As the Federal Communication Commission (FCC) closes comments on its controversial net neutrality policy, large users of Internet bandwidth are opposed as well as smaller, more entrepreneurial firms who fear the inability to compete with media goliaths could limit media access. Still others argue the government’s proposal to relegate smaller firms to a slower Internet is a free speech issue.
Opposition to FCC’s net neutrality
The economic argument opposed to the FCC proposal comes from successful tech giants such as Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN), Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) as well as start ups, the most well known of which being Etsy, Uber and AirBNB, a CNBC report noted.
The FCC’s proposed rules would green light broadband providers such as Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) and AT&T Inc. (NYSE:T) to charge companies for a so called “fast lane” of service. The web sites of Comcast, as well as its media divisions at NBC and potentially Time Warner Inc (NYSE:TWX), could have much quicker download speeds than smaller firms, who might not be able to afford to pay for the higher level of service.
Internet’s neutrality ensures that it remains an engine for economic growth
“Preserving the Internet’s neutrality ensures that it remains an engine for economic growth, innovation, and democratic values…. Broadband Internet access providers, however, have the incentive to discriminate and block Internet traffic,” the Internet Association, which represents 35 Internet companies, said in a 23 page statement. “They have the tools to carry this out. They also have the ability to hide their actions by distributing the blame to other stakeholders.”
The Internet Association is concerned the FCC’s proposal favors large firms with deep pockets at the expense of smaller start ups. “If the proposed rules were in place when Etsy was founded, we would never have achieved the success we have today,” Etsy CEO Chad Dickerson wrote in his FCC comments. “Etsy and other startups will suffer if the FCC allows some companies to negotiate priority or exclusive access to consumers.” Etsy is No. 3 on CNBC’s “Disruptor 50” list, a fact that he cited in his comments.
“If the FCC moves forward with the current proposal, it’s hard to imagine the next Etsy getting enough of a toehold to take on established incumbents,” Dickerson wrote.
While competitiveness between goliath advantaged firms and smaller firms is one issue, free speech is another bone of contention. Larger firms will be afforded advantages to communicate with the general public while smaller firms will be relegated to slower speeds at which they will be restricted in their ability to deliver communications over the Internet.