Open Internet Rules

The FCC is expected to approve its Open Internet Rules today. This is a big deal and something we have been fighting for since former FCC Chair Michael Powell unfortunately and incorrectly ruled that Internet Access was an “information service.” We believe that last mile Internet Access is a natural monopoly/duopoly in most geographies and needs to be regulated as such.

My colleague Nick Grossman has a good quick read on about these rules, why we are strongly in support of them, and what this means.

As Nick says in his post,

We believe in markets. We believe that by recognizing that access to the Internet is an essential service, the FCC has moved to protect the free and open markets that depend on that access. Contrary to much FUD, this is NOT regulating the internet, it’s ensuring open access TO the Internet.


Comments (Archived):

  1. JimHirshfield

    Open Internet…Rules!

    1. Rick

      Money rules! The internet is just another way to make money.

    2. kev polonski

      I like how POTUS is consistent. Pass Obamacare to find out what’s in it. Pass ObamaNet – otherwise called net neutrality to find out what’s in it.I’m sure there is a prof. Gruber some where laughing at the foolish American electorate.

  2. William Mougayar

    This is great and should be celebrated, but the ISPs are still the control / choking points for our access. An ISP can set usage policies in their terms and conditions that restrict speeds or specific sites access depending on the time of day or their own traffic patterns (like peak hours, etc.).So we are still at the mercy of the Internet providers, aren’t we?

    1. Sebastien Latapie

      That is still my biggest gripe: I only have one choice in my area and that is comcast. And I’m living in Cambridge a few blocks away from MIT in one of the biggest startup center in the US… just unacceptable.I suffer from all that you describe, but don’t have a choice. I definitely feel at the mercy of internet providers.

    2. JimHirshfield

      Well, this looks like a move in the right direction, at local level…”FCC overrules state laws to help cities build out municipal broadband”…

    3. Rick

      You can stop using the internet anytime you want. In fact the only reason this discussion exists is because people *choose* to use the internet..Stop wasting time discussing this and start figuring out how to make money from any changes that come along.

    4. ShanaC

      which isp? there are isps to isps. this is going to get more interesting

      1. William Mougayar

        I’m sure there are good ones, but I haven’t met them yet.

  3. Tom Labus

    This will be twisted into a calamity by the GOP and the Cable Cos. Someone who knows this inside and out needs to go on CNBC and Bloomberg and make the case. It has not been done as yet and anyone who has come has gotten run over

    1. JimHirshfield

      “This will be twisted into a calamity…” within this comment thread.#prediction



      1. LE

        Nice chyrons. Photoshop, gimp or Pixelmator?

        1. FAKE GRIMLOCK


          1. LE

            Time to ditch that CRT, the aspect ratio not HD.

      2. fredwilson


      3. kidmercury

        pretending this is a partisan or ideological issue is what folks do when they don’t have facts to support their view.

        1. FAKE GRIMLOCK


          1. kidmercury

            here are the facts:1. the internet is getting faster2. the proposed rules impact more than the last milelet me know if you dispute these facts, or if you have facts that you find relevant to substantiate your view.

          2. FAKE GRIMLOCK


          3. kidmercury

            i’m not replying to the factuality of that statement, i’m replying to your attempt to shift the conversation from one centered on facts/data pertaining to net neutrality (which you are continuing to do).clearly stating the problem and supporting it with data is the way to make a scientific argument that avoids pointless political debates. of course, if you are married to ideology and partisan politics, that won’t be a course of action that is of interest.

          4. Rick

            Kid you do know that FAKE GRIMLOCK is just here to provide entertainment. Right?.His comical witty comments can’t always be factual.

          5. kidmercury

            i don’t find the humor value to justify the distraction away from real issues, but i suppose few if any care to discuss the facts anyway.

          6. Rick

            I love to discuss facts. I’ll go first….This is all about money. Either lobby money or whatever. The internet is not broken. If we have enough competition in place then the pricing will take care of itself.

          7. Rick

            Oops… Your turn.

          8. Donna Brewington White

            I think you underestimate the Grimster.

          9. FAKE GRIMLOCK


          10. kidmercury

            you snidely attacked the GOP in a conversation about net neutrality. if people focused on the problem and the facts, that would be more productive. unless, of course, internet access is not their goal…….

          11. Rick

            There is no problem except that we need to have more competition. In our system, capitalism, the markets take care of themselves via competition. No regulation is needed. We just need funding for the people who would like to compete against the big players.

      4. JamesHRH

        Is this a screen grab from your audition tape to replace John Stewart?

        1. FAKE GRIMLOCK


  4. Jordan Thaeler

    The government does not grant rights; it only takes them away. It limits what you can do, and this is a horrible idea.

    1. Matt Zagaja

      Spoken like someone who has never visited their town or city land records office.

      1. Jordan Thaeler

        Hmm perhaps they receive tax dollars, taken from us, to provide those services? Just an odd thought.

  5. andyswan

    5 questions:1. If this is about “last mile” in “certain geographies”, then why is it being handled on the Federal level, and why does it apply to over-the-air services as well?2. Why should we trust the same entity that spent $2,000,000,000 on a 404-error to regulate the internet?3. Why should an unelected panel of 5 people be trusted with this responsibility instead of the duly-elected Congress?4. At what point do liberals decide that the private sector has made something so good that it is now to be classified as a public “right”? What other services/products could this apply to– LASIK eye surgery?5. Why do you believe that government is the grantor of rights, rather than the protector of those rights? Do those in the internet providing business have no right to innovate and compete as they see fit? Can you at least admit that this is limiting the liberty of the few?BONUS: Since this rule is in response to current, potentially temporary market conditions…. What level of competition or service would satisfy Net Neutrality supporters so that the FCC rules could expire if/when those market conditions are met?Thanks in advance

    1. Rick

      None of it matters. Either stop using the internet or start figuring out ways to make money from the changes.

    2. Richard

      One of the best lobbyists on the planet (telecoms) lost the battle but does anyone doubt that they will win the war? Trojan horse?

      1. Nick Grossman

        heh I love the deeply cynical angle. not that i disagree with it

    3. Matt Zagaja

      1. They can.2. The same reason we pay a company that can’t schedule an install in a 1 hour window to give us the Internet, it’s the best we can do. It’s superior to the alternative.3. Congress delegated that authority. What Congress giveth, it can taketh away if and when it chooses. Typically Congress likes to delegate things like this that require subject matter expertise.4. These are the kinds of questions that do not have bright lines, but I think it’s fair to say the pace is glacial. ARPAnet came to being in the 1960s and it is now 2015; so 50 something years later the world changed and we had to adopt our regulatory structure to fit that new world. The base of the Internet was actually built with DOD funding and then extended by these private companies.5. I assume that’s directed to Fred, but it pre-supposes a conclusion that simply is not true, or at a minimum not widely accepted. This is the government protecting the rights of the people.

      1. andyswan

        Appreciate the answers. For me “they can” and “it’s the best we have” aren’t good enough reasons to give feds the keysI guess I’m just glad the gov’t didn’t decide to declare that my dial up service was a “right” in 1999…

        1. Matt Zagaja

          The first answer was short and unexciting, but the history of tackling problems related to jurisdiction and power is long and complex. There are lots of Constitutional Law cases on it and we spent tons of times on it in law school. Ultimately comes down to the agreement of the scope of power by SCOTUS, Congress, and the Executive Branch. Up and down the jurisdictional chain a lot of people are convinced they know better on a litany of issues. The federal government often wins these battles.The second answer is maybe more depressing. However given the fact that all organizations are run by people, and people often make mistakes or suffer from flaws, any lawyer worth his salt can make a case that an institution is not fit to do something.

          1. Rick

            It’s all about money. The internet isn’t broken. People have found another debate to argue for years while taking in lobby money etc. That’s all this is..”with his salt”.It’s “worth his salt”. Many years ago, just yesterday really, people were paid partly in salt. So they would say is he worth his salt.

          2. Matt Zagaja

            Oh I know the expression, just sadly suffering from typos and lack of proofreading over here.

          3. Rick

            OK. Just thought I would help you out if needed.

        2. JoeK

          Title II is not about declaring a service as a right, but rather as one for which it is in the public interest to maximize competition, fairness and minimize discrimination (I paraphrase).

          1. andyswan

            How does Title II maximize competition? By turning ISPs into the freakin water company?

          2. JoeK

            If that’s your biggest worry, then you’ll be fine, 10 years from now ISPs will be ISPs, and water companies will be water companies.They will still do exactly what they have been doing for the last two decades, transporting IP packets from your home gateway to their peering gateway (and vice versa), irrespective of what information those packets carry.This is not about stipulating what the utopian view of the telecommunications industry should be, but rather conceding that it currently appears to be, in the interest of the majority, to regulate broadband access to ensure that the status quo is maintained. The alternative is simply less desirable.

    4. Guesty McGuesterson

      1. That is a good question. I would like to know the answer to this as well. One possibility that comes to mind is that spectrum is scarce in a similar way that physical real estate is scarce, and when we discuss allocation of said spectrum to private entities I am more comfortable talking in terms of “this is a public resource that has been placed in the custody of a private entity for the purpose of benefiting the public” than “the private entity is the ‘owner’ of the spectrum”.2. Not sure what you are referring to here.3. Also a good question, to which I don’t have a good answer. Unfortunately the duly-elected Congress has, as a practical matter, been elected by money from a rich few, which is another (larger) part of the same problem we are facing.4. Also a good question, which you could just as well ask about electricity and clean water. My sense is that this is a good way to handle it. I would be interested in knowing about any experiments that show us what the world looks like if those things are regulated vs deregulated.5. How are “government as grantor” vs “government as protector” different in practice? I can certainly see how they are different as a philosophical matter, but either way the government is taking some action on behalf of some perceived rights, wherever people think those rights may have come from.

      1. andyswan

        If gov’t is grantor of rights, it can be logically concluded that it can revoke those rights, and that it can use the threat of force to compel people to provide those “rights”.Example: You have the right to speak (protected) vs you have the right to be listened to (granted, enforced upon others)

      2. Rick

        I think Guesty McGuesterson should become a regular character here. Like Fake Grimlock.

    5. LE

      3. Why should an unelected panel of 5 people be trusted with this responsibility instead of the duly-elected CongressI’m personally in favor of a horse by a small committee rather than a horse by a large committee. [1][1]

    6. Dave Pinsen

      6. How long until the Feds start regulating Internet content?

      1. andyswan

        They’re already eyeing political speech on the net

    7. Dave W Baldwin

      Thanks Andy for posting something that points to healthy discussion.Fred, I’ve been waiting over the past week for you to post something about the concerns being expressed over the secrecy and so on.So, its come down to, “Hey we made that final mile perfect, trust us!” I’m disappointed with the manner this was handled. Claiming you (FCC Chair) have this behemoth that cannot be read by anyone but the other four until after the vote is not the way it should be.

      1. Nick Grossman

        one thing that’s interesting about the process has been that, while the rule itself has not yet been published, every single meeting the FCC has taken over the past year is public and documented (here:…. So you can see the arguments presented by every stakeholder who spoke to the FCC, from comcast to google to the public interest groups.While the process in congress is exactly the opposite — you can see drafts of the bills (sometimes), but the process itself is a complete black box.Neither is perfect but I just want to point out that there is actually a certain kind of radical transparency to the FCC’s process that most people making this argument don’t realize or acknowledge.

        1. Dave W Baldwin

          Appreciate the response, however, I’m referring to the document (behemoth) they voted on. It was hidden, though I understand a few pages worth was eliminated to quell the concerns of one member. Whatever Comcast or Twitter had to say over the past year is of little concern.Calling that transparent is quite a stretch. But I know, the herd is supposed to say that freedom won. Guess now (or still yet someday) we’ll get to see what freedom looks like.

          1. Nick Grossman

            No, I get that and agreeJust pointing out that there is actually a different kind of transparency here – the “ex parte” filings that everyone who met w the FCC had to file. you don’t get that in congress and it’s pretty interesting

          2. Dave W Baldwin


        2. JLM

          .I would have to disagree with you on your point about transparency. In fact, when the Congress conducts “regular order” and conducts subcommittee and committee hearings these matters are open to the public and it is possible to obtain copies of all materials and a transcript of the hearing. Subject only to space limitations, one can attend such meetings.As to the FCC, the opposite is actually true. There are no meetings — other than specifically called public hearings — which the public can attend.The simple proof of this is that the Rules considered today have been in existence for months and nobody has seen them. A Congressional subcommittee or committee hearing publishes an agenda and support materials before the meeting.Why are the promises being given today pertaining to future regulation more believable than: “If you like your doctor, you can keep your doctor?”JLMwww.themusingsofthebigredca…

          1. Anne Libby

            Good to see you here!

          2. Nick Grossman

            Right that is true that subcommittee meetings are publicWhat I was pointing out about the FCC process was that every single **private** meeting is documented in the docketImagine if that were the case in congress?Not at all defending the fcc’s overall process just noting that that one aspect is more transparent than people realize– on the fly

          3. JLM

            .It is difficult to choke out the word “transparent” about anything related to an entity that votes on secret rules.There is nothing about the FCC that is even remotely transparent other than their continuing attempt to dupe the public by pretending to be transparent.How does one even begin to embrace a public entity that exists only to serve the public who promulgates and votes on secret rules?These rules were not produced even to the US Congress which has Constitutional oversight authority.To whom is this entity accountable?”The check is not in the mail.”JLMwww.themusingsofthebigredca…

    8. Sam

      I particularly like your Bonus, Andy. An important question. Darn hard to see any government body, of any political stripe, unwind its own authority to regulate.

    9. JamesHRH

      Andy:BONUS – that’s a good one.5. Yes. some very large entities are having their rights limited, based on the track record of very large American entities in monopoly positions behaving in their own interest at the expense of others.4. ARPAnet? Web is, at its heart, a publicly developed / funded platform. Right here in Alberta, the Federal government funded a Crown Corporation (run by an American of all things) that provided the proof of concept for Oil Sands extraction. 100B+ of private investment does not change the fact that the Oil Sands are an example of a federal government kickstarting a massive commercial opportunity ( yes, it is likely only 1 of 3 in history & ARPANet is another, but still… happens).3. I think most of the upset on this issue is philosophical differences on the solution. Everybody sees the potential problem. I think the moment a big provider forces a fee on a service (not a customer) they will have a restraint of trade nightmare on their hands, courtesy of a federal attorney of some sort. Your 5 person panel gets replaced by a crusading young Rudy Guiliani type. Not much diff, really.2. Red herring.1. Universal access is what makes the web great. Piecemeal protection makes little sense.

    10. Mark Essel

      Great questions!I may have misinterpreted the rules but this is less about government locking down innovation of data providing mechanisms and more about not allowing companies to discriminate on the types of data their customers choose to consume.As an informed consumer, I don’t purchase bandwidth so that Cable can strong arm Netflix, I purchase bandwidth so I can use it as I please.1) Those last miles in certain geographies are spread out throughout the nation. A few large corporations provide connectivity across state boundaries. Think this has to be federal to be applicable.2) Because we can’t trust the current 1-2 providers.3) Domain expertise. 4) I think it has more to do with few choices than the quality of the product. My bandwidth has improved over the past decade from 5-7Mbps to 70Mbps down (cost has gone up by a factor of 3) . I still cannot find another provider to compete with Cable so any filtering they do on my connection is out of my control to influence through personal spending/choice5) The government is protecting my right to (unfiltered) information in this case, by preventing my data provider from only allowing the richest sources to reach me.Bonus: I think the situation would be very different if I had a dozen or so quality data providers. Then some could offer a service that charges a premium to certain types of data, while others did not and I could vote with my $$

  6. pointsnfigures

    Linked to a study by Prof George Stigler today on my blog. Posted it at Suggest everyone on each side read it. In the short run not much will change. In the long run lobbying dollars spent will go higher Comcast etc will get bigger more powerful and will win. They will be able to crush competitors using the FCCHappens in other industries that are heavily regulated and this won’t be different.I agree with Fred and others but disagree on the means to the end

    1. Rick

      “lobbying dollars spent will go higher”.I’ve said it before and I’ll say it again – It’s all about the money!!!

    2. Matt Zagaja

      Interesting point about the impact of lobbying. I will read this later.

    3. fredwilson

      as Nick mentioned at the end of his post, in time there will be technological solutions to this problem and competition will re-emerge. this is about buying time until that happens.

      1. Rick

        The technological solutions already exist. People just can’t get the funding to put them in place. That’s why I’ve said this is all for not. What is needed is a way for people to start competing now. We have the technology.

      2. pointsnfigures

        I am open to buying time. I guess we disagree that the FCC will allow anyone to buy time. Rick says there is tech that can do it-I am not sure about that-especially in a bulk commoditized way. I do know one of my portfolio companies ( thinks they not only can do distributed power (proven and works amazingly well) but might be able to move data. I am skeptical of big government and find them every bit as corrupt as big corporations. At least I might have a choice with a public company. With an unelected bureaucracy that might or might not be accountable to a Congressional oversight committee, I am less confident of this path. Solomon isn’t around to split this baby. Brad Feld had a nice post up about this today. I respect the other side on this argument. I think we agree on outcomes but would take a different path.

  7. Michael C Fernandez

    I would just like to ask how allowing the FCC to implement rate regulation is fostering a free open internet?

    1. Rick

      Oh my… You had to ask?

    2. kev polonski

      I don’t know but I can tell you at no point will there by even a “smidgen” of corruption in the FCC’s regulation of the internet.

    3. fredwilson

      the FCC has specifically said they will ” forbear” from rate regulation. at least two commissioners in the majority emphasized this point in their speeches

  8. Steven Kane

    very happy with FCC. But this is *not* regulating the Internet?!? Paging George Orwell…Mr. Orwell, white courtesy telephone please…

    1. Rick

      Sorry Mr. Orwell isn’t available anymore. He’s tired of telling people “I told ya’ so.”

  9. LE

    Hey Nick you know what would be helpful, and make some of this easier to digest, would be the information, talking points, as presented by both sides, in chart form side by side. (Same as when you want to compare which HP printer you are buying on Amazon.)Down left side, various points or actions or observations.Across top something like:”What they say””What we say””Why we are right and they are wrong”…and so on.

    1. Rick

      How does that help us make money?

      1. Matt Zagaja

        Rumor is Nick only does things for the swagger.

        1. Rick

          Smart fella’.

  10. leigh

    Yeaaaeeeeeeehhhhhh!!!!!’ Can’t believe the FCC actually ruled for it!!!!!

    1. ShanaC

      me either

  11. JLM

    .Tastes great! Less filling!Tastes great! Less filling!Now there was a great debate and intellectual confrontation.The current discussion about the FCC’s actions taken today are just as deep and intellectually sound.First for a few facts.Nobody knows what is in the “rules”. They have not been published in the Federal Register and they have not been released. Of the 5 members of the FCC only the Democrats had access to read them after they were drafted. Like other recent secret legislation, they were drafted by industry hacks and lobbyists.They have not really been subjected to any industry review though there are a few firms who claim to have seen them.The FCC has a terrible record on enacting rule driven regulation of big industries. Exhibit No 1 is something called the Fairness Doctrine which was enacted in 1949 and finally put to death in 1987 with the last references removed from written law in 2011. [Check those dates as I am working from memory. Sorry.]Most folks reading this blog are too young to know the Fairness Doctrine. I do not have sufficient time to describe it other than to say it was — like this rule making — a set of rules that were promulgated by the FCC after promises not to undertake such regulation.More important, through the years the FCC took the position that Congress had delegated to it the authority to make such rules without any obligation to go back to the Congress to approve what were, in essence, laws replete with winners, losers, fees and license threats.It took almost 40 years to right that ship.The body of law under which the Internet is being jammed is something called Title II (of the Communications Act of 1934 and updated in 1996 but not overhauled) which was spawned in the days of rotary dial service and before the invention of television. That was long ago and in a different time than we live in today. In a galaxy far away …..It was intended to regulate utilities at a time when the US population was about 126MM and rural electrification (Tennessee Valley Authority) was in its inception. It was a body of regulation which was needed to provide — often, not always — initial connection to electricity for folks for lights and heat and toasters. Again, TV hadn’t been invented yet.With the passage of years, substantial taxes were enacted as the authority given clearly authorized such fees and such fees were passed along to the consumer. Everything regulated by the FCC today is subject to substantial fees. Everything. The Internet will not be different even though verbal — not written — assurances have been given.”If you like your Internet service provider and no fees, you can keep your Internet service provider. Period. I promise.” [Note the part about fees is missing.]The recent death bed conversion of Chairman Wheeler to jam the Internet under Title II has come about because the White House realizes since Nov 2014 that with the loss of the Congress they cannot possibly hope to regulate the Internet in the manner they want — IN THE MANNER THEY WANT being the key phrase here — if a Republican Congress has to pass the law.The logic that the Internet is like a utility — subject to such things as wheeling arrangements and cooperative wheeling charges — is not consistent with the facts. The only two choices are not “information service” or “utility” — that is a strawman argument. The solution is regular order in the Congress just like, say, drones.I type this in Austin, TX with four potential providers of 1Gig Internet service. In fact, there may be six.My current provider is cheaper than it was two years ago for 60Meg service. I get 1Gig for less than I got 60Meg — you read that correctly.The free market — this is the evil ISPs, the supposed bad guys in this legend — has whipped ATT, Google, Grande, TWC into a frenzy but most importantly they have given me choices, good choices, without any intrusion of government. Or the imposition of government fees. It is a phenomenon called the “free market” and it is closely aligned with capitalism.One of the problems with a debate like this is we start to debate the bumper stickers and we forget to do our homework. Who can be against net neutrality? Who can be against innovation? The answer is nobody but these have now become strawman arguments not based on the actual debate.The debate is somehow based on an archaic notion that there is no competition in the last mile or that the ISPs will try to regulate speed to the disadvantage of the consumer while the actual market data is completely opposite to that fear. Again, ATX has 4 providers of 1Gig service at rates less than two years ago. Whoa, Nellie!The ISPs have already demonstrated at the fiber optic junction box on the pole behind my house that four stalwarts are willing to compete on access, price and speed.Under this smokescreen, the FCC has now created the mechanism to pick winners, losers, enact taxes, control licensing and to do to the Internet what they did with the Fairness Doctrine.This is not theory. This actually happened. The Fairness Doctrine forced an appropriately apolitical industry — the delivery of content to the customer — to be regulated on the basis of the actual content itself.It is difficult to generate any enthusiasm about sticking the most modern and innovative tech development in the last 50 years under a hidebound political appointee controlled agency — beyond the control of Congress — with a history of gargantuan wrong doing.What could possibly go wrong?I am completely in favor of all things good for the Internet. I am a student of history and think this is a colossal error. I am in favor of net neutrality and unlimited innovation — jamming the Internet under Title II and classifying it as a utility does not ensure either.Tastes great. Less filling.JLMwww.themusingsofthebigredca…

    1. ZekeV

      Ha! I was just going to ask, where’s JLM, and have you guys kissed and made up yet?

    2. Rick

      We would rather discuss how these changes can make us all boat loads of cash. You got anything along those lines?

  12. BillMcNeely

    Seeing headlines that Net Neutrality fight is not over. What is that about?

  13. entropy

    So, Have you read the 300 pages of new rules? If not, what are you high-fiving for exactly?

  14. Mark Essel

    Got some great feedback from the folks fighting the good fight at Vimeo (leadership). From my quick reading so far this looks like a HUGE win for net neutrality, and competition.Not too sure how and when it will be enforced thought.

  15. William Hinman

    Even I freelance from home and use computer+internet but get no money, whatsoever. Is God not net neutral to you and me here ?

  16. Rick

    Thanks Kate. How much does it cost to get started? I don’t do any labor myself. So I would need to hire people. Can you provide me with a seven figure contract to get started. I would require a deposit of only 20% to get started ramping up..Thanks again.

  17. Rick

    Well William it sounds like you and I could go in on Kate’s proposal. Can you fill the role of CTO? As soon as Kate’s check for 20% down arrives I we can get started hiring.

  18. William Hinman

    If Kate accepts to be our lifetime VC, well, yes.

  19. Rick

    I’ll have the lawyers add that to the contract.