Reactions to Tuesday's
court decision to kill the Federal Trade Commission’s Open Internet Rules, better known as net neutrality rules, have come from
all directions.
The International Business Times showed how Netflix
monthly subscription fees could rise as
much as $4.80 per user for
high-definition streams, thanks to Internet service providers charging extra
for the bandwidth. The chairman of the FCC, Tom Wheeler, also weighed
in on the decision, albeit in a
tepid and confusing manner.
Entrepreneurs also worry about the effect on startup
Internet companies. Without the cash flow that major companies enjoy, startups
might not be able to afford the fees necessary to deliver content to customers.
Fred Wilson, a managing partner at Union Square Ventures (whose portfolio includes companies like
Twitter, Tumblr, Etsy and many more), wrote about the effect the court ruling
on net neutrality will have on tech startups from the perspective of a venture
capitalist. Wilson said that without net neutrality rules, the environment for
investors and entrepreneurs will become a “nightmare.”
Telecommunication
companies "will pick their preferred partners, subsidize the data costs
for those apps, and make it much harder for new entrants to compete with the
incumbents,” Wilson warned on his blog, AVC.
Wilson imagines three entrepreneurs pitching great ideas to a venture
capitalist and then describes how a venture capitalist is likely to respond in
a world without net neutrality.
First, Wilson images a new music streaming
service that helps users find and listen to new music that is playing live in
their city. While established companies like Spotify, Beats and Apple could
afford paying fees to ISPs to make their services free on mobile networks, a
startup might not have this luxury. The company would have a hard time
attracting users because it would simply be too expensive to use the service,
making it difficult for venture capitalists to invest.
The same idea applies to a startup video
streaming service or a new photo-sharing app. Big companies already have the
income to pay ISPs for their data fees without having to pass it along to
customers. A startup just couldn’t make it.
“We love your idea and would have funded
it right here in the meeting back in the good old days of the open Internet,
but we can’t do that anymore,” Wilson wrote from the perspective of the
hypothetical venture capitalist.
“This is the Internet 3.0,” Wilson
continued. “With [Tuesday’s] court ruling saying that the FCC cannot implement
the net neutrality rules they adopted a while back, this nightmare is a likely
reality.”
Do you agree that the end of net
neutrality will hamper Internet innovation? Let us know in the comments.
Ryan W. Neal
Originally from Northern California, Ryan W. Neal came
to New York to earn his master's in journalism from Columbia University
This is a repost of an article that appeared on International Business Times on January 16, 2014
No comments:
Post a Comment