Posts from Network neutrality

On the heels of its paperback release, I would like to recommend a book that is required reading in our shop, Internet Architecture and Innovation by Barbara van Schewick. I've mentioned Barbara before on this blog. She is a Law School Professor at Stanford and has written extensively on this important topic.

I am a fervent believer that everything that is great about the Internet emanates from its underlying architecture. That's where Barbara is coming from too, which is probably why we like her and her work so much at USV.

In this book, Barbara argues that the massive amount of innovation that has been made on top of the Internet is directly attributable to its architecture and that there are some parts of the architecture, most notably the last mile in wired and mobile, that are problematic and that do not benefit from the hypercompetitive nature of the open Internet.

This is an important piece of policy work and anyone who cares about the Internet ought to give it a read.

Related articles

Net Neutrality Issues and Barbara van Schewick's "Internet Architecture and Innovation" Book

Van Schewick's "Internet Architecture and Innovation" Out in Paperback

Internet Architecture and Innovation

Barbara van Schewick, Director of Stanford Law School’s Center for Internet and Society, and a leading academic voice in the Net Neutrality debate, has a good blog post about the FCC's adoption of Open Internet Rules last week. I've been traveling and out of the country since the FCC adopted these rules and have been meaning to get updated on what was finally adopted. I'm pleased to see that the final order was worded in a way that deals with some of our concerns.

In particular;

– Non discrimination: This is the key net neutrality provision for entrepreneurs and investors in internet based businesses. We need protection that those who control the last mile of internet access will not discriminate against certain services and favor others. We believe the ideal approach is an application agnostic standard. In the words of Commissioner Copps:

“In discussing the “no unreasonable discrimination” standard, we put particular emphasis on keeping control in the hands of users and preserving an application-blind network—a key part of making the Internet the innovative platform it is today.”

– Access fees: We believe that Internet access providers charging application providers for access to their customers should be prohibited. The order comes very close to doing so:

The text of the order clearly prohibits network providers from charging application and content providers for access to the network providers’ Internet service customers

However, it does provide the possibility of "paid prioritization" with a very high hurdle.

as a general matter,” arrangements of this kind [paid prioritization] are “unlikely” to be considered reasonable

– Wireless: We believe that the Open Internet Rules should be applied to both wireline and wireless networks. That didn't happen leading many to interpret it as the end of net neutrality for wireless networks. I am optimistic that the FCC will remain vigilant regarding open wireless networks and may push for wireless net neutrality in the future.

We emphasize that our decision to proceed incrementally with respect to mobile broadband at this time should not suggest that we implicitly approve of any provider behavior that runs counter to general open Internet principles.

Nothing is perfect that comes out of a political process and when you add in a negotiation between carriers and service providers, it is amazing we got anything of value. I think Chairman Genachowski, who is a friend of mine, did a terrific job on this and we thank him and his staff at the FCC for pushing these rules forward in a very difficult political climate.

Our regular programming, MBA Mondays, is being interrupted this week for a public service announcement.

The net neutrality debate is front and center again. FCC Chairman Julius Genachowski has announced that he will ask the FCC to adopt rules to protect the open Internet at its open meeting on December 21st. We have not seen these rules. Apparently nobody has outside the FCC. But we have been briefed on them. And we think that with one small tweak they will work well. But without that small tweak, they are problematic. My partner Brad has posted our firm's thoughts on the USV blog.

Back in the 80s and 90s, you could start, build, and invest in cable based services. But in order to get your new company distribution on the cable system, you'd have to go to the cable MSOs and give them free equity in your company for distribution. This mafia style shakedown has not existed on the Internet thank god. And the result is literally millions of web services and trillions of dollars of shareholder value.

That's what this debate is all about. The advent of broadband internet access has resulted in a duopoly in most markets. And the companies that provide you broadband internet access want the ability to "manage their networks." We think it is critically important to set some rules on how they can manage their networks to make sure we don't recreate the cable monopoly on the Internet.

We'd love to have an open and unregulated Internet access market. That will take a lot more competition in the last mile than we have now. We need policies that allow the spectrum and fiber to the home to become available and the capital to get invested in making that happen. Until that happens, we need some rules to keep everyone honest in the Internet acccess market.

The FCC's proposed rules prohibit unreasonable discrimination but don't define what that is. We think they need to go that extra mile so that startups don't end up in expensive lawsuits with monoplies with huge bank accounts.

And we are proposing that the FCC adopts the following language:

A non-discrimination rule that bans all application-specific discrimination (i.e. discrimination based on applications or classes of applications), but allows application-agnostic discrimination.

The logic and reasons behind this approach are laid out in our blog post on the USV blog. If you are interested in this debate, and we think you should be, please go read it.

Related articles

• Internet Access Should Be Application-Agnostic (unionsquareventures.com)
• Gigi Sohn: The Fight for Net Neutrality Begins (huffingtonpost.com)
• FCC Prepares to Vote on Net Neutrality (readwriteweb.com)
• Julius Genachowski: Preserving a Free and Open Internet (huffingtonpost.com)

I've never liked the term net neutrality to be honest. And in the wake of the FCC's legal loss to Comcast over bit torrent throttling, the net neutrality camp (which I am very much in) is on its heels. This post is not about that decision or its ramifications, which I think are significant. It's about the need to frame the issue in a different way.

My partner Albert got me thinking about Internet Freedom with his post the other morning. Internet Freedom is about sustaining the era of permissionless innovation that has characterized the first fifteen years of the commercial Internet in this country and brought us thousands of new big profitable companies, millions of jobs, and a vast array of new services and devices that have changed our lives and made them better.

Our firm, Union Square Ventures, focuses most of our time on finding companies, investing in them, and working with the entrepreneurs to build them. But a few years ago, we made the decision to invest a small amount of our time on public policy issues, like net neutrality, patent reform, spectrum reform, immigration reform, and a handful of other ones. All of this and more is about Internet Freedom. Our business requires it. If we lose Internet Freedom, we won't have any companies we would want to invest in and we'll close up shop and move on with our lives. That would be our loss.

The bigger loss would be to our society which has benefitted mightily from Internet Freedom and will continue to benefit as long as we don't lock everything down and close everything up. So as Albert says, "the price of Internet freedom too is eternal vigilance." 

We'll be stepping up our efforts inside our firm and outside our firm in this area. It's so very important.

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• Court Tells FCC It Has No Mandate To Enforce Net Neutrality (And That's A Good Thing) (techdirt.com)
• What Happens Now with Net Neutrality (dailykos.com)