The US Federal Communications Commission should move ahead with plans to create formal network neutrality rules in order to encourage investment and innovation in web applications and content, three venture capitalists said.
Without new net neutrality rules, innovative new web companies could get buried by broadband providers that don't see their value, said Brad Burnham, a partner with Union Square Ventures, a venture capital firm that has invested in Etsy.com, Foursquare and Meetup. Without net neutrality rules that would prevent broadband providers from selectively discriminating against web content and services, a service like Twitter "would never have seen the light of day," he said during a Washington, DC, forum hosted by the Open Internet Coalition, a group that supports net neutrality rules.
Allowing broadband providers to have control over web content and applications is "fundamentally a bad idea," added Brad Feld, managing director of Foundry Group, a venture capital firm that focuses on technology investments. Also speaking in favor of net neutrality rules was Santo Politi, founder and general partner of Spark Capital.
Burnham and Feld disputed the assertion by some broadband providers that net neutrality rules and the FCC's effort to reclassify broadband as a regulated common-carrier service would hurt investment from broadband providers. "Does anyone really believe that?" Feld said.
If broadband providers continue to insist that net neutrality and reclassification will hurt telecom investment, they will be sending a bad message about their business models to Wall Street, added Markham Erickson, executive director of the Open Internet Coalition. Some broadband providers have begun to downplay concerns about the effects of net neutrality rules on investment in their industry, he said.
But representatives of Broadband for America, a broadband deployment advocacy group with members including AT&T, Verizon Communications and Comcast, repeated their concerns about net neutrality rules and reclassification during their own press conference Friday.
If the FCC moves to reclassify broadband, that will "create a lot of uncertainty in the private sector," said Harold Ford Jr., co-chairman of Broadband for America, and a former Democratic representative from Tennessee.
Without new regulations, the broadband industry is projected to invest more than $30 billion a year between 2010 and 2015 and create more than 500,000 jobs, said Hal Singer, managing director of Navigant Economics and co-author of a recent study on broadband investment. The FCC and Congress should consider the potential impact of new regulations on that investment, he said during the Broadband for America press conference.
"We're looking at sacrificing a prospective hundreds of thousands of jobs and tens of billions of dollars in investment," added Everett Ehrlich, president of ESC, a business consulting firm. When asked how much telecom investment would suffer with net neutrality rules, Ehrlich said it would be a "substantial amount."