NNSquad - Network Neutrality Squad
[ NNSquad ] Why the Open Internet proposal needs to be improved - views from a start up and a VC
Dear all, I thought you might find this interesting. Everybody has heard that the FCC's current proposal does not sufficiently protect innovators, but for many, this is just an abstract argument. On Saturday, a start-up video company from Silicon Valley called Zediva filed a letter with the FCC that explains what the Chairman's current proposal would mean for them. The letter does a great job of showing how different proposals for network neutrality rules can provide very different protections for innovative start ups and where the current proposal needs to be improved. It really lets the problems come to live. I wrote about the letter on my blog and asked Zediva for permission to post it there. You can find the blog post here: http://netarchitecture.org/2010/12/start-up-video-company-files-concerns-abo ut-fcc-open-internet-proposal/. Also, noted venture capitalist Brad Burnham wrote a blog post last night (Sunday) asking the FCC to improve the current open Internet proposal here: http://www.unionsquareventures.com/2010/12/an-applications-agnostic-approach .php. Brad (http://content.usv.com/pages/brad-burnham) is one of three partners of New York venture capital firm Union Square Ventures, which was an early investor in Twitter. Other portfolio companies include Foursquare, Zynga,Tumblr, Meetup and Twilio (http://www.unionsquareventures.com/investments/index.php). Some excerpts from the posts are below. Finally, if you want to encourage the FCC to improve the proposal, both posts have some suggestions. Best, Barbara --- Barbara van Schewick Associate Professor of Law and (by Courtesy) Electrical Engineering Director, Center for Internet and Society Stanford Law School Author of "Internet Architecture and Innovation," MIT Press 2010 www.netarchitecture.org Crown Quadrangle 559 Nathan Abbott Way Stanford, CA94305-8610 Phone: 650-723 8340 E-Mail: schewick@stanford.edu Barbara van Schewick, "Start-Up Video Company Files Concerns about FCC Open Internet Proposal," December 8, 2010 http://netarchitecture.org/2010/12/start-up-video-company-files-concerns-abo ut-fcc-open-internet-proposal/ "On December 1, the chairman of the FCC proposed a set of rules designed to protect the open Internet. He would like the commission to adopt this proposal at its open meeting on December 21. Since then, many have posted their evaluations of the proposal. Some unequivocally support the proposal. Some acknowledge they would have preferred a different solution, but think this is an acceptable compromise. A final group of commenters (which includes academics, public interest organizations, organizations that rely on the open Internet for their work, investors, and companies) can be summarized as follows: "We are glad that the chairman has decided to act. However, the chairman's proposal needs to be improved to adequately protect users and innovators." Why do innovators and users need protection? If a network provider blocks or discriminates against an application I want to use, I cannot use the Internet in the way that is most valuable to me. If a network provider restricts access to content I am interested in, my ability to educate myself, contribute to discussions of the subject and make informed decisions will be limited. Ideally, open Internet rules would ban this type of discriminatory behavior and provide an easy mechanism for users to ask the FCC to stop it. In the absence of good rules, users just have to live with it. If an application is blocked, it cannot reach its users and the application developer cannot reap its benefits. In the absence of meaningful protections, there is nothing the application developer can do about this. And concerned about the threat of discrimination, innovators (or potential investors) may decide not to pursue innovative ideas. Thus, without meaningful network neutrality rules, we will get less application innovation. And since applications, services and content are what makes the Internet useful to us, an Internet without meaningful network neutrality rules will be less useful to us in the future. I'm sure you have heard that a lack of meaningful network neutrality rules harms start ups and reduces application innovation before. But for many, it sounds like an abstract theoretical concern. Yesterday, a start up from Silicon Valley called Zediva filed a letter with the FCC that explains what the Chairman's current proposal would mean for them. The letter does a great job of showing how different proposals for network neutrality rules can provide very different protections for innovative start ups and where the current proposal needs to be improved, so I asked Zediva for permission to post it here. This is one example of many Is this just the experience of one company, or does Zediva's story stand for more? Over the past few years, many entrepreneurs have told me that potential investors identified the risk of blocking or discrimination as one of the main risks associated with their company and used this fact to justify their decision not to fund them (I talked about the experience of one company here).[1] Even those who haven't had similar conversations with funders yet are usually concerned about the problems described by Zediva. Thus, Zediva's story is not an outlier. It stands for the problems faced by many start-ups and innovators. You may wonder why we don't hear more from entrepreneurs, if this is the case. My conversations with entrepreneurs suggest a number of reasons: First, entrepreneurs focus on getting their product to market and making it the best product they can. They do not have the time to follow the latest twists and turns of the Washington policy debate and write letters to the FCC. Second, many do not come forward because they fear that network providers may retaliate against them in the future. I used to hear this a lot from application and service providers in the mobile space. But over the past year, this concern has started to come up in many conversations with innovators whose applications and services run over wireline networks. Third, many start-ups do not want to draw public attention to their vulnerabilities, fearing it may scare potential investors away. And finally, having been declined funding is not something that entrepreneurs like to brag about. What you can do I believe that the concerns described by Zediva are real problems, and that the current proposal needs to be improved along the lines described in the letter to make sure that innovators who develop or provide applications, content and services for the Internet are adequately protected. It is not too late to make these changes. Here is the text of the letter [...]" Brad Burnham, "Internet Access Should Be Application-Agnostic" 08 December 2010 http://www.unionsquareventures.com/2010/12/an-applications-agnostic-approach .php "Julius Genachowski, the Chairman of the FCC, recently announced that he would ask the FCC to adopt rules to protect the open Internet at its open meeting on December 21st. We applaud the Chairman's effort, but we worry the proposed framework, as it is currently drafted, will not result in the free and open Internet that is his goal. The proposed rule has several problems: 1.it prohibits only unjust and unreasonable discrimination but does not clearly define those terms, 2.broadband access providers are not prohibited from charging web services like Google, Facebook or Twitter a fee to reach consumers or to get faster access to consumers, and 3.users who access the Internet over wireless networks have few protections. If these concerns are not addressed, access providers could use their ability to control access to the Internet to control the market for Internet applications and services. I remember too well, the experience of investing in cable television programming start-ups back in the 90s when there was limited channel capacity on cable networks and the companies that controlled access to consumers made it very clear that they would need to own 20% of your company before they would agree to carry your programming on their network. The Internet we know today exists only because, until now, there have been no gatekeepers between consumers and service providers. We need to keep it that way. The good news is that the FCC can balance the interests of web services innovators and consumers with those of telephone and cable companies without changing the substance of the proposed rule simply by defining application-specific discrimination as unreasonable. Barbara van Schewick, a professor at the Stanford Law School, describes this approach here. She says the correct approach is: "A non-discrimination rule that would ban all application-specific discrimination (i.e. discrimination based on applications or classes of applications), but would allow application-agnostic discrimination." The brilliance of this approach is that it offers cable and telephone companies great flexibility to package and price their services and to manage their networks without harming investment and innovation in web services. If a user wants more packets or less latency, an access provider should be able to sell that to them. But for that access service to meet the test of being application-agnostic, the choice of when to use these services and for which applications must be left to the user. Similarly, if a user consumes a disproportionate share of packets at certain times of day, a network provider should be able to temporarily reduce that user's throughput to avoid degrading the experience of others. These actions would not threaten a free and open Internet because they are targeted at a consumer's use of network capacity, not a specific application. On the other hand, if access providers throttled only the bandwidth available to BitTorrent to deal with congestion, that would clearly be application-specific discrimination. Blocking or throttling video would be discrimination against a class of applications. This approach works equally well for wireless. If an older wireless network does not have the capacity to handle lots of packets at peak times, it can reasonably limit the number of packets available to users. When congestion is eased it can open up the pipe again. This is reasonable network management that does not distort the competitive market for web services. Blocking or discriminating against a specific web service like Skype or against a whole class of web services like streaming video would be prohibited under this framework. If it is not possible to solve all network management problems on older wireless networks in an application-agnostic way, there could be an exception; but the presumption should be that network management would be as application-agnostic as possible. If cable and telephone companies intend to use their control over consumer's access to the Internet to extract outsize profits from the innovative companies working in the dynamic and competitive market for Internet services, it should be pretty clear to the FCC that they cannot reconcile their interests with those of consumers and innovators. If, on the other hand, access providers are, as they say, concerned only about their ability to invest in their network and manage it responsibly, they will support this application-agnostic regulatory framework. We believe it is in everyone's interest to improve the current proposal by: .defining any application-specific discrimination as unreasonable, .extending that reasonableness test to include wireless Internet access, and .making it clear that pay-to-play access fees (whether for access to users or faster access to users) are prohibited. If you agree, we encourage you to write to Chairman Genachowski, Commissioner Copps, and, Commissioner Clyburn, Commisioner McDowell, and Commissioner Baker and urge them to work together to make this modest but important change before bringing the rule to a vote later this month. We also encourage your you to exercise your own authority and influence, using the services that you use everyday to let the FCC know you understand the problem and will support their effort to create an application-agnostic regulatory framework: 1. Post your thoughts on your own blog. 2. Tell your friends on Facebook 3. Post this on Tumblr, and 4. Tweet this to your followers on Twitter."