Why Net Neutrality is Crucial for Entrepreneurship

If you’re not familiar with net neutrality, read up on Wikipedia.

I wrote before about the defeat of Senate bill HR5252, which would have dealt a major blow to network neutrality and changed the internet as we know it. There is still an uphill battle to be fought, however things are looking rosier. The November elections ousted many of the congressmen and women that were against net neutrality, a bipartisan neutrality bill has been introduced, and Ed Markey, chairman of the senate subcommittee that oversees telecommunication, has promised to keep the net neutrality ball rolling.

So why does this matter for entrepreneurs?

If the internet becomes a privileged medium, accessible only to those with deep pockets, then the traditional and unique equal footing that has been the hallmark of the internet will be lost. New companies will find it much harder to break in and thrive, reminding me of more traditional media outlets that are dominated by a few players, with high barriers to entry (see television, radio, publishing). Many of today’s most successful Internet companies (Amazon.com, eBay) began as small independent start-ups that thrived because of the Internet’s inherent freedom. Without that freedom, America’s small businesses will suffer.

Startups are small, cash strapped entities trying to pick themselves up by the bootstraps and wrest a market segment away from the big boys. Often those big boys have names like “Google”, “Yahoo”, “Facebook”, and “MySpace”. On a non-neutral internet, these big boys would have plenty of cash to play by the telco’s new rules, and ensure that their content continues to get served up at top speed to the web surfing public.

Your startup already has enough trouble hiring developers, creating buzz, drawing users, paying lawyers, and putting food on the table. Now not only do you have to do those things, you need to match Google and Yahoo’s tithe to the telcos to ensure that people can even access your site. And I hope you can pay for the same level of access they can afford, because we know web surfers aren’t going to wait more than 5 seconds for the next great thing, when the same comfortable thing loads instantly.

As the world’s last truly free and equal communication medium, the internet must remain neutral. I’d encourage all entrepreneurs (not just American, it’s not called the world wide web for nothing) to contact your political representatives and encourage them to vote for network neutrality.

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  • Have to disagree.

    Net neutrality is nothing more than an elaborate business negotiation between Google and the ISPs, dressed up as a public policy issue. Google and other companies have effectively used the “activist anti-industrial” complex as a bullhorn to push their agenda.

    See how their doing it at http://www.thenetneutralityshow.org

  • Harry,

    Thanks for linking to your article and providing the opposing viewpoint! One of my favorite things about blogging is that instant discussion and feedback.

    I do have to disagree with some of your points though. Your AOL/TCI argument is correct, however, 1990’s telco politicking is somewhat irrelevant today.

    Your article makes it seem as though Google and company will gain some giant advantage over AT&T and friends on a neutral internet. However, a neutral internet is exactly what it sounds like. Anyone may send any data to anyone, with equal preference. In fact, by creating a tiered internet, AT&T and it’s brethern are attempting to destroy the equal marketplace as it exists today, and gain their own competitive advantage over everyone else.

    Your article references a “wacky group” that thinks the issue is about the protection of “little websites, bloggers, and entrepreneurs”, however, you don’t back it up with any facts. You also don’t address how entrepreneurs will be able to compete on a tiered internet. You’ve argued against net neutrality, but haven’t refuted the arguments for it.

  • I certainly agree with Harry in that Google is supporting net neutrality purely for some self interest and not out of T follow up on the Google issue, here is a blog entry highlighting Google’s recent announcement that their 4th quarter profits had tripled from a year ago. Google is trying to create a monopoly all under the distraction of this debate.

    “This is very good news for Google. It also underscores how unfair it is that Google is advocating net neutrality regulations in an attempt to gain a competititve advantage at the cost of the providers of the backbone of the internet. Google knows that net neutrality will severely impair the ability of companies, such as Verizon, to continue rolling out costly service improvements, such as FIOS.”


  • Bill:

    Thanks for responding to my comment and taking a look at my website. I greatly appreciate your feedback and views.

    I’m actually agnostic on the merits/demerits of net neutrality. Rather, I’m more interested, as someone that’s been in the persuasion business, in how the issue was created, disseminated and nurtured — and particularly how it became such a partisan issue. In my humble view, the Internet and this nation’s policy on broadband and information networks has not been helped by a lot of the misinformation propagated by both sides. My website will delve into that in future posts.

    Could you tell me when and how you became aware of net neutrality? Was it before December 2005? I ask, because that’s when the infamous Ed Whitacre remarks about companies using his network “for free” in Business Week became public. By March 2006 AT&T had announced it was merging with BellSouth and that’s when the Net Neutrality propaganda machine when into action.

    Many thanks for this opportunity to share views.

  • Hey guys,

    Again, thanks for your well written and thought out comments. You raise some good points. I’d like to briefly refute a couple of them, and agree with some others.

    HOTI –

    Google’s profits have skyrocketed as of late, however, I don’t really think this has anything to do with the net neutrality issue. They will be affected by a two tier internet, however, these profits have been earned in the current, equal landscape. By supporting a neutral internet, Google does not seek to gain any kind of advantage – things will remain as they are. Google is seeking to prevent telcos from gaining a competitive advantage.

    I agree that Google is supporting net neutrality out of selfish interests (a neutral internet is simply cheaper for them), however, this does not make the issue any less important.

    Harry –

    I agree that the propagation and public uptake of the net neutrality issue is fascinating, especially from your point of view and experience. However, I don’t share your point of view that the issue only impacts large companies like the telcos and Google. Yes, Google’s costs would increase substantially on a two tier internet. Honestly though, they would probably have no problem bearing the cost.

    The issue of network neutrality affects all of us, especially entrepreneurs trying to start competing businesses. This is the point of view I was trying to argue in my first post – that a non-neutral network will create extremely high barriers to entry on an internet that has traditionally had none.

    To all –

    This is the issue that I would like to bring the discussion back to. I would like to specifically discuss how network neutrality affects the little guys, entrepreneurs and startup companies in particular. If anyone has opinions on how cash strapped entrepreneurs will be able to compete with Google, Yahoo, etc on a non-neutral internet, please share!

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  • I would hope that Internet access would remain easily accessible as I think it’s availability does more good than harm and the government would be a fool to take that much information away from society. As for small business goes, I whole heartedly agree that small businesses need Internet advertising to compete with the big guys and it would hurt the economy tremendously.

Bill D'Alessandro