So it Begins: Startups Getting Hurt By Net Neutrality

But don't take my word for it.

Via MIT Technology Review, here is Brad Burnham of Union Square Ventures:

The cable industry says such charges are sensible, especially when a few large content providers like Netflix can take up a large fraction of traffic. But if deep-pocketed players can pay for a faster, more reliable service, then small startups face a crushing disadvantage, says Brad Burnham, managing partner at Union Square Ventures, a VC firm based in New York City. “This is absolutely part of our calculus now,” he says. 
Burnham says his firm will now “stay away from” startups working on video and media businesses. It will also avoid investing in payment systems or in mobile wallets, which require ultrafast transaction times to make sense. “This is a bad scene for innovation in those areas,” Burnham says of the FCC proposal.
Just a reminder to everyone, that recently, Mozilla proposed the following changes to the proposed FCC Net Neutrality Regs:

Mozilla's plan is a somewhat crafty attempt to avoid the worst of the political mess that reclassification would cause, by arguing that there are two separate markets: the markets for broadband providers to end users (i.e., our own broadband bills) and then a separate market for the relationship between internet companies (what Mozilla is calling "edge providers") and the broadband providers. Mozilla is saying that since these are separate markets, the FCC could reclassify just the connection between internet companies and broadband providers as telco services, and leave the last mile setup unchanged as an information service. Thus, it's arguing that the transit market more accurately reflects a telco service, and thus would be much easier to reclassify. In a sense, this would also be a way to attack the interconnection problem, which is where the net neutrality debate has effectively shifted. 
GigaOm comments on that same plan here, saying:

But can this work? It’s a neat way to call Wheeler’s bluff on the reclassification issue, which is so politically charged, that he truly can’t touch it. Instead of attacking the cable and telcos from the front on reclassification, he could sneak around from the side. However, Wheeler’s made statements in the past that indicate he’s okay with a double-sided market for broadband, which means he may not want to impose this new relationship on ISPs. 
Such an action would also undoubtedly lead to lawsuits if it were implemented, which throws net neutrality into doubt for even longer. However, it’s about time someone changed the terms of this debate to reflect how the internet has changed since 2002 when the FCC decided it wasn’t a utility. Since then, as people have abandoned ISP-specific email, portals and more to surf for content and choose services delivered from the wider internet, it’s clear that ISPs are a conduit for content and services, not a provider of them.
Mozilla seeks to get the FCC to recognize this in a way that might be politically viable. Hopefully the agency takes Mozilla up on the idea.

And, as a parting note, let's not forget that Tom Wheeler, the current head of the FCC, is a former Cable Industry Lobbyist. Or, to quote Consumerist on the matter: FCC Chairman: I’d Rather Give In To Verizon’s Definition Of Net Neutrality Than Fight. How, exactly, did Wheeler get this job again? Oh right. May have something to do with that 700k he raised for the Obama campaign. Smashing. 


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