

  47. Rahul Sachdev

    I believe that the right answer is a different pricing structure (and *not* different treatment of network traffic) for different content / application types. Telcos often claim that they are continuing to upgrade their network infrastructure due to increrasing demands from bandwidth intensive services (e.g. video, voice) and hence net neutrality rules need to change. I think is a fallcy. Telecom is a competitive market and carriers can always incorporate the cost of network upgrades into their pricing model. However they choose not to or lack the ability to easily price differentiate based on usage. So their response is to give preference to certain data (and partner) types i.e. invest in new toll roads for new partners and send everyone else can take the slow lane.

  48. shaggy

    Fred, I am curious as to how you feel about some VOIP providers blocking other services. Case in point MagicJack users cannot join conferences because it is blocked. Even accessing the service through Google voice (with it ringing the MagicJack number) it is somehow re-routed to MagicJack which directs you to its free conference call service…. In my opinion it is extremely annoying and counter-productive for all parties: users and companies.