The net neutrality debate, that wonky but crucial issue of whether the Internet will have so-called fast lanes and slow lanes that allow for paid priority to access, ended officially at the Federal Communications Commissions, which concluded its public comment period on September 15. Millions of consumers, startups, tech companies, and venture capitalists weighed in with emailed comments and face to face meetings at the FCC in what was one of the biggest public outcries over a proposed policy change in the agency's history.
One of those concerned startups is Meetup, the local group network, which penned an elaborate letter to the FCC chairman, Tom Wheeler. Meetup, which has 20 million members worldwide, said it would not be able to operate effectively under a regime where larger companies could pay for better access. As the FCC gets ready to issue its final order, as soon as the end of the year, I spoke with Meetup's general counsel, David Pashman, who authored the letter. We spoke about the high stakes involved for technology companies if the open Internet provision is overturned, and what the best outcome would be for all companies that depend on the Internet.
Following is an edited transcript of our conversation:
Q: For people just tuning in, what's at stake if the Open Internet provision is overturned?
David Pashman: An open Internet is critically important for technology companies and the investment community, and particularly early stage companies. If the Open Internet rules enacted in 2010 and overturned in January with Verizon are not to be enforced, it would be a fundamental shifting in the entrepreneurial landscape and the landscape for Internet companies. Under the Open Internet rules, the Internet was essentially a platform that was open and accessible on equal terms to all comers, so entrepreneurs could experiment with companies and grow with very little capital. That means one person on laptop in a Starbucks could develop an app that could compete with services offered by a Google or a Netflix and other incumbents, because they didn't have to worry about negotiating paid prioritization or access deals that would likely be required in a world without those net neutrality rules.
The issue is a system of allowing the Internet access provider to act as a gatekeeper, which would prevent companies from developing to a point where they can compete with incumbents.
Q: Chairman Wheeler's proposed rule change involves using a two-tiered system only where commercially reasonable. What's wrong with that?
DP: What is wrong with that is nobody has any idea what it means. It would be based on a highly fact-specific inquiry and the FCC has not proposed any detail about how this inquiry would go about. It is also an after-the-fact inquiry. I would wait until after I was subject to what I believed was unreasonable discrimination, and then I would have to institute a proceeding at the FCC, which would be incredibly resource-intensive and incredibly expensive and lengthy and distract me from doing all the other things I need to be doing.
All the meanwhile, I'd be battling a Comcast or Verizon with teams of lawyers and significant resources to deal with exactly this. Even if, after this long and expensive and distracting process, it was decided the Internet access provider was in violation of the new rule, it is one or two years later and Meetup would be out of business or would have suffered significant or irreparable harm.
Q: The individual consumer isn't expected to suffer as much from an overturning of net neutrality. Are they that different from the sole proprietor with the laptop?
DP: The fallacy there is focusing on the sole proprietor with the laptop in Starbucks. You are going to be affected before you get to scale, and for two reasons: One is that your ability to raise investment capital will be significantly tempered because now the VC has to factor in the risk that you can't access the open Internet on the same terms that will enable you to compete. So you will also have to raise more capital. Two, you will have to hire teams of lawyers and pay more money to access the Internet.
Q: What outcome are you hoping for?
DP: We've been very clear about that. It would be reclassifying Internet access providers as telecom providers under Title II of the Telecommunications Act, and that includes wire line and wireless, because the previous Open Internet Order did not apply to wireless. Step two would be to adopt rules defining what unjust and unreasonable practices are. And that would be no blocking and no application-specific discrimination, and no access fees. Step three, of course, would be to forebear from the provisions of Title II that are inapplicable, or inappropriate in the context. The telecommunications companies obviously would disagree with me, but there's at least a clear path to getting to a place with the same rules we had before the Verizon decision.